(Reference for a preliminary ruling from the Tribunal d’instance de Vienne)

(Directives 87/102/EEC and 90/88/EEC – Consumer credit – Consumer information – Annual percentage rate of charge – Variable interest rate – Renewal of an agreement)

Summary of the Judgment

Approximation of laws – Consumer protection in respect of consumer credit – Directive 87/102 – Consumer information – Obligation to provide information before each renewal of a credit agreement – None

(Council Directive 87/102)

Directive 87/02 for the approximation of the laws, regulations, and administrative provisions of the Member States concerning consumer credit does not require, before each renewal, on the existing terms and conditions, of a credit agreement for a specified period entered in the form of a credit facility that may be drawn down in instalments and is linked to a credit card, that is repayable in monthly instalments and bears an interest rate that is expressed to be variable, that the lender inform the borrower in writing of the current annual percentage rate of charge and of the conditions under which the latter may be amended.

(see para. 39, operative part)

JUDGMENT OF THE COURT (Fifth Chamber) 4 March 2004 (1)

(Directives 87/102/EEC and 90/88/EEC – Consumer credit – Consumer information – Annual percentage rate of charge – Variable interest rate – Renewal of an agreement)

In Case C-264/02,

REFERENCE to the Court under Article 234 EC by the Tribunal d'instance de Vienne (France) for a preliminary ruling in the proceedings pending before that court between

Sylvain Sachithanathan,

on the interpretation of Council Directive 87/102/EEC of 22 December 1986 for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit (OJ 1987 L 42, p. 48), as amended by Council Directive 90/88/EEC of 22 February 1990 (OJ 1990 L 61, p. 14),

THE COURT (Fifth Chamber),

composed of: P. Jann (Rapporteur), acting for the President of the Fifth Chamber, C.W.A. Timmermans and S. von Bahr, Judges,

Advocate General: A. Tizzano, Registrar: M. Múgica Arzamendi, Principal Administrator,

after considering the written observations submitted on behalf of:

– Cofinoga Mérignac SA, by J.-J. Gatineau, avocat,

– the French Government, by G. de Bergues and R. Loosli Surrans, acting as Agents,

– the Belgian Government, by A. Snoecx, acting as Agent,

– the United Kingdom Government, by P. Ormond and J. Turner, acting as Agents,

– the Commission of the European Communities, by M.-J. Jonczy and M. França, acting as Agents,

after hearing the oral observations of Cofinoga Mérignac SA, represented by J.-J. Gatineau, the French Government, represented by C. Lemaire, acting as Agent, and the Commission, represented by M.-J. Jonczy, at the hearing on 3 July 2003,

after hearing the Opinion of the Advocate General at the sitting on 25 September 2003,

gives the following

1 This request for a preliminary ruling concerns the interpretation of Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment (OJ 2012 L 26, p. 1), as amended by Directive 2014/52/EU of the European Parliament and of the Council of 16 April 2014 (OJ 2014 L 124, p. 1) (‘Directive 2011/92’).

2 The request has been made in proceedings between, on the one hand, Waltham Abbey Residents Association and, on the other hand, An Bord Pleanála (Planning Board, Ireland; ‘the Board’), Ireland and the Attorney General (Ireland), concerning authorisation granted by the Board for a strategic residential housing development.

Legal context

European Union law

Directive 2011/92

Recitals 7 to 9 of Directive 2011/92 state:

‘(7) Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out. …

(8) Projects belonging to certain types have significant effects on the environment and those projects should, as a rule, be subject to a systematic assessment.

(9) Projects of other types may not have significant effects on the environment in every case and those projects should be assessed where the Member States consider that they are likely to have significant effects on the environment.’

Article 2(1) of that directive provides:

‘Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in Article 4.’

Under Article 3(1) of that directive:

‘The environmental impact assessment shall identify, describe and assess in an appropriate manner, in the light of each individual case, the direct and indirect significant effects of a project on the following factors:

…

(b) biodiversity, with particular attention to species and habitats protected under [Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (“Directive 92/43”)] and Directive 2009/147/EC [of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7)];

…’

Article 4 of Directive 2011/92 provides:

‘1. Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.

(a) a case-by-case examination;

(b) thresholds or criteria set by the Member State.

Member States may decide to apply both procedures referred to in points (a) and (b).

Where a case-by-case examination is carried out or thresholds or criteria are set for the purpose of paragraph 2, the relevant selection criteria set out in Annex III shall be taken into account. Member States may set thresholds or criteria to determine when projects need not undergo either the determination under paragraphs 4 and 5 or an environmental impact assessment, and/or thresholds or criteria to determine when projects shall in any case be made subject to an environmental impact assessment without undergoing a determination set out under paragraphs 4 and 5.

Where Member States decide to require a determination for projects listed in Annex II, the developer shall provide information on the characteristics of the project and its likely significant effects on the environment. The detailed list of information to be provided is specified in Annex IIA. The developer shall take into account, where relevant, the available results of other relevant assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The developer may also provide a description of any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

The competent authority shall make its determination, on the basis of the information provided by the developer in accordance with paragraph 4 taking into account, where relevant, the results of preliminary verifications or assessments of the effects on the environment carried out pursuant to Union legislation other than this Directive. The determination shall made available to the public and:

(a) where it is decided that an environmental impact assessment is required, state the main reasons for requiring such assessment with reference to the relevant criteria listed in Annex III; or

(b) where it is decided that an environmental impact assessment is not required, state the main reasons for not requiring such assessment with reference to the relevant criteria listed in Annex III, and, where proposed by the developer, state any features of the project and/or measures envisaged to avoid or prevent what might otherwise have been significant adverse effects on the environment.

Member States shall ensure that the competent authority makes its determination as soon as possible and within a period of time not exceeding 90 days from the date on which the developer has submitted all the information required pursuant to paragraph 4. In exceptional cases, for instance relating to the nature, complexity, location or size of the project, the competent authority may extend that deadline to make its determination; in that event, the competent authority shall inform the developer in writing of the reasons justifying the extension and of the date when its determination is expected.’

Annex II.A of that directive contains the list of ‘information to be provided by the developer on the projects listed in Annex II’. That list reads as follows:

‘1. A description of the project, including in particular:

(a) a description of the physical characteristics of the whole project and, where relevant, of demolition works;

(b) a description of the location of the project, with particular regard to the environmental sensitivity of geographical areas likely to be affected.

3. A description of any likely significant effects, to the extent of the information available on such effects, of the project on the environment resulting from:

(a) the expected residues and emissions and the production of waste, where relevant;

(b) the use of natural resources, in particular soil, land, water and biodiversity.

Annex III to that directive sets out the ‘criteria to determine whether the projects listed in Annex II should be subject to an environmental impact assessment’.

Directive 2014/52

Recitals 11 and 29 of Directive 2014/52 state:

‘(11) The measures taken to avoid, prevent, reduce and, if possible, offset significant adverse effects on the environment, in particular on species and habitats protected under [Directive 92/43] and Directive 2009/147 …, should contribute to avoiding any deterioration in the quality of the environment and any net loss of biodiversity, in accordance with the [European] Union’s commitments in the context of the [United Nations Convention on Biological Diversity, signed in Rio de Janeiro on 5 June 1992,] and the objectives and actions of the Union Biodiversity Strategy up to 2020 laid down in the [Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions] of 3 May 2011 entitled ‘Our life insurance, our natural capital: an EU biodiversity strategy to 2020’ [(COM(2011) 244 final)]

…

(29) When determining whether significant effects on the environment are likely to be caused by a project, the competent authorities should identify the most relevant criteria to be considered and should take into account information that could be available following other assessments required by Union legislation in order to apply the screening procedure effectively and transparently. In this regard, it is appropriate to specify the content of the screening determination, in particular where no environmental impact assessment is required. Moreover, taking into account unsolicited comments that might have been received from other sources, such as members of the public or public authorities, even though no formal consultation is required at the screening stage, constitutes good administrative practice.’

Directive 92/43

Article 6(3) of Directive 92/43 provides:

‘Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.’

Article 12(1) of that directive provides:

‘Member States shall take the requisite measures to establish a system of strict protection for the animal species listed in Annex IV(a) in their natural range, prohibiting:

(a) all forms of deliberate capture or killing of specimens of these species in the wild;

(b) deliberate disturbance of these species, particularly during the period of breeding, rearing, hibernation and migration;

(c) deliberate destruction or taking of eggs from the wild;

(d) deterioration or destruction of breeding sites or resting places.’

Point (a) of Annex IV to that directive mentions ‘all species’ of bats belonging to the suborder of ‘microchiroptera’.

Irish law

On a proper construction of those directives, must the national court uphold the interpretation of its law which requires lending institutions to inform that consumer of the clause concerning the variation of that [APR] before each extension of such an agreement?

3.

On a proper construction of those directives, is the national court to uphold the interpretation of its law which permits it to allow, without any time-limit, a plea of illegality vitiating the formation or extension of a consumer credit agreement, such as that arising from a failure to state the [APR], raised by the consumer or by the court of its own motion, in a dispute arising from an action for payment brought by the lending institution?

If not, must the national court, on a proper construction of those directives, uphold the interpretation of its law which permits it to set aside a provision of its national law which prohibits the consumer or the court of its own motion from raising a plea of illegality vitiating the formation or extension of a consumer credit agreement after a time-limit which derogates from the general law, on the grounds that this would constitute an exceptional restriction on the right of action of the consumer and undermine the effectiveness of consumer protection?

The questions referred

The first and second questions

15

By these two questions, the national court is essentially asking whether the Directive should be interpreted as meaning that before each renewal, on the existing terms and conditions, of a credit agreement for a specified period entered into in the form of a credit facility that may be drawn down in instalments and is linked to a credit card, that is repayable in monthly instalments and bears an interest rate that is expressed to be variable, the lender is obliged to inform the borrower in writing of the current APR and the conditions under which it may be amended.

Observations submitted to the Court

16

Cofinoga and the French Government are of the opinion that the reply to these questions should be in the negative. The United Kingdom Government shares this view, at least where the renewal of the agreement falls to be treated as an extension of the original agreement.

17

In their view, in a case such as that of the disputed agreement, the lender’s obligations to provide information under Article 4 of the Directive do not apply to the renewal of the agreement. They rely in that regard both on the wording of Article 4 of the Directive, which makes it clear that it refers to the time when the agreement is entered into, and on the purpose of that article, which is to enable the consumer to assess the cost of the credit and compare it with other offers before committing himself.

18

Cofinoga and the French and United Kingdom Governments take the view, though for different reasons, that the lender’s obligations to provide information under Article 6 of the Directive are also inapplicable in the circumstances of the main proceedings. According to Cofinoga and the United Kingdom Government, that article does not apply because its scope is restricted to advances on a current account, except for advances linked to credit cards, which is not the case under the disputed agreement. In the opinion of the French Government, Article 6 of the Directive lays down a general rule, applicable to all agreements covered by the Directive, but which is relevant only where the agreement is amended. This does not apply to the renewal of the disputed agreement.

19

For their part, the Belgian Government and the Commission propose that the reply to the first two questions should be in the affirmative.

The Belgian Government, amplifying the concerns expressed by the United Kingdom Government, observes that in French law the renewal of a credit agreement is treated as the entering into of a new agreement. It follows, in its view, that the lender must provide the information required by Article 4 of the Directive on each renewal of the agreement.

21

The Commission is of the opinion that Articles 4 and 6 of the Directive lay down two sets of general rules and should for that reason be interpreted cumulatively. Noting that Article 4 provides that the agreement must be made in writing and include a statement of the APR, and that Article 6 provides that the consumer is to be informed, during the period of the agreement, of any change in the annual rate of interest or in the relevant charges at the time when it occurs, the Commission concludes that the consumer should be informed before each extension of the agreement of any change in the rate of interest.

Reply by the Court

22

In the light of the observations submitted to the Court, the first issue to be considered is whether Article 4 of the Directive should be interpreted as meaning that, where a credit agreement is renewed on the existing terms and conditions, the lender is required to inform the consumer of the APR.

23

The wording of Article 4 of the Directive does not indicate expressly when the information required under it is to be provided to the consumer. Nevertheless, the broad logic of this provision leaves the matter in no doubt. In providing that the credit agreement must be made in writing and that the written agreement must include a statement of the APR and the conditions under which it may be amended, Article 4(1) and (2) of the Directive clearly refers to the time when the agreement is entered into. This interpretation is supported by Article 1a of the Directive, which lays down rules for calculating the APR, and which states at paragraph (4)(a) that this is to be calculated ‘at the time the credit contract is concluded’.

24

As neither the wording of Article 4 of the Directive nor the broad logic of the scheme established by that provision support an interpretation according to which the consumer must be informed of the APR on the renewal of a credit agreement on the existing terms and conditions, the issue arises whether the ends pursued by the Directive require that the consumer be informed at this time.

25

It should be noted in that regard that it is clear from the recitals in the preamble thereto that the Directive was adopted with the dual aim of ensuring both the creation of a common market in consumer credit (third to fifth recitals) and the protection of consumers who avail themselves of such credit (sixth, seventh and ninth recitals) (Case C-208/98 Berliner Kindl Brauerei [2000] ECR I-1741, paragraph 20).

Informing the consumer of the total cost of credit, in the form of an interest rate calculated according to a single mathematical formula, is of critical importance in this regard. First, this information, which, under Article 3 of the Directive, must be stated in any advertising, contributes to the transparency of the market, as it enables the consumer to compare offers of credit. Secondly, it enables the consumer to assess the extent of his liability.

27

In the light of these aims, and as the Advocate General has noted in point 53 of his Opinion, it appears that the information in question will be particularly useful if it is provided to the consumer at the decisive phase which precedes the entering into of the agreement. Thereafter, for example when the agreement is renewed on its existing terms and conditions, this information, which has already been provided, would appear to be of less importance.

28

It follows that, in the absence of express provision to that effect, and in the absence of factors which, on the basis of the broad logic or the aims of the Directive, might lead to the inference that Article 4 of the Directive should be broadly construed, that provision cannot be interpreted as meaning that it requires the lender to inform the consumer of the APR prior to the renewal of a credit agreement on the existing terms and conditions.

29

The fact that, according to the information provided by the national court, the renewal of a credit agreement is treated in French law not as the extension of the original agreement, but as the entering into of a new agreement, does not affect this analysis. As the Advocate General points out in point 43 of his Opinion, the objective of harmonisation underlying the Directive would be frustrated if the interpretation of the rules laid down under it were to depend on the specific provisions of the national law of a particular Member State.

30

In the light of the interpretation to be given to Article 4 of the Directive, it is then appropriate to consider whether Article 6 of the Directive should be interpreted as meaning that, where a credit agreement is renewed on the existing terms and conditions, the lender is required to inform the consumer of the APR.

31

Having regard to the observations submitted to the Court, the scope of that provision must first be determined.

32

Article 6(1) of the Directive states that: ‘notwithstanding the exclusion provided for in Article 2(1)(e), where there is an agreement between a credit institution or financial institution and a consumer for the granting of credit in the form of an advance on a current account, other than on credit card accounts’, the consumer must be informed ‘at the time or before the agreement is concluded’ of those terms and conditions of the agreement specified in the remainder of the provision. Article 6(2) adds that: ‘furthermore, during the period of the agreement, the consumer shall be informed of any change in the annual rate of interest or in the relevant charges at the time it occurs’. It is thus clear from the wording of Article 6 that Article 6(2) refers to the same agreements as those covered by Article 6(1).

33

It is also equally clear from the wording of Articles 2, 4 and 6 of the Directive that the broad logic of the scheme which they establish means that Article 6 lays down a special rule applicable to a type of agreement which is otherwise excluded from the scope of the general rules laid down under the Directive.

34

Article 2(1)(e) of the Directive excludes from its scope credit granted in the form of advances on a current account other than on credit card accounts. For credit granted in the form of advances on a current account, Article 6(2) of the Directive obliges the lender to provide the consumer with information which is not required under Article 4 of the same directive, while Article 6(1) obliges the lender to provide to the consumer the information specified in it, which does not include the APR.

35

Furthermore, the second subparagraph of Article 4(2) of the Directive provides that in cases where it is not possible to state the APR at the time at which the agreement is entered into, the consumer should none the less be provided with ‘adequate information’ in the written agreement, including ‘at least … the information provided for in the second indent of Article 6(1)’. As the Advocate General has noted in point 73 of his Opinion, there would be no need whatever for an express reference of this kind if Article 6 applied in its own right to all agreements subject to the Directive.

36

It follows that Article 6 applies only to those agreements expressly referred to in it, that is to say, credits in the form of an advance on a current account, other than on credit card accounts.

37

It is common ground that the disputed agreement does not fall within that category.

38

That being so, the rules laid down under Article 6 of the Directive cannot be relevant for determining the obligations to provide information imposed on the lender in a case such as that which is the subject of the main proceedings.

39

In the light of the foregoing, the answer to the first and second questions must be that the Directive does not require, before each renewal, on the existing terms and conditions, of a credit agreement for a specified period entered into in the form of a credit facility that may be drawn down in instalments and is linked to a credit card, that is repayable in monthly instalments and bears an interest rate that is expressed to be variable, that the lender inform the borrower in writing of the current APR and of the conditions under which the latter may be amended.

The third and fourth questions

40

In light of the answer to the first and second questions, there is no need to reply to the third and fourth questions.

Costs

41

The costs incurred by the French, Belgian and United Kingdom Governments and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Fifth Chamber),

in answer to the questions referred to it by the Tribunal d’instance de Vienne by judgment of 5 July 2002, hereby rules:

Jann

Timmermans

von Bahr

Delivered in open court in Luxembourg on 4 March 2004.

Registrar

President of the Fifth Chamber

1 – Language of the case: French.