“Paola Faccini Dori v Recreb Srl (1994) C-91/92”;
Commentary
The case brought between Paola Faccini Dori and Recreb Srl was brought before the Court in March 1992. The case was brought for a preliminary ruling under Article 177 of the EEC Treaty for the interpretation of Council directive 85/577/EEC. The directive concerns the protection of the consumer in contracts negotiated away from business premises (OJ 1985 L 372, pg. 31, hereinafter “the directive”). The main question was if the directive could be relied on in preceding’s between a trader and a consumer.
On January 19th, 1989 Miss Faccini Dori and Interdiffusion SRL concluded a contract for an English Language correspondence court away from Interdiffusion’s business premises at Milan Central Railway station. Miss Faccini Dori had not been previously approached by Interdiffusion Srl. A letter dated the 23rd of January 1989 was received by the company informing them that Miss Faccini Dori was canceling her order. The company replied on June 3rd the company replied stating it had assigned Recreb to her case and on the 24th of June Miss Faccini Dori wrote Recreb to confirm she had indeed canceled her subscription implying she was using the directive to prove a right to cancel.
The directive is aimed to protect consumers and fix any discrepancies between national law in aims of strengthening the common market, It appears in the preamble of the directive that when business is done away from the business premises of the trader, the trader who handles the initial negotiates of the contract often catch the consumer by surprise leaving the consumer unprepared without being able to do such things as compare prices, compare quality, and come to an educated decision. This includes such thing as door to door sales, but also covers contracts where the trader is the one to initiate contracts away from the business premises. The directive’s purpose is to allow the consumer to cancel within the cancellation period of at least seven days. This allows the consumer to become fully aware of all obligations that arise in the contractual agreement and to be able to make an educated decision.
June 30th 1989 Recreb went to the Giudice Conciliatore di Firenze asking for them to step in and order Miss Faccini Dori to pay, with interest, the agreed upon amount that was in the contract. November 20th of the same year a judge ordered payment of Miss Faccini Dori. Miss Faccini Dori then objected to the order stating she had already removed herself from the contract following the directives instructions on how to do so.
Italian law at the time had not yet taken steps to intergrade the directive into national law even though the time in which they were given to implement the directive into their national law was December 23rd 1987 and had already expired. The directive was not implemented until March 3rd 1992 with the addition of the adoption of another legislative act.
Since the directive had not been transposed into national law during the material time of the claim the national court was indecisive if the directives provisions could be ultimately applied. The national court then referred the question to the Court for a preliminary ruling.
One of the two questions it referred to the Court was if the provisions in the directive dealing with cancellation are unconditional and sufficiently suffice.
In this regard The Court stated that Article 1(1) says the directive applied to contracts made with a consumer when the trader, who is providing goods and services, had independently organized to do business outside of its business premises including visits to the consumer’s home, work, or whenever the visit was not requested by the consumer to occur outside the business premises.
The Court continued to analyze article 2 of the directive. The Court concluded that ‘consumer’ is a natural person who, only in contracts covered by the directive, acts outside of their profession or trade while the ‘trader’ is a natural or legal person who, only in contracts covered by the directive in Article 1(1), acts within his profession or commercial specialty.
The Court decided that these two provisions are sufficiently precise. With the directive being sufficiently precise the national court should have been enabled to determine who the obligations are imposed on and who benefits from those obligations. The Court found that the national court could have narrowed itself to just looking at if the contract was done in the same type of situation the directive describes and if it was done between a trader and a consumer under the directives definitions.
The Court as well analyzed Article 4 of the directive stating that the directive provides provision which state that the trader must give the consumer written notice for their right of cancellation as prescribed along with the person and address to which the consumer can give that written notice and exercise their right of cancellation. Article 4 continues to add that if situations as described in Article 1(1) arise, the trader is obligated to provide this information at the conclusion of the contract. The last part of Article 4 goes into how member states are supposed to enact appropriate consumer protection legislation if the case arises where the information in question is not available or supplied to the national court.
The Court continued to say that in line with Article 5(1) of the directive, the consumer may cancel by sending correct notice within an appropriate period of time, no less than 7 days from the time when the trader informed the consumer of his rights to do so. Article 5(2) adds that as long as notice is given in accordance to the directive and national laws, the notice has the same effect as releasing the consumer from contractual obligations under that contract.
The Court did however state that while Articles 4 and 5 did give member states some leeway when dealing with when information is not provided by the trader to the consumer, but that the directive in this case, does not apply those provisions since Miss Faccini Dori supplied the trader with a notice of cancellation within the minimum protected time of seven days from the day the contract was concluded. The seven-day minimum is the minimum protection provided by the directive to the consumer and the trader.
The court concluded that the directive in the capacity of concerning the rights of cancelation, was both unconditional and sufficiently precise using Article 1(1), Article 2, and Article 5.
The second question brought before the Court was weather the provision in the directive can be invoked in proceedings between a consumer and a trader. The court states that this question was more intertwined with the question of if the directive can be invoked by the consumer for a right of cancellation against traders in which they concluded a contract with when the directive had not been properly transposed by national law within its prescribed material time, and if that consumer would be able to have that right enforced by the national court.
To analyze this problem, the Court stated the Court has held since the judgment in Case 152/84 Marshall v Southampton and South-West Hampshire Health Authority [1986] ECR 723, paragraph 48, a directive cannot of itself impose obligations on an individual and cannot therefore be applied upon as such against an individual. It continued to argue that national courts should observe that if the effects of directives which are unconditional and of sufficient precision but went unimplemented in the material time given, it would limit the relationships between state entities and individuals. This would mean that legislative materials would work as so in certain legal matters, but that under all modern states the State is subject to the law just as any individual is subjected to the law. If the directive could only be used against the State that while there would be penalty for not implementing law needed to adopt the directive. It would look at the situation as a purely private relationship. The court as well stated that relying on directives against the state is based on Article 189 which states that a directive is binding on Member States to which the directive is addressed and case law tried to help prevent Member States reaping benefits from its failure to comply with Community law. It follows that the idea of extending case law into the relations between individuals (in this case the consumer Miss Faccini Dori and trader Recreb Srl) would ultimately be recognizing a Community power to adopt obligations to those individuals, effective immediately, when their competence does not allow so unless the Community is empowered to adopt regulations.
The Court concluded that if the measures needed to transpose a directive are not taken within the material time given, a consumer cannot use the directive itself as a way to derive a right of cancellation against a trader in which they have concluded a contract with or to attempt to use that directive to enforce a right of cancellation under a national court.
The Court continues that member states are obligated to implement directives as prescribed by law under Article 5 of the Treaty and that all member states addressed in the directive must make appropriate measures to achieve the desired results of the directive. The member state’s national court when applying national law must do so while keeping in mind the directive’s vision and wording as laid out in Article 189 of the Treaty.
If it is impossible to tell what the vision of the directive is through interpretation, the Court stated that under case law, Member States are obligated to handle the damages occurred to individuals for the failure of implementing the directive if three conditions are fulfilled. The first condition as stated by the Court is that the purpose of the directive must be to grant rights to individuals. The second condition is that the rights being granted to individuals must be identifiable on the basis of the provisions in the directive itself. The last condition is the breach of the Stat’s obligations and the damage suffered must hold a causal link.
The Court applied those conditions to the case of Miss Faccini Dori. The Court identified the directive in question as one with the purpose of granting individual rights in contacts that are negotiated away from the place of business and that those rights are identifiable in the provisions of the directive. The Court continued to state that if the damage was due to the fact the State breached their obligation, the national court of the State to uphold the right of the consumer and obtain compensation in line with the liability law of the State.
The Court concluded that on the second issue the national court brought to them, because the Member State did not implement the directive within the material time given the consumer cannot use that directive itself to invoke a right of cancellation against the contract with the trader. Even so, applying the national law provisions, no matter when they were implemented, the national court must interrupt the national law as extreme as possible in light of both the directives purpose and the wording of the directive.
Since a directive that has direct effect, such as the one in this case, the Court did the right thing.