Successful claim against Macdonald Resorts

We submitted a claim in the Spanish Court against Macdonald Resorts Spain S.A. Leila Playa Club for the nullity of the purchase contracts signed in 2003 and 2008 on the grounds of breach of the Spanish Timeshare Law 42/1998, as the Resort did not comply with their statutory duties of providing a general description of the proposed accommodation, and information on the consumer's right of withdrawal. Furthermore the resort made an infringement of the maximum period of 50 years that a contract of this type can be made and the consumers signed the contract under misrepresentation. To support the claim, we provided, among other documents, the purchase contracts.

Regarding misrepresentation, Macdonald Resorts said in their defense it was not a misrepresentation as the claimants knew and understood the product. They also defended that they did not infringe the maximum period of 50 years as the Law 42/1998 is not applicable in the present case because their system was created before the enactment of that statutory instrument.

The Judge rejected the Resort's contentions: “In relation to the applicable law to the present case, we must look at the Law 42/1998, in which the contentious contract should give the claimants the right to use more than one accommodation, for a fixed price, for more than three years, permanent but without the owner condition, therefore we are clearly facing a contract that confers a personal right to use multiple accommodations for a fixed period superior to three years but inferior to 50 years. This is the type of contract stated as null and void by the article 1.7 of the Law 42/1998. The aforementioned purchase contracts are therefore null and void”

About the defendant pleading of the inapplicable law, the judge said it has to be rejected on the grounds that any previous systems similar to timeshare that exceeds the limit by the law should be deemed fraudulent and null and void (art. 1.7); the D.T. 2ª is inspired on the respect of the acquired rights, it covers the timeshare rights acquired before the law came into force according to the agreed system, but in any way allows the rights not transferred to infringe the legal rules; these must respect the new law (STS 477/2014, 15th January 2015)

The judge found the purchase contract did not comply with the requirements of the artículo 1 Law 42/1998, as the Resort did not provide the description of the different accommodations that consumers could use, nor the real possibilities to make a reservation.

Furthermore, the Judge said that we are in the frame of an unilateral contract, where the supplier (Resort) sets the terms and conditions, without there being real equality between each party. The clients were offered products and advantages without respecting the necessary cooling off period, nor the necessary time lapse between the explanation of the product and the signing of the contract.

The claim was allowed and the judge found the contract null and void on the legal grounds of an infringement of the Spanish Consumer legislation. The same reasoning appears in another case (Sentencia de la Audiencia Provincial de Málaga 7th November 2005) in which the Court of Appeal ruled the contract should be deemed null and void on the grounds that the vendor did not comply his legal obligation in order to provide information to the consumer about the accommodation and services offered.

The Judge also said that the clients were not correctly informed of the contract terms and conditions; the documentation given did not abide with the requirements to ensure the client was informed correctly.

We claimed that Macdonald Resorts had to pay compensation for the delay in the payment, this being, the legal interest of the owed sum since the interjection of the demand until the payment was completed.

Decision

1. The contract between both parties is deemed null and void, plus any other annexed to said contract.
2. Macdonald Resorts must reimburse the clients the sum of 11,839.22&pounds, plus the accrued interest since the 17th of September of 2015 until the payment is completed.
3. Macdonald Resorts Spain S.A. Leila Playa Club must also pay the costs incurred in this instance.