On 13 January 2012, the Supreme Court (Hof van Cassatie/Cour de Cassation) partially quashed a judgment of the Liège Court of Appeal (the “Court of Appeal”) of 16 November 2010 for failure to apply correctly the rule prohibiting sales at a loss (Supreme Court, case C.11.0317.F, R. Emontspool NV v. M.B.).
At the time of the facts of the case, Article 40 of the (now abolished) Law on Unfair Trade Practices (Wet van 14 juli 1991 betreffende de handelspraktijken en de voorlichting en bescherming van de consument/Loi du 14 juillet 1991 sur les pratiques du commerce et sur l’information et la protection du consommateur) was still applicable. This provision defined a sale at a loss as “any sale at a price which is not at least equal to the price at which the item was invoiced at the time of provisioning or at which it would be invoiced in case of stock replenishment”.
In its judgment of 16 November 2010, the Court of Appeal had dismissed a claim based on the existence of a sale at a loss of a car. In assessing the claim, the Court of Appeal had considered the invoiced selling price of the car, which amounted to EUR 17,578.81 (VAT excluded), but had disregarded the discount of EUR 5,600 which the seller had granted to the buyer. This discount corresponded to the repurchase price of the buyer’s old car, which the seller would take over from the buyer. In other words, the Court of Appeal had disregarded the fact that, in reality, the buyer had to pay less than the invoiced selling price of the new car.
The Supreme Court quashed the Court of Appeal’s judgment on this point and referred the case to the Mons Court of Appeal. In its ruling, the Supreme Court emphasized that it follows from the legislative preparatory works of the Law on Unfair Trade Practices that the selling price of an item is the price asked from the buyer minus any discounts and refunds, whatever form they may take, including other advantages that follow from a joint offer.
The wording of the current Law on Market Practices and Consumer Protection (Wet van 6 april 2010 betreffende marktpraktijken en consumentenbescherming/Loi du 6 avril 2010 relative aux pratiques du marché et à la protection du consommateur) is in line with the Supreme Court’s ruling. Indeed, Article 101 of the Law on Market Practices and Consumer Protection specifies that the term “sale at a loss” refers to any sale at a price which is not at least equal to the price at which the undertaking purchased the item or which the undertaking would have to pay to replenish its stock, “after any discounts granted and definitively obtained”.
The position of the Supreme Court is nonetheless surprising. The Supreme Court seems to have disregarded the fact that there were two different transactions: (i) the sale of the new car; and (ii) the purchase of the buyer’s second-hand car. We fail to see how the price paid by the seller to purchase this second-hand car can be considered as a "discount" (unless, of course, if this price was above market value).
