Avis juridique important

Judgment of the Court (First Chamber) of 14 March 1991. - Criminal proceedings against Patrice Di Pinto. - Reference for a preliminary ruling: Cour d'appel de Paris - France. - Consumer protection - Doorstep canvassing. - Case C-361/89. European Court reports 1991 Page I-01189

Summary Parties Grounds Decision on costs Operative part

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1. Approximation of laws - Protection of consumers in respect of contracts negotiated away from business premises - Directive 85/577 - Protected consumer - Concept - Trader canvassed with a view to the conclusion of an advertising contract concerning the sale of his business - Not covered

(Council Directive 85/577, Art. 2)

2. Approximation of laws - Protection of consumers in respect of contracts negotiated away from business premises - Directive 85/577 - National legislation extending to traders the protection provided by the directive - Whether permissible

(Council Directive 85/577, Art. 8)

1. A trader canvassed with a view to the conclusion of an advertising contract concerning the sale of his business is not to be regarded as a consumer protected by Council Directive 85/577 to protect the consumer in respect of contracts negotiated away from business premises.

It follows from Article 2 of that directive that the criterion for the application of protection lies in the connection between the transactions which are the subject of the canvassing and the professional activity of the trader: the latter may claim that the directive is applicable only if the transaction in respect of which he has been canvassed lies outside his trade or profession. Acts which are preparatory to the sale of a business are connected with the professional activity of the trader; although such acts may bring the running of the business to an end, they are managerial acts performed for the purpose of satisfying requirements other than the family or personal requirements of the trader.

2. Directive 85/577 does not preclude national legislation on canvassing from extending the protection which it affords to cover traders acting with a view to the sale of their business.

Article 8 of that directive, which leaves Member States free to adopt or maintain more favourable provisions to protect consumers in the field covered by the directive, cannot be interpreted as precluding those States from adopting measures in an area with which it is not concerned, such as that of the protection of traders.

In Case C-361/89,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Cour d' Appel de Paris (Court of Appeal, Paris) for a preliminary ruling in the criminal proceedings pending before that court against

Patrice Di Pinto

on the interpretation of Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises (Official Journal L 372, p. 31),

THE COURT (First Chamber),

composed of: G. C. Rodríguez Iglesias (President of the Chamber), Sir Gordon Slynn and R. Joliet, Judges,

Advocate General: J. Mischo,

Registrar: H. A. Ruehl, Principal Administrator,

after considering the written observations submitted on behalf of:

Mr Di Pinto, by Maître M. Hayat, of the Paris Bar,

the French Government, by E. Belliard, Sub-Director in the Directorate for Legal Affairs of the Ministry of Foreign Affairs, and C. Chavance, Principal Attaché in the Central Administration of the Directorate for Legal Affairs in the said Ministry, acting as Agents,

the United Kingdom, by R. M. Caudwell, of the Treasury Solicitor' s Department, acting as Agent,

the Commission of the European Communities, by M. Condou Durande, a Member of its Legal Department, and G. Pons, a French official on secondment to the Legal Department of the Commission, acting as Agents,

having regard to the Report for the Hearing,

after hearing oral argument from Mr Di Pinto, the French Government, the United Kingdom, represented by M. Paines, Barrister, and the Commission at the hearing on 14 November 1990,

after hearing the Opinion of the Advocate General delivered at the sitting on 12 December 1990,

gives the following

Judgment

1 By judgment dated 17 November 1989, which was received at the Court on 29 November 1989, the Cour d' Appel de Paris referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises (Official Journal L 372, p. 31, hereinafter referred to as "the directive").

2 The questions arose in the course of criminal proceedings brought against Mr Di Pinto for contravention of Law No 72-1137 of 22 December 1972 on the protection of consumers regarding canvassing and door-to-door selling (Official Gazette of the French Republic of 23 December 1972, hereinafter referred to as "the Law on canvassing"). As in the case of the directive, that Law provides that a consumer who is canvassed may renounce the effects of his undertaking within a period of seven days and that this option must be specified in the contract.

3 Mr Di Pinto is the manager of the private limited liability company Groupement de l' Immobilier et du Fonds de Commerce, which publishes a periodical entitled "GI Commerce. Le Partenaire du Commerçant et de la Franchise", in which businesses are advertised for sale. For the purpose of collecting such advertisements, Mr Di Pinto employs representatives to canvass, either at their homes or at their places of business, those traders who express an intention to sell their business during an initial contact by phone.

4 On 28 March 1989 the Tribunal de Grande Instance (Regional Court), Paris, imposed on Mr Di Pinto a one year suspended prison sentence and a fine of FF 15 000 for having, in July 1985 and during 1986 and 1987, contravened the Law on canvassing. Although Article 4 of that Law prohibits canvassers from requesting payment in cash before expiry of the seven-day period for reflection, the contracts concluded by the representatives of Mr Di Pinto in the course of their canvassing were accompanied by immediate payment of the price of the service, which varied between FF 3 000 and FF 30 000 depending on the format of the advertisement. In addition, the contracts did not refer to the consumer' s right of cancellation within the period for reflection.

5 Mr Di Pinto and the Public Prosecutor both appealed on 4 April 1989 against this judgment to the Cour d' Appel de Paris. On 7 July 1989, that court confirmed, by default, the judgment of first instance on the criminal liability of Mr Di Pinto and sentenced him to one year' s imprisonment and to a fine of FF 15 000. On 11 July 1989, Mr Di Pinto appealed against the enforcement of that judgment.

6 In the course of those proceedings he submitted that, contrary to what had been decided on several occasions by the French Cour de Cassation, traders canvassed in connection with the sale of their business were not entitled to the protection introduced by the Law on canvassing and that the Law would otherwise be contrary to the directive.

7 According to Article 1, the French Law on canvassing applies in principle to

"whosoever canvasses a natural person, or arranges for such a person to be canvassed, either at his home or at his place of work, for the purpose of offering for sale, hire or hire-purchase goods or objects of any kind whatsoever, or for the purpose of offering services".

8 Article 8(I)(e), however, excludes from the scope of the Law

"the sale, hire or hire-purchase of goods or objects or the provision of services offered for the requirements of an agricultural, industrial or commercial undertaking or a professional activity".

9 Article 1 of the directive provides that it shall apply to

"contracts under which a trader supplies goods or services to a consumer and which are concluded:

...

- during a visit by a trader

(i) to the consumer' s home or to that of another consumer;

(ii) to the consumer' s place of work;

where the visit does not take place at the express request of the consumer".

10 Article 2 provides that:

"' consumer' means a natural person who, in transactions covered by this directive, is acting for purposes which can be regarded as outside his trade or profession;

' trader' means a natural or legal person who, for the transaction in question, acts in his commercial or professional capacity, and anyone acting in the name or on behalf of a trader".

11 Pursuant to Article 9, Member States were required to comply with the directive by 23 December 1987 at the latest.

12 Being uncertain as to the proper interpretation to be given to the directive, the Cour d' Appel de Paris referred the following two questions to the Court of Justice for a preliminary ruling:

"(1) Is a trader canvassed at home in connection with the sale of his business entitled to the protection accorded to consumers by the Directive of the Council of the European Communities of 20 December 1985?

(2) Is Article 8(I)(e) of the Law of 22 December 1972 compatible with the aforementioned directive and the other provisions of Community law protecting consumers in cases of doorstep canvassing?"

13 Reference is made to the Report for the Hearing for a fuller account of the facts of the case in the main proceedings, the course of the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

The first question

14 In its first question, the Cour d' Appel de Paris seeks in substance to ascertain whether a trader who is canvassed for the purpose of concluding an advertising contract concerning the sale of his business must be regarded as a consumer entitled to protection under the directive.

16 Acts which are preparatory to the sale of a business, such as the conclusion of a contract for the publication of an advertisement in a periodical, are connected with the professional activity of the trader; although such acts may bring the running of the business to an end, they are managerial acts performed for the purpose of satisfying requirements other than the family or personal requirements of the trader.

17 The Commission, which favours the application of the directive in such a case, objects that a trader, when canvassed in connection with the sale of his business, finds himself in an unprepared state similar to that of an ordinary consumer. For that reason, it argues, traders ought also to be entitled to the protection which the directive confers.

18 That argument cannot be accepted. There is every reason to believe that a normally well-informed trader is aware of the value of his business and that of every measure required by its sale, with the result that, if he enters into an undertaking, it cannot be through lack of forethought and solely under the influence of surprise.

The second question

20 In its second question, the Cour d' Appel de Paris seeks in substance to ascertain whether the directive precludes national legislation on canvassing from extending the protection which it affords to cover traders acting with a view to the sale of their business.

Costs

24 The costs incurred by the French Government, the United Kingdom and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (First Chamber),

in answer to the questions referred to it by the Cour d' Appel de Paris by judgment dated 17 November 1989, hereby rules:

(1) A trader canvassed with a view to the conclusion of an advertising contract concerning the sale of his business is not to be regarded as a consumer protected by Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises;

(2) That directive does not preclude national legislation on canvassing from extending the protection which it affords to cover traders acting with a view to the sale of their business.