Profi Credit Polska (Consumer protection - Credit agreements for consumers - Judgment) [2019] EUECJ C-419/18 (07 November 2019)

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(References for a preliminary ruling — Consumer protection — Directive 93/13/EEC — Article 3(1) — Article 6(1) — Article 7(1) — Directive 2008/48/EC — Article 10(2) — Credit agreements for consumers — Lawfulness of securing the debt arising under the agreement by means of a blank promissory note — Demand for payment of the debt owed under the promissory note — Scope of the court’s powers and obligations)

REQUESTS for a preliminary ruling under Article 267 TFEU from, respectively, the Sąd Rejonowy dla Warszawy Pragi-Południe w Warszawie (District Court for Warszawa Praga-Południe, in Warsaw, Poland) and the Sąd Okręgowy w Opolu, II Wydział Cywilny Odwoławczy (Regional Court, Opole, Second Civil Appeal Division, Poland), made by decisions of 13 February and 3 July 2018, received at the Court on 26 June and 24 July 2018, respectively, in the proceedings

composed of J.-C. Bonichot, President of the Chamber, R. Silva de Lapuerta, Vice-President of the Court, M. Safjan, L. Bay Larsen and C. Toader (Rapporteur), Judges,

– the Czech Government, by M. Smolek, J. Vláčil and S. Šindelková, acting as Agents,

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

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

1 These requests for a preliminary ruling concern the interpretation of Articles 3(1), 6(1) and 7(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29) and of the provisions 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, and corrigenda at OJ 2009 L 207, p. 14, OJ 2010 L 199, p. 40, and OJ 2011 L 234, p. 46).

2 The requests have been made in proceedings between Profi Credit Polska S.A. and (i) Ms Bogumiła Włostowska, Mr Mariusz Kurpiewski, Mr Kamil Wójcik, Mr Michał Konarzewski, Ms Elżbieta Kondracka-Kłębecka, Ms Monika Karwowska, Mr Stanisław Kowalski, Ms Anna Trusik, Mr Adam Lizoń and Mr Włodzimierz Lisowski, and (ii) OH, concerning demands for the settlement of debts arising under blank promissory notes issued by the latter parties in respect of sums owed under loan agreements.

‘… contracts should be drafted in plain, intelligible language, the consumer should actually be given an opportunity to examine all the terms and, if in doubt, the interpretation most favourable to the consumer should prevail;

… the courts or administrative authorities of the Member States must have at their disposal adequate and effective means of preventing the continued application of unfair terms in consumer contracts’.

‘The purpose of this Directive is to approximate the laws, regulations and administrative provisions of the Member States relating to unfair terms in contracts concluded between a seller or supplier and a consumer.’

‘A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.’

‘Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplied in exchange, on the other, in so far as these terms are in plain intelligible language.’

‘In the case of contracts where all or certain terms offered to the consumer are in writing, these terms must always be drafted in plain, intelligible language. Where there is doubt about the meaning of a term, the interpretation most favourable to the consumer shall prevail. …’

‘Member States shall lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms.’

‘Member States shall ensure that, in the interests of consumers and of competitors, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers.’

10 As stated in Article 1, the purpose of Directive 2008/48 is to harmonise certain aspects of the rules of the Member States concerning agreements covering credit for consumers.

11 Article 10(2) of that directive lists, inter alia, the information to be included in a clear and concise manner in credit agreements.

12 Article 14 of that directive establishes a right for the consumer to withdraw from a credit agreement without him having to give any reason.

13 Article 17 of Directive 2008/48, headed ‘Assignment of rights’, provides, in paragraph 1:

‘In the event of assignment to a third party of the creditor’s rights under a credit agreement or the agreement itself, the consumer shall be entitled to plead against the assignee any defence which was available to him against the original creditor, including set-off where the latter is permitted in the Member State concerned.’

14 Article 19 of that directive specifies the method for calculating the annual percentage rate of charge for consumer credit.

15 Article 22 of that directive, headed ‘Harmonisation and mandatory nature of this Directive’, states:

‘1. In so far 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.

2. Member States shall ensure that consumers may not waive the rights conferred on them by the provisions of national law implementing or corresponding to this Directive.

3. Member States shall further ensure that the provisions they adopt in implementation of this Directive cannot be circumvented as a result of the way in which agreements are formulated, in particular by integrating drawdowns or credit agreements falling within the scope of this Directive into credit agreements the character or purpose of which would make it possible to avoid its application.

4. Member States shall take the necessary measures to ensure that consumers do not lose the protection granted by this Directive by virtue of the choice of the law of a third country as the law applicable to the credit agreement, if the credit agreement has a close link with the territory of one or more Member States.’

‘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.’

17 Article 10 of the ustawa prawo wekslowe (Law on Bills of Exchange and Promissory Notes) of 28 April 1936, as amended (Dz. U., 2016, item 160) (‘the Law on Bills of Exchange and Promissory Notes’), states that if a bill of exchange which was incomplete when issued has been completed otherwise than in accordance with the agreements entered into, the non-observance of such agreements may not be raised against the bearer unless he has acquired the bill of exchange in bad faith or, in acquiring it, has been guilty of gross negligence.

18 Under Article 103(2) of that law, Article 10 thereof is applicable to promissory notes.

19 According to Article 17 of that law, persons sued under a promissory note may not invoke against the bearer any pleas based on their personal relation with the drawer or with previous bearers, unless the bearer, in acquiring the promissory note, has knowingly acted to the detriment of the debtor.

(1) the term “promissory note” in the body of the document, in the language in which it was issued;

(6) a statement of the date on which and of the place where the promissory note is issued;

21 Under Article 233(1) and (2) of the ustawa — Kodeks postępowania cywilnego (Law on the Code of Civil Procedure) of 17 November 1964, consolidated text, as amended (Dz. U., 2018, item 155) (‘the kpc’) the court is to assess, on the basis of a comprehensive consideration of the material collected, the reliability and strength of the evidence. The court is to assess on the same basis how to interpret the refusal to produce evidence or any act of a party that obstructs the investigation of the case before it.

22 Under Article 248(1) of the kpc, each party must produce, on the order of the court, at a specified time and place, any document in his possession that constitutes evidence of a fact relevant to the outcome of the case, unless that document contains confidential information.

23 It follows from Article 321(1) of the kpc that the court is prohibited from ‘[adjudicating] on a matter not included in the claim or [ruling] ultra petita’.

24 In accordance with Article 339(1) and (2) of the kpc, a default judgment is to be delivered where the defendant was not present at the hearing and did not make oral or written submissions. In this case, the applicant’s statement of the facts set out in the application or in the pleadings served on the defendant prior to the hearing is to be accepted as correct, unless the facts raise doubts or are regarded as intended to circumvent the law.

25 The provisions of Directive 2008/48 have been transposed into Polish law by the ustawa o kredycie konsumenckim (Law on Consumer Credit) of 12 May 2011, consolidated text, as amended (Dz. U., 2016, item 1528). Article 41 of that law provides as follows:

‘1. A promissory note … of a consumer submitted to a creditor for the purposes of discharging or securing an obligation under a consumer credit agreement shall contain the clause “not to order” or another clause having the same meaning.

2. If the creditor accepts a promissory note … that does not contain the clause “not to order” and that promissory note … is transferred to another person, the creditor shall be obliged to make good the damage caused to the consumer by payment of the promissory note. …

3. Paragraph 2 shall also apply where the promissory note or cheque comes into the possession of another person against the creditor’s will.

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

26 Profi Credit Polska is a company established in Poland whose main object is to grant credit. That company concluded with each of the debtors consumer credit agreements under which the payment of the debts is secured by the issuance of an incomplete promissory note known as a ‘blank promissory note’, the amount of which is initially left blank. As a result of the borrowers’ failure to comply with their contractual obligations, Profi Credit Polska, which is also the payee of those notes, completed the notes by entering an amount on them.

27 Since 2016, Profi Credit Polska has brought before the referring court various applications seeking the payment of the sums indicated on those promissory notes.

28 That court states that, in all the disputes pending before it, the applicant is seeking to recover its debts solely on the basis of the promissory notes (‘the relationship under the promissory note’). Since the applicant has not put the credit agreements before the referring court, it is only in the first of the disputes in the main proceedings that, thanks to the actions of the defendant, that court has at its disposal the contract constituting the legal relationship underlying the promissory note obligation (‘the basic legal relationship’). In the other cases, the defendants did not take a position. Consequently, that court decided not to grant the applicant’s request to hear the cases by way of the order for payment procedure, but to deal with them by way of the ordinary procedure.

29 The referring court is uncertain, in the first place, whether, in accordance with Directives 93/13 and 2008/48, a seller or supplier acting as a lender may lawfully secure the repayment of a debt arising under a consumer credit agreement in respect of a borrowing consumer by means of a blank promissory note issued by the latter.

30 That court specifies that, following the issuance of a promissory note, an abstract obligation is created. It follows from national legislation that, in the event of a demand for payment based on a promissory note, the scope of the court’s review is limited to the relationship under the promissory note and cannot extend to the basic legal relationship giving rise to the relationship under the promissory note. According to that court, the fact that it is impossible for it to examine of its own motion whether the terms of the contract creating the basic legal relationship underlying the promissory note obligation can be declared unfair is not due to procedural limitations, but results simply from the specific probative value of the promissory note as a security that incorporates the debtor’s obligation.

31 The referring court states that, in order to comply with the requirements under Articles 10 and 103 of the Law on Bills of Exchange and Promissory Notes, blank promissory notes always require the conclusion between the maker and the payee of an agreement specifying how the promissory note is to be completed (‘the promissory note agreement’). In accordance with national case-law, the effect of that agreement is to ‘give the debtor the right to raise as a defence’ against the first creditor the fact that he ‘has not completed the promissory note in accordance with the provisions of the agreement, which indicates, in particular, a weakening of the abstract nature of the promissory note’.

32 Thus, according to that court, there is no doubt that the court hearing disputes such as those at issue in the main proceedings may verify whether the promissory note has been completed in accordance with the agreement concluded only in the event of an objection raised by the debtor. In proceedings relating to promissory notes, the national court therefore has no legal basis to examine of its own motion the basic legal relationship unless the defendant raises an objection, which has the effect of broadening the scope of the dispute so that it also includes the basic legal relationship.

33 In the second place, the referring court is uncertain of the scope of its powers and obligations in an action for payment brought by a seller or supplier against a consumer on the basis of a promissory note. In the context of the Court’s case-law on the powers and obligations of a national court hearing disputes falling within the scope of Directive 93/13 and in particular on the obligation to examine of its own motion the unfairness of a term in a contract that is subject to its assessment, that court wishes to know whether such case-law is also applicable to the terms of a contract concluded by a consumer in a dispute where the seller or supplier is pursuing the recovery of a debt on the basis of a blank promissory note securing the settlement of that debt. The questions of that court also concern the effect of such an examination in the light of the principle that the subject matter of an action is defined by the parties, as set out in Article 321(1) of the kpc, according to which the judge may not rule on any head of claim other than those in the action or rule ultra petita.

34 In those circumstances, Sąd Rejonowy dla Warszawy Pragi-Południe w Warszawie (District Court for Warszawa Praga-Południe, in Warsaw, Poland) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Do Articles 3(1), Article 6(1) and Article 7(1) of Directive 93/13 and Directive 2008/48, including, in particular, Article 10, Article 14, Article 17(1) and Article 19, preclude a provision of national law which allows a claim of a creditor who is a seller or supplier against a borrower who is a consumer to be secured by a blank promissory note?

(2) Should Article 6(1) and Article 7(1) of Directive 93/13 be interpreted as imposing on the court hearing the case in proceedings referred to in the first question an obligation to examine of its own motion whether the provisions of the contract that creates the basic legal relationship underlying the promissory note obligation do not contain unfair contractual terms, even where the seller or supplier who is the applicant bases his claim exclusively on the legal relationship created by the promissory note?’

35 The dispute at issue in the main proceedings between Profi Credit Polska and OH involves circumstances comparable to those at issue in Case C‑419/18.

36 By its judgment of 15 May 2017, the Sąd Rejonowy w Opolu (District Court, Opole, Poland) dismissed the action brought by Profi Credit Polska against OH concerning the payment of the sum of 9 494.21 Polish zlotys (PLN) (approximately EUR 2 211.69).

37 Although the conditions for the delivery of a judgment by default were met, the court of first instance dismissed Profi Credit Polska’s application as it had doubts as to the actual content of the contractual relationship between the parties because it had not been able to analyse the terms of the loan agreement. Despite that court requiring Profi Credit Polska to put before it the promissory note agreement and the loan agreement, its request went unanswered. In addition, it would appear from other standard contracts concluded by that company that there is a significant difference between the amount borrowed and the amount needing to be repaid.

38 Since Profi Credit Polska took the view that, in order to redeem a promissory note, it was obliged only to present it duly completed and signed, it appealed against the decision at first instance.

39 The referring court is uncertain whether a court hearing an action based on a promissory note which is brought by an applicant who is a seller or supplier (‘the payee’) against a consumer may examine of its own motion complaints concerning the basic legal relationship where it has information relating to the potential irregularity of that relationship, but does not, however, have at its disposal the consumer credit agreement. After having noted that national case-law attaches particular importance to the promissory note agreement where a blank promissory note has been issued, that court notes that the source of the promissory note obligation is that contract, even if the obligation and the corresponding right arise only after the payee has completed the wording of the promissory note.

40 In those circumstances, the Sąd Okręgowy w Opolu, II Wydział Cywilny Odwoławczy (Regional Court, Opole, Second Civil Appeal Division, Poland) decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:

‘Should Directive 93/13, in particular Article 3(1) and (2), Article 6(1) and Article 7(1) thereof, and Directive 2008/48, in particular Article 22(3) thereof, be interpreted as precluding an interpretation of Article 10, in conjunction with Article 17, of the Law on Bills of Exchange and Promissory Notes according to which a court is not permitted to act of its own motion in a situation where it has a strong and justified belief, based on materials not originating from the parties to the case, that the contract giving rise to the basic legal relationship is at least partially invalid, and the applicant pursues his claim under a blank promissory note while the defendant raises no pleas and behaves passively?’

41 First, it should be noted that Directive 2008/48 did not effect harmonisation in the use of promissory notes as security for the payment of a debt resulting from consumer credit, which means that Article 22 of that directive is not applicable in circumstances such as those at issue in the main proceedings (see, to that effect, judgment of 13 September 2018, Profi Credit Polska, C‑176/17, EU:C:2018:711, paragraphs 34 to 37).

42 Second, the right of withdrawal and the calculation of the annual percentage rate of charge are not the subject of the disputes at issue in the main proceedings, which means that Articles 14 and 19 of that directive are also not applicable in such circumstances.

43 Finally, Article 17 of that directive is also irrelevant since the questions referred for a preliminary ruling do not concern a transfer of the creditor’s rights to a third party, as referred to in that article.

44 Consequently, since Articles 14, 17, 19 and 22 of Directive 2008/48 are not relevant to the main proceedings, the questions raised will be answered only in the light of Articles 3(1), 6(1) and 7(1) of Directive 93/13 and Article 10 of Directive 2008/48.

45 By its first question, the referring court asks, in essence, whether Articles 3(1), 6(1) and 7(1) of Directive 93/13 and Article 10 of Directive 2008/48 must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which makes it possible to secure the payment of a debt arising under a consumer credit agreement concluded between a seller or supplier and a consumer by means of a blank promissory note.

46 As a preliminary point, it is to be noted that, in EU policies, the protection of consumers — who are in a weaker position in relation to sellers or suppliers, inasmuch as they must be deemed to be less informed, economically weaker and legally less experienced than the opposite party — is enshrined in Article 169 TFEU and Article 38 of the Charter of Fundamental Rights of the European Union (judgment of 27 March 2019, slewo, C‑681/17, EU:C:2019:255, paragraph 32 and the case-law cited).

47 In that context, it should be borne in mind, first, that, under Article 6(1) of Directive 93/13, it is for the referring courts to exclude the application of the unfair terms so that they do not produce binding effects with regard to the consumer, unless the consumer objects (judgment of 26 March 2019, Abanca Corporación Bancaria and Bankia, C‑70/17 and C‑179/17, EU:C:2019:250, paragraph 52 and the case-law cited). Second, Article 7(1) of Directive 93/13, read in conjunction with the 24th recital thereof, provides that Member States must ensure that, in the interests of consumers and of competitors, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers (judgment of 3 April 2019, Aqua Med, C‑266/18, EU:C:2019:282, paragraph 42 and the case-law cited).

48 In the first place, it is to be noted that although the national legislation at issue in the main proceedings permits the issuance of a promissory note in order to secure payment of the debt arising under a consumer credit agreement, the obligation to issue such a note arises not from that legislation, but from the credit agreements concluded between the parties.

49 It should also be pointed out that the promissory notes at issue in the main proceedings have particular characteristics. Those notes were initially incomplete as they were blank when issued, that is to say, the amount was yet to be entered. The amounts are subsequently entered on those promissory notes unilaterally by the seller or supplier.

50 In that respect, it is apparent from Articles 10 and 101 of the Law on Bills of Exchange and Promissory Notes that, while including the amount payable is usually a condition for the validity of a promissory note, it is possible to issue a blank promissory note provided that a promissory note agreement determines the detailed rules in accordance with which that note may subsequently be lawfully completed by the lender.

51 According to Articles 1(1) and 3(1) of Directive 93/13, that directive applies to the terms of contracts concluded between a seller or supplier and a consumer which have not been individually negotiated (judgments of 9 September 2004, Commission v Spain, C‑70/03, EU:C:2004:505, paragraph 31, and of 9 November 2010, VB Pénzügyi Lízing, C‑137/08, EU:C:2010:659, paragraph 50, and order of 14 September 2016, Dumitraș, C‑534/15, EU:C:2016:700, paragraph 25 and the case-law cited).

52 In so far as, first, the payment of the debt arising under a consumer credit agreement is secured by a provision requiring the issuance of a blank promissory note and, second, national legislation requires the conclusion of a promissory note agreement, that provision and agreement may fall within the scope of Directive 93/13.

53 In the second place, Directive 93/13 obliges Member States to provide for a mechanism ensuring that every contractual term not individually negotiated may be reviewed in order to determine whether it is unfair. In that context, it is for the national court to determine, taking account of the criteria laid down in Article 3(1) and Article 5 of Directive 93/13, whether, having regard to the particular circumstances of the case, such a term meets the requirements of good faith, balance and transparency laid down by that directive (judgment of 26 March 2019, Abanca Corporación Bancaria and Bankia, C‑70/17 and C‑179/17, EU:C:2019:250, paragraph 50 and the case-law cited).

54 In accordance with Article 3(1) of that directive, a contractual term which has not been individually negotiated is to be regarded as being unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.

55 According to settled case-law, in order to ascertain whether a term may be categorised as ‘unfair’, the national court must assess whether the seller or supplier, dealing fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to such a term in contract negotiations (see, to that effect, judgment of 14 March 2013, Aziz, C‑415/11, EU:C:2013:164, paragraph 69, and order of 22 February 2018, Lupean, C‑119/17, not published, EU:C:2018:103, paragraph 30 and the case-law cited).

56 It should also be noted that neither the provision obliging the borrower to issue a blank promissory note in order to secure the debt owed to the lender under the contract nor the promissory note agreement can be considered to relate either to the definition of the main subject matter of the contract or to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplied in exchange, on the other, within the meaning of Article 4(2) of Directive 93/13.

57 Further, the assessment of whether that provision and the promissory note agreement are unfair will have to take into account both the requirement relating to a significant imbalance and the requirement of transparency which flows from Article 5 of Directive 93/13. Indeed, it is settled case-law that information, before concluding a contract, on the terms of the contract and the consequences of concluding it is of fundamental importance for a consumer. It is on the basis of that information in particular that the consumer decides whether he wishes to be bound by the terms previously drawn up by the seller or supplier (judgment of 21 December 2016, Gutiérrez Naranjo and Others, C‑154/15, C‑307/15 and C‑308/15, EU:C:2016:980, paragraph 50 and the case-law cited).

58 It follows that a national court hearing disputes such as those at issue in the main proceedings must determine whether the consumer has received all the information that may have an impact on the scope of his or her obligations and that enables him or her to assess, in particular, the procedural consequences of securing debts arising under a consumer loan contract by means of a blank promissory note and the possibility of subsequent recovery of the debt solely on the basis of that note. In the context of this assessment, and in accordance with the 20th recital of Directive 93/13, what is decisive is whether the contractual term in question is drafted in plain, intelligible language and whether the consumer has actually been given the opportunity to examine its content.

59 It should also be noted that the Court has previously ruled that Article 10(2) of Directive 2008/48 requires a national court hearing a dispute concerning claims based on a credit agreement within the meaning of that directive to examine of its own motion whether the obligation to provide information laid down in that provision has been complied with and to establish the consequences which follow under national law of any infringement from that obligation, provided that the penalties satisfy the requirements of Article 23 of that directive (judgment of 21 April 2016, Radlinger and Radlingerová, C‑377/14, EU:C:2016:283, paragraph 74).

60 In the light of the considerations above, the answer to the first question in Case C‑419/18 is that Articles 1(1), 3(1), 6(1) and 7(1) of Directive 93/13 must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which, for the purpose of securing the payment of the debt arising under a consumer credit agreement concluded between a seller or supplier and a consumer, makes it possible to stipulate in that contract an obligation on the borrower to issue a blank promissory note, and which makes the lawfulness of the issuance of such a note subject to the prior conclusion of a promissory note agreement determining the detailed rules in accordance with which that note may be completed, provided that that stipulation and that agreement comply with Articles 3 and 5 of that directive and Article 10 of Directive 2008/48, a matter which is for the referring court to verify.

The second question in Case C‑419/18 and the question in Case C‑483/18

61 By the second question in Case C‑419/18 and the question in Case C‑483/18, the referring courts ask, in essence, whether Articles 6(1) and 7(1) of Directive 93/13 and Article 10 of Directive 2008/48 must be interpreted as meaning that where, in circumstances such as those at issue in the main proceedings, a national court has serious doubts as to the merits of an application based on a promissory note intended to secure the debt arising under a consumer credit agreement and that note was initially left blank when issued by the maker and subsequently completed by the payee, that court must examine of its own motion whether the provisions agreed between the parties are unfair and, in that respect, may require the seller or supplier to produce the document recording those provisions so that that court is able to verify that the rights that consumers derive from those directives are observed.

62 In the present instance, the uncertainty of the referring courts relates to two different situations as, in the first dispute in the main proceedings in Case C‑419/18, the national court has the consumer credit agreement available to it, whereas in the other disputes in the main proceedings, that is not the case.

63 In the first situation, it is apparent from the case-law of the Court that, where a court has available to it the necessary legal and factual elements, it is obliged to carry out an examination of its own motion of the terms that may be unfair (see, to that effect, judgment of 13 September 2018, Profi Credit Polska, C‑176/17, EU:C:2018:711, paragraph 42 and the case-law cited).

64 In the second situation, and in particular with regard to the clarifications given by the referring court in Case C‑483/18, which indicates that it does not have available to it the contract binding the parties to the dispute in the main proceedings, but is aware of the content of other contracts habitually used by the seller or supplier, it should be recalled that although, under Article 3(1) of Directive 93/13, that directive applies to clauses which have not been individually negotiated, which includes in particular standard form contracts, it cannot be considered that a court ‘has available to it the legal and factual elements’, within the meaning of the case-law referred to above, solely because it has an awareness of certain pro forma contracts used by the seller or supplier, without that court having in its possession the instrument recording the contract concluded between the parties to the dispute pending before it (see, to that effect, judgment of 13 September 2018, Profi Credit Polska, C‑176/17, EU:C:2018:711, paragraph 47).

65 In that regard, the Polish Government states in its observations before the Court that it is not uncommon that a promissory note agreement, despite being a separate contract from the credit agreement, is set out within the latter agreement.

66 In any event, it is apparent from settled case-law that it is for the national court to investigate of its own motion whether a term in the contract, concluded between a seller or supplier and a consumer, which is the subject of a dispute before it falls within the scope of the directive and, if it does, to assess whether such a term is unfair (judgments of 9 November 2010, VB Pénzügyi Lízing, C‑137/08, EU:C:2010:659, paragraph 56, of 14 June 2012, Banco Español de Crédito, C‑618/10, EU:C:2012:349, paragraph 44; and of 21 February 2013, Banif Plus Bank, C‑472/11, EU:C:2013:88, paragraph 24). Without effective review of whether the terms of the contract concerned are unfair, observance of the rights conferred by Directive 93/13 cannot be guaranteed (judgment of 13 September 2018, Profi Credit Polska, C‑176/17, EU:C:2018:711, paragraph 62 and the case-law cited).

67 It follows that, where a national court is hearing an application based on a promissory note which was initially left blank when issued and subsequently completed and is intended to secure a debt arising under a consumer credit agreement, and that court has serious doubts as to the merits of that application, Articles 6(1) and 7(1) of Directive 93/13 require that that court be able to demand the production of the documents on which that application is based, including the promissory note agreement, where under national law such an agreement constitutes a precondition for the issuance of such a promissory note.

68 It must also be noted that the considerations above do not contravene the principle, referred to by the referring court, that the subject matter of an action is to be defined by the parties. The national court’s requirement that the applicant produce the content of the document or documents on which his application is based simply forms part of the evidential framework of the proceedings, since the purpose of such a request is merely to verify the basis of the action.

69 With regard to Article 10(2) of Directive 2008/48, where the national court has, of its own motion, found an infringement of that provision, it is obliged to give due effect to all the consequences under national law resulting from such an infringement without waiting for the consumer to make an application to that effect, provided always that the principle of audi alteram partem has been complied with (see, to that effect, judgment of 21 April 2016, Radlinger and Radlingerová, C‑377/14, EU:C:2016:283, paragraph 71 and the case-law cited).

70 After establishing, on the basis of the matters of fact and law at its disposal, or which were communicated to it following the measures of inquiry which it undertook of its own motion to that end, that a term comes within the scope of the directive, if the national court finds that that term is unfair, it is, as a general rule, required to inform the parties to the dispute of that fact and to invite them to set out their views on that matter, with the opportunity to challenge the views of the other party, in accordance with the formal requirements laid down by the national rules of procedure (judgment of 21 February 2013, Banif Plus Bank, C‑472/11, EU:C:2013:88, paragraph 31).

71 In the present instance, according to the Polish Government, Article 10 of the Law on Bills of Exchange and Promissory Notes does not prevent a national court from finding that the debt arising under a promissory note does not exist in so far as it exceeds the amount resulting from the promissory note agreement. It states that such a finding can be reached not only as a result of a consumer complaint, but also by the court of its own motion, in accordance with the Court’s case-law on the subject. Similarly, since the promissory note agreement is a condition for the issuance of a blank promissory note that can subsequently be completed, its raison d’être lies precisely in the fact that it makes it possible to control how that type of note is used and the amount that is subsequently entered on it.

72 However, according to the referring courts, they can verify whether the promissory note has been completed in accordance with the agreement concluded only where an objection is raised by the debtor.

73 In that regard, it must be noted that the obligation on a Member State to take all the measures necessary to achieve the result prescribed by a directive is a binding obligation imposed by the third paragraph of Article 288 TFEU and by the directive itself. That duty to take all appropriate measures, whether general or particular, is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts (judgment of 21 April 2016, Radlinger and Radlingerová, C‑377/14, EU:C:2016:283, point 76 and the case-law cited).

74 In the present case, it is apparent from settled case-law that the obligation to examine of their own motion the unfairness of certain terms and the presence of mandatory information in a credit agreement constitutes a procedural rule placed on the courts (judgment of 21 April 2016, Radlinger and Radlingerová, C‑377/14, EU:C:2016:283, point 77 and the case-law cited).

75 Thus, when national courts apply domestic law, they are bound to interpret it, so far as possible, in the light of the wording and the purpose of the relevant directive in order to achieve the result sought by the directive (judgment of 21 April 2016, Radlinger and Radlingerová, C‑377/14, EU:C:2016:283, point 79 and the case-law cited).

76 In that context, it follows from the case-law of the Court that, where they cannot interpret and apply national legislation in accordance with the requirements of Directive 93/13, national courts are obliged to examine of their own motion whether the provisions agreed between the parties are unfair and, where necessary, are to disapply any national legislation or case-law which precludes such an examination (see, to that effect, judgments of 4 June 2009, Pannon GSM, C‑243/08, EU:C:2009:350, paragraphs 32, 34 and 35; of 14 June 2012, Banco Español de Crédito, C‑618/10, EU:C:2012:349, paragraph 42 and the case-law cited; and of 18 February 2016, Finanmadrid EFC, C‑49/14, EU:C:2016:98, paragraph 46).

77 It follows that the answer to the second question in Case C‑419/18 and the answer to the question in Case C‑483/18 is that Articles 6(1) and 7(1) of Directive 93/13 and Article 10(2) of Directive 2008/48 must be interpreted as meaning that where, in circumstances such as those at issue in the main proceedings, a national court has serious doubts as to the merits of an application based on a promissory note intended to secure the debt arising under a consumer credit agreement and that note was initially left blank when issued by the maker and subsequently completed by the payee, that court must examine of its own motion whether the provisions agreed between the parties are unfair and, in that respect, may require the seller or supplier to produce the document recording those provisions so that that court is able to verify that the rights that consumers derive from those directives are observed.

78 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.

1. Articles 1(1), 3(1), 6(1) and 7(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which, for the purpose of securing the payment of the debt arising under a consumer credit agreement concluded between a seller or supplier and a consumer, makes it possible to stipulate in that contract an obligation on the borrower to issue a blank promissory note, and which makes the lawfulness of the issuance of such a note subject to the prior conclusion of a promissory note agreement determining the detailed rules in accordance with which that note may be completed, provided that that stipulation and that agreement comply with Articles 3 and 5 of that directive and Article 10 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, a matter which is for the referring court to verify.

2. Articles 6(1) and 7(1) of Directive 93/13 and Article 10(2) of Directive 2008/48 must be interpreted as meaning that where, in circumstances such as those at issue in the main proceedings, a national court has serious doubts as to the merits of an application based on a promissory note intended to secure the debt arising under a consumer credit agreement and that note was initially left blank when issued by the maker and subsequently completed by the payee, that court must examine of its own motion whether the provisions agreed between the parties are unfair and, in that respect, may require the seller or supplier to produce the document recording those provisions so that that court is able to verify that the rights that consumers derive from those directives are observed.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Profi Credit Polska (Consumer protection - Credit agreements for consumers - Judgment) [2019] EUECJ C-419/18 (07 November 2019) URL: http://www.bailii.org/eu/cases/EUECJ/2019/C41918.html Cite as: [2019] EUECJ C-419/18, EU:C:2019:930, ECLI:EU:C:2019:930, [2020] 2 CMLR 8

Court of Justice of the European Communities (including Court of First Instance Decisions)