Cyprus Banks taking legal action in UK

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Janner
Posts: 42
Joined: 07 Dec 2010 12:41

Cyprus Banks taking legal action in UK

Post by Janner »

Hello,

I understand that Cyprus Banks can take legal action against people who are not paying their mortgage. All the usual things can be done such as, orders attached to your earnings, orders attached to your UK property even bankruptcy etc....

What I would like to know is whether this has actually happened to anyone on this forum or whether anyone here knows of it happening to someone else.

The legal issues being thrown around (breach of EU legislation etc) are all well and good but to my knowledge this has never been challenged in court and I would like to know why. It appears to me that it is a 'no brainer'. Surely, in its most basic sense, if a purchaser was not told about the developer mortgage already on the property and EU law states they should have then I fail to see what the legal issue is. Maybe I do not appreciate the complexities of it all. But if there is an outstanding mortgage on the property, then the agents, developers, lawyers and banks can blame each other all day long but surely the person they cannot blame is the purchaser (who had the wool pulled over their eyes).

When I bought my house in the UK I accepted that my lawyer had done their job. I didn't physically go and check that they had carried out the necessary checks, I didn't check that they had ensured that there was no outstanding mortgage on the property, I didn't check that no one else had been sold or bought my house as well or in the meantime nor have I checked since that my house hasn't been sold. I haven't checked whether the builder has gone into liquidation and I haven't checked to see if the bank is taking my house back because of this. You get my point. We employ lawyers to do this for us and it is no different in Cyprus (or shouldn't be). That is why we have legislation to protect us from poor/illegal practice be it from lawyers, tradesmen, doctors, dentist, mechanics etc...... You get my point, again.

I also wonder if the banks will take action because if they do, then the purchaser would simply dispute the banks version of events and the whole scam would have to come out. Which would obviously include all the information (or lack of) abut different groups involved in the chain of purchasing. I would be requesting full disclosure and if they didn't disclose then eventually the court will throw the case out. By the sounds of it, the Cypriot Government doesn't want to even acknowledge the problem let alone take action, so why would the banks.

I am of the opinon that one test case will blow this apart. You cannot have EU member states operating with such different laws.

In terms of disclosure I have asked my lawyer and my bank for full disclosure of all documents and I have not received a single reply. If they tried to sue me I would be saying to the court that I cannot present a case as they have failed to comply with the basic right of disclosure. It all seems like it is going round in circles. I am going to take my chance and not pay my mortgage for the simple reason, and this reason only, I believe that I have been defrauded by the entire chain of events and I am convinced that, if pushed to court, EU legislation would rule that this practice is certainly not in the spirit of the legislation, that purchaser's have not been treated fairly, that purchaser have not been treated lawfully and that purchasers have not been afforded the protection they are entitled to by law. BY LAW!

Excuse my rambling! Therefore, could someone please let me know if the banks have taken legal action against anyone in the UK? and what the outcome was. Also, has the EU legislation been tested or is a case winding its way through the courts?

Regards

Janner
Nigel Howarth
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Re: Cyprus Banks taking legal action in UK

Post by Nigel Howarth »

Hello Janner

I know of one case where a buyer is being taken to court in the UK, but I have no further details.

One bank has appointed a firm of Debt Collectors to pursue UK clients - but they can only threaten you with court action. They cannot enter your home or seize any of your possessions.

Also, any court action they threaten will have to be taken in Cyprus - and once the judge has ruled, the bank (not the Debt Collection Agency) will have to apply to the English court to have that judgement enforced in the UK.

I do not know whether there will be an opportunity to defend such an action in the UK, but a court judgement in any EU state can be enforced in another – and its is the law of the country in which the offence occurred that will prevail, not the country in which the enforcement order is sought.

One thing that does not help is that the laws in the UK are different to those of Cyprus. For example:

In England and Wales

The Land Registry operates an open register which means that copies of all documents referred to on the registered title can be obtained by anyone, subject to payment of the necessary fee.

In Cyprus

Information or documents in the public register of Titles connected with the ownership of immovable properties and charges or encumbrances lodged against them are treated as confidential and unavailable for public inspection.

The banks will not disclose information about a client’s mortgage because this too is confidential.

You may have seen in my magazine that Healys, the London law firm, is advising buyers who believe they have been mis-sold – see City law firm to protect Cyprus buyers rights

Regards,
Nigel Howarth
Independent information & advice for Cyprus property buyers
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Janner
Posts: 42
Joined: 07 Dec 2010 12:41

Re: Cyprus Banks taking legal action in UK

Post by Janner »

Thanks for the reply Nigel,

I suppose my main point is that if the bank gains authority in Cyprus to make an application to UK courts for action they are opening a massive can of worms. Because, it is my understanding that I could dispute this and that eventually (after many many years) it would end up being judged by EU law and all the facts would have to come out and EU standards applied. I fail to see that Cyprus would be permitted to pick and choose which bits of EU legislation they wanted to use.

As I have said to all involved in my dealings. It's not that I'm unwilling to pay. It's that I'm unwilling to pay for something that is clearly wrong under the facts as I understand them to be. I believe it to be unlawful and maybe the only way for this to ever be resolved will be a final EU ruling.

Regards

Janner
melwil
Posts: 19
Joined: 16 Nov 2010 18:49

Re: Cyprus Banks taking legal action in UK

Post by melwil »

Janner,

I have had a court action raised against me by Alpha Bank in Cyprus. I have now lodged my defences. I too was duped into buying a property with a developer mortgage, which was not disclosed to me amongst other numerous legal issues that have come to light such as fraudulent power of attorney, (mortage documents signed by my lawyer under the power of attorney, that I have still not seen four years later!) conflict of interest between the lawyer and developer. The list of issues is long.

The eu mutual enforcement legsislation states that if a judgement is obtained in cyprus then it can be enforced in the uk automatically. ie there will be no chance to re-visist the merits of the case in the uk court. It is simply enforcement of the action in the uk. I understand from the enforcement legislation that bankrupcty is expressly ruled out as an enforcement action in another country, but apart from that the judgement can be enforced.

The problem is that cyprus is corrupt including the judicial system. The recent Conor O'Dwyer case proves that, where the judge chose not to follow the legislation which clearly states that the contract of purchase cannot be withdraw with the consent of the purchaser. Where does that leave at risk purchasers, when even the judges will not enforce their own out of date laws in protection of purchasers.
Janner
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Joined: 07 Dec 2010 12:41

Re: Cyprus Banks taking legal action in UK

Post by Janner »

Hello Melwil,

Nigel's reply states;

'One bank has appointed a firm of Debt Collectors to pursue UK clients - but they can only threaten you with court action. They cannot enter your home or seize any of your possessions.

Also, any court action they threaten will have to be taken in Cyprus - and once the judge has ruled, the bank (not the Debt Collection Agency) will have to apply to the English court to have that judgement enforced in the UK.

I do not know whether there will be an opportunity to defend such an action in the UK, but a court judgement in any EU state can be enforced in another – and its is the law of the country in which the offence occurred that will prevail, not the country in which the enforcement order is sought.


So, are you saying that once the bank get permission from a Cyprus court to apply to the UK then that is directly enforceable without any contest being possible in the UK. I could therefore, only contest it in Cyprus. If this is the case then at that point it can be contested all the way through the Cypriot legal system (many years) for it eventually to go the EU court where EU law must be applied.

If these sorts of cases can only ever be judged by Cypriot standards then we are all wasting our time because we know what the outcome will be. My understanding is that this sort of practice is contrary to EU law and Cyprus, as a member state, must abide by EU law.

Excuse my ignorance but some clarification would be appreciated.

I am about to stop paying my mortgage with Alpha Bank for the same reason so I can expect them to take legal action against me. When you say you have lodged your defences. Where and what were they? Do you expect legal action to be taken against you in the UK, attachment to earnings, block bank accounts etc or do you expect to be issued with a summons to attend court in Cyprus?

It all seems odd to me because it can only go one of two ways in my simple mind;

1. The cases can only ever be judged by Cypriot law and what would be the point in challenging it as we already know the outcome.

2. It will be judged by EU law and if that is the case then the entire system would come crashing down and Cyprus would be well and truly stuffed. I still fail to see how the sort of cases mentioned on this forum, if tested by EU law, would fail.

It appears to me that Cyprus can huff and puff as much as it likes. As long as we keep appealing then eventually a test case will come before the EU and that law should prevail. After that, Cyprus would have to conceed defeat otherwise every single case (hundreds of thousands maybe) would wind their way through the system and the bank/lawyer/developer (whoever was being challenged) would lose and have to pay costs.

This problem is massive and we need to have a co-ordinated approach. What do you think about Healey's taking on the problem. I have read that it will cost 3k + VAT just to look at documents. This seems very steep!

Let me know what you think.
melwil
Posts: 19
Joined: 16 Nov 2010 18:49

Re: Cyprus Banks taking legal action in UK

Post by melwil »

Janer,

You can read the regulations on jurisdiction and enforcement. Just type it into google.

Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

The regulations are clear, the case must be raised where the property is situated ie Cyprus, there will be no re-visit on the merits of the action in the uk once a judgement is obtained against someone in Cyprus. Therefore, an action is cyprus should be defended as hard as possible. After a judgement is obtained in cyprus there is nothing you can do in the uk and it is a simple matter of enforcement in the uk, apart from bankruptcy.

The bank are up to serious dirty tricks to dupe people into letting them obtain a judgement without defending. The bank told me not to defend the action and to simply allow them to obtain judgement against me in cyprus and that we could come to an arrangement with them afterwards. I was told by my lawyer to re-sist that at all costs, that this is simply a con.

With regard to the eu court of justice, it could be very very expensive to take a case through the eu courts and therefore it is very un-likely apart from a class action to proceed.

If you are in a position to pay your loan I would keep paying. I had no choice but to stop paying when I was made redundant from my job.
Janner
Posts: 42
Joined: 07 Dec 2010 12:41

Re: Cyprus Banks taking legal action in UK

Post by Janner »

Melwil,

I hear what you are saying. I'm confused by your comment on continuing to pay the loan. My dispute is the fact that I am paying for something that could be taken away from me by that very bank due to developer mortgage. The bank will not provide any assurances that they will not do this.

EU law apparently states that I should have been made aware of this debt beforehand. That is my big worry.

If the bank give me a guarantee and my independent (yes, independent) lawyer approves this then I would continue to pay. I will therefore, contest this as strongly as possible. I feel that the banks are going to have to make some compromise because if too many people simply stop paying it will put them in a very difficult position.

It is also an opportunity for the banks to distance themselves from the developers and the agents but I hear that Cyprus is to closely knit that this may be impossible.

If there is no legal redress then why are people so keen to have a legal battle about the possible EU breaches?

Regards

Janner
Nigel Howarth
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Re: Cyprus Banks taking legal action in UK

Post by Nigel Howarth »

Janner

Your lawyer should have advised you that the property was mortgaged before you bought and failed in their duty of care if she/he failed to do so. There was a similar case involving a Paphos lawyer by the name of Nicos Papacleovoulou decided by the Supreme Court. You can read more about the case at http://www.news.cyprus-property-buyers. ... /id=004686 and http://www.news.cyprus-property-buyers. ... /id=004776.

I understand that before you can go to the EU, you need to exhaust local remedies, which regrettably can take many years in Cyprus.

There are some 'interesting' notices in today's paper. The Alpha Bank is taking action against Alpha Panareti, G&V Hadjidemosthenous and J Aristodemou Ideal Homes plus a number of those who have bought property from those companies for non-payment of CHF mortgages.

I'll write an article later today in the magazine.

Regards,
Nigel Howarth
Independent information & advice for Cyprus property buyers
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melwil
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Re: Cyprus Banks taking legal action in UK

Post by melwil »

Janner,

The point I am making when I say continue to pay if you can is because although you can strenuously defend any action in Cyprus and appeal a judgement, the reality is that the cyprus judges from recent cases (including Conor O'Dwyer case) do not appear to follow their own laws nor the eu laws and seem to lean in favour of banks and developers, and you may find yourself with a judgement against you which as discussed earlier can easily be enforced against you in the uk. The ability to fight a court case in Cyprus and appeal etc will of course cost a large amount of money in legal fees which a lot of people may not be able to afford. When someone runs out of money to pay for legal fees in Cyprus their lawyer will desert them as in any other country.

If your lawyer did not disclose the developer loan it may not be that this will absolve you from paying your loan to the bank but simply that you will have the right to raise an action against your lawyer for damages and for negligence. Again, the cyprus bar association in cyprus protect their lawyers. I have made complaints about my previous non-independent lawyer (who in my view displayed gross negligence, the details of which are earlier in this thread) to the cyprus bar association, and they have not even bothered to respond to my complaints. What message does that send out?

When will the powers in cyprus realise that they are protecting the wrong parties in the developers and bank at the expense of individual purchasers. The cyprus property market will never recover until the government properly protect purchasers and bring equality and fairness into the relationship between purchasers, banks and developers.

I was sold on the idea in all the property magazines and property news that the cyprus legal system was similar to england and modern and dependable. This was a myth pedalled by the property industry to fuel the profits. The reality is that the cyprus property laws, as they have now been exposed, are antiquated and in no way shape or form are similar to england.
thedesignboy
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Re: Cyprus Banks taking legal action in UK

Post by thedesignboy »

Oh this will not ever go away, no matter how much I've dug my head in the sand, I purchased with 4 friends in Pathos, we all used the same lawyer (she is well known - for the wrong reasons on these forums). I have ceased paying the loan for a year now and get the odd call asking to let them know what I plan to do.

I have ignored them all - but deep down know its just daft to do so. I read so much on these forums and there is so much of you living in hope that this will all work out. In our situation one friend went bust, he told the Alfa Bank that he did, they since added a UK debt collection company after him. He ignores them too. Now my other friend has had the same company calling for him, 3 off us have ceased payments. But one of my friends went ahead with it and currently renegotiated a monthly £99 payment, its working ok but he says he wants to stop as the whole thing is just a drain of his cash as ultimately it will increase and add to the term.

I have read only recently that if you agreed the loan, the developer is your guarantor, I had asked this many times before to the bank and they said there was only me. But it now seems that if I fail with the payments they come for him first. Then he must try to recoup costs from me.

My situation is slightly different as I have not signed for the property or paid that last installment, the developer said that he would scrap the last fees if I sign over. But that made me worry more that it was the wrong thing to do, so I've strung it out to this point and now am about to let the bank know that I will never pay. That the property loan was set up by my lawyer who has a massive conflict of interest by way of the developer. That there are forged documents of power of attorney and that under my contract that everyone ignores states that if I fail to repay the bank seek damages against the developer.

Its got me scared, even to the point I'm thinking, who cares if I lose everything, I've my health, my family and I can start again. But I actually believe that they will never take my home - no UK court would allow a corrupted system ruin a family over this.

I'd welcome any advice, I've tried a long time to do the right thing, now I just want it over.
Nigel Howarth
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Re: Cyprus Banks taking legal action in UK

Post by Nigel Howarth »

Hi thedesignboy

You need to take sound legal advice on how to deal with this matter. You talk of forged documents - this is a matter for the Police to deal with.

Whereabouts is the property? I'll give you the names of lawyers in the area from the British High Commissions list who may be able to help.

Regards,
Nigel Howarth
Independent information & advice for Cyprus property buyers
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Nigel Howarth
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Re: Cyprus Banks taking legal action in UK

Post by Nigel Howarth »

thedesignboy wrote:I have read only recently that if you agreed the loan, the developer is your guarantor, I had asked this many times before to the bank and they said there was only me. But it now seems that if I fail with the payments they come for him first. Then he must try to recoup costs from me.
If you fail to maintain your mortgage repayments, the bank will come after you (regardless of whether the developer acted as your guarantor). There's an article in my magazine with some advice at http://www.news.cyprus-property-buyers. ... /id=001361

You also need to bear in mind that the contract you have with the developer is a separate issue and needs to be dealt with separately.

Regards,
Nigel Howarth
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andyp
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Re: Cyprus Banks taking legal action in UK

Post by andyp »

Designboy. Sounds a bit like The Stigette of Paphos. Best of luck but I think you might need an AG ruling before you can go anywhere although your circumstances might be different to mine. I just had a forged property contract. Feel free to pm if you need some info.

P.S. The letters page of CM under who is The culprit has interesting posts.
thedesignboy
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Re: Cyprus Banks taking legal action in UK

Post by thedesignboy »

It's so frustrating, I spend so much time reading and reading forums on line and then find out that all my hope from one days reading is dashed the next. I am totally freaked out that the bank will come to the UK and make me lose my family home. I don't care about the rest of it, but my home has taken me my life to build and restore. I am prepared to lose everything and I know that I am capable to build from scratch, but I'd try anything to get out of this.

I Think these are my options:

1. Put in writing to the bank that we have never signed over the building or made the final payment, that we were mis-sold a property that was not delivered on time, we have proof that our power of attorney was forged and we will not pay for something we don't own. Then insist that the bank chase the developer for the funds as they are guarantor (as in our agreement).

2. Try the legal route from the legal company who offered us for £1500 to draw up a case against the developer and sue for damages in an out of court settlement. (we know that it sounds a bit of a scam - but willing to try anything).

3. Ignore every call, email and request from the bank, developer and debt collection company in the UK (http://www.ccilegal.co.uk/Default.aspx) then if they ever do make it to the UK and enforce the things I've read online I then arrange to make a minimum payment to them in hope that something is better than nothing for them.

4. Proceed with the final payment and take the property. Then arrange some sort of minimal payment to the bank and have them offset the loan to the end of the term - which we will surely suffer to pay.


My wife has lost her job and my own job is uncertain as we are looking to close down, I am feeling very vulnerable to the whole situation and from reading others posts here it just makes me more upset.

If you were in my shoes, what action would you take? My property is in Pathos, its loan with the alfa bank and the lawyer is the girl that dodged the driving offence charges. I am happy to pay for advice to an independent lawyer if you can forward me a name?
Nigel Howarth
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Re: Cyprus Banks taking legal action in UK

Post by Nigel Howarth »

Hi thedesignboy

The legal route of £1,500 to draw up a case against the developer and sue for damages is ludicrous, you will not even get a legal opinion for that! What is the name of the Law Firm claiming to offer this service?

As far as I am aware, there are two firms that may be able to assist:

The city law firm of Healys LLP who has teamed up with L.G Zambartas LLP here is Cyprus. The Healys Partner dealing with these cases is Chris Christofi at chris.christofi@healys.com

There is also the Judicare Group which has teamed with TCA Law Firm of Nicosia.

I suggest you contact both of those to see if & how they can help.

And I advise Janner to do the same.

Regards,
Nigel Howarth
Independent information & advice for Cyprus property buyers
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