Foreign Currency Loans – Real Estate Mortgage Litigation Postponed

On December 12, Good Finance Zrt. Postponed the announcement of the second instance decision in the foreign currency loan lawsuit of Good Finance Zrt. On Monday in Budapest.

The case was already decided at second instance in October

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At which time the court set aside the first instance decision due to a procedural violation and ordered the Metropolitan Court of First Instance to reconsider. The court delivered its judgment on November 4, partially upholding the claim of the plaintiff Good Finance Zrt. The court then stated that the provisions of the General Terms and Conditions, effective from 1 January 2010 and subsequent periods, which allow for increases in fees and expenses, are in accordance with all legal principles and are therefore fair and valid.

In addition, the court dismissed the action in so far as it was not covered by the Law on Foreign Currency Lending or because it infringed the principle of transparency. Both the applicant credit institution and the defendant Hungarian State appealed against the decision.

The plaintiff requested the initiation of a special norm-control procedure

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Before the Constitutional Court (Ab) and the suspension of the trial. He also requested that the proceedings be stayed pending the outcome of the ongoing litigation and of the proceedings pending at Mr Ab’s request for a preliminary ruling. It stated in its appeal that the action also referred to sectoral administrative law obligations. Such is the provision in force since 2013, which obliges the introduction of internal rules for pricing principles.

This specifies that the contract must include the list of the occluders, the pricing principles and the main principles of the procedure in the event of the occult occurrence. The applicant credit institution would have erred in including the content of the pricing principles in the contracts at the same time, since the legislature’s intention was obviously to keep the regulation as detailed as possible in the contract.

And the part of the Banking Regulations which, due to its nature and complexity, cannot be described in contractual terms, would not be comprehensible to the consumer in the absence of expertise. Compliance with this requirement is subject to supervision by the consumer, the applicant noted. In its view, it is irrelevant that pricing principles are not public for the consumer, as this is a consequence of the legislation.

Transparency is ensured by the terms of the loan agreement

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And the pricing principles, he said. In its appeal, the defendant applied for an amendment of the judgment at first instance, the dismissal of the applicant’s application in its entirety and an increase in the amount of the costs. On the application of partial invalidity, he explained: the law establishes a presumption of unfairness for the whole of the contractual clauses, treated as a unit. It follows that the contractual clause allowing unilateral amendment of the contract cannot be further subdivided. The defendant argued that if the court highlights some of the reasons while leaving others intact, it will create a limited list of reasons to change the parties’ contractual will. Due to a mix of valid and invalid reasons, any settlement may also become opaque.

In his appeal, the plaintiff stated in relation to the partial invalidity that there is nothing to preclude the court from subdividing the individual grounds for amendment of the contract, the list of documents. They are self-explanatory and often unrelated to one another, ”he added. It cannot be inferred from the law that if the court creates a new modified list, it will replace the contractual will of the parties.

In its defense, the defendant stated that each of the elements of the foreclosure had been examined individually by the court and it was correct to conclude that it did not comply with the principle of transparency. There was nothing to prevent the plaintiff from incorporating the pricing principles into the consumer contract, he added.

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