Property repossession – Apollonia case: confirmation of the validity of the enforcement order and exclusion of the Consumer Code

Chambéry Court of Appeal, 2nd Chamber, 25 June 2026, No. 26/00253

The facts: Appollonia Nightmare continues for owners

By a notarised deed dated 18 December 2007, Banque Patrimoine et Immobilier, whose rights are now held by Crédit Immobilier de France Développement (CIFD), had granted a couple of borrowers a loan of €305,628 to finance the off-plan purchase of a flat situated in a holiday residence in Haute-Savoie. The loan was secured by a conventional mortgage and a lender’s lien.

Following significant arrears, CIFD initiated property repossession proceedings in April 2024 for an amount exceeding €440,000. The enforcement judge at the Bonneville Judicial Court upheld the proceedings by a judgment of 5 February 2026, set the debt at over €438,000, ordered the compulsory sale of the property and dismissed all the borrowers’ objections. The borrowers lodged an appeal.

The borrowers’ arguments

The appellants put forward several defences directly inspired by the Apollonia case.

Firstly, they argued that the notarised loan deed could no longer constitute an enforceable instrument. In their view, the notary had participated in the fraudulent scheme set up by Apollonia, by organising the systematic use of powers of attorney and pursuing a prohibited personal interest. In particular, they cited the criminal conviction handed down in Marseille on 15 January 2026 against this notary.

They then argued that the loan should be subject to the protective provisions of the Consumer Code. Although they had invested in a holiday residence, they maintained that they had entered into the contract as consumers, being a doctor and a psychologist respectively. They also invoked the bank’s alleged voluntary submission to the Scrivener Act and sought the forfeiture of the right to contractual interest on the grounds of various irregularities, in particular concerning the cooling-off period and the calculation of the annual percentage rate (APR).

Res judicata regarding the challenge to the enforceability of the instrument

The Court of Appeal first dismissed the challenge concerning the enforceability of the notarial deed.

It noted that this same application to have the authentic instrument declared invalid had already been dismissed by the enforcement judge in Perpignan in previous proceedings between the same parties. As the conditions for res judicata are met (same parties, same subject-matter and same cause of action), this challenge is now inadmissible. The Court reiterates that res judicata applies to the operative part of the previous judgment.

The defence based on the Consumer Code remains admissible

However, the Court carefully distinguishes the challenge relating to the Consumer Code.

It rules that a claim seeking the forfeiture of the right to contractual interest, when raised solely as a defence to contest the debt, constitutes a defence on the merits that is not subject to limitation. Furthermore, the previous Perpignan judgment had not ruled on this specific issue in its operative part; it merely addressed it in its grounds. Res judicata could not therefore be invoked on this point.

The borrowers were traders

Having declared these grounds admissible, the court dismissed them on the merits.

It noted that consumer status is assessed in light of the economic purpose of the transaction being financed.

In this case, the loan was used to purchase a flat intended for use in a holiday residence. The borrowers had, in the same year, made seven other property purchases representing investments of over 2.5 million euros, and one of them had already registered with the commercial register even before the loan offer was issued. These facts demonstrate that the transaction was carried out for business purposes.

The court also considers that a mere reference, in the loan offer, to the Scrivener Act or the Consumer Code is not sufficient to establish an unequivocal intention on the part of the parties to voluntarily subject the contract to this protective legislation.

The bank’s lack of fault

The judges emphasised that the documents submitted to the bank presented the investment as falling under the status of a non-professional furnished letting (LMNP) and did not reveal either the numerous other acquisitions or the genuinely commercial nature of the transaction.

They further note that the Apollonia system was based precisely on a compartmentalisation of information between the various lending institutions, which were unaware of the parallel financing obtained by the investors. The bank therefore had no information enabling it to ascertain the true nature of the borrowers’ situation.

Confirmation of the property repossession

Since the Consumer Code is deemed inapplicable, the grounds for appeal relating to non-compliance with the cooling-off period and the annual percentage rate (TEG) become inoperative. The court also points out that powers of attorney do not need to be attached to the enforceable copy of the notarial deed and that the borrowers do not dispute having duly authorised the notary.

The Court of Appeal thus fully upheld the judgment of the enforcement judge, validated the property repossession procedure, upheld the claim of Crédit Immobilier de France Développement and allowed the forced sale of the property to proceed. This decision illustrates the difficulty, in the Apollonia litigation, of securing the annulment of enforcement proceedings where the investments are of a commercial nature and where challenges to the enforceable title have already been definitively resolved.

Rennes Court of Appeal, 2nd Chamber, 16 June 2026, No. 24/02029

Financial investment advice and investments in the tourist hotel sector: adviser held liable for a high-risk bond issue

The facts

In September 2013, Mr N. commissioned TCP Patrimoine, a financial investment adviser (CIF) and insurance broker, to carry out a wealth review and identify investment opportunities. His aim was to invest €250,000 in investments offering a high return over a period of five to eight years.

Through this adviser, he ultimately made eight successive investments between 2013 and 2016 in various companies within the [E] group, which specialises in tourism property and the hotel sector, totalling €595,000. A few years later, the group was placed in administration and subsequently in compulsory liquidation, resulting in significant losses for investors. Mr N. filed claims totalling more than €318,000 in the insolvency proceedings before taking legal action against his financial investment adviser for breach of his duties to provide information and advice.

The court’s decision

In a judgment dated 8 January 2024, the Rennes District Court found the adviser liable only in part.

It ordered TCP Patrimoine and its insurer, MMA, jointly and severally to pay €28,000 in damages for financial loss, whilst dismissing the remainder of the investor’s claims. Both parties lodged an appeal: Mr N. sought more than €531,000 in compensation, whilst the respondent companies sought the annulment of any order for damages.

The obligations incumbent upon a financial investment adviser

The court sets out at length the legal framework applicable to financial investment advisers.

Pursuant to the Monetary and Financial Code and the General Regulations of the French Financial Markets Authority (AMF), the adviser must act with loyalty, competence, diligence and in the best interests of their client. They must gather precise information on the investor’s financial circumstances, experience and objectives, and then make appropriate recommendations. All information, including promotional material, must be accurate, clear and not misleading. Finally, the advice must be set out in a written report setting out both the benefits and the risks of the proposed investments.

Investments made between 2013 and 2015

The court then examined each of the investments made.

The documents produced show that Mr N. had signed a letter of engagement, completed a detailed financial questionnaire and acknowledged receipt of the information memoranda and prospectuses, which expressly mentioned the absence of a capital guarantee, the financial risks and the characteristics of the products offered. The subscription forms also highlighted the risks associated with investments in companies within the [E] group.

With regard to several investments made between 2013 and 2015, the court also notes that some of the companies concerned are still subject to a continuation plan or that investors still have buy-back commitments or redemption mechanisms available to them. Mr N. does not provide a precise account of the sums already received or of the actual status of his claims. His loss in relation to these transactions therefore remains uncertain or insufficiently established. The corresponding claims for compensation are dismissed.

The June 2016 bond issue: gross negligence

The outcome is different for the final transaction carried out on 10 June 2016.

This involved the subscription of €100,000 worth of bonds issued by company [E]. In the court’s view, a professional financial investment adviser could not have been unaware that the use of a private, off-market bond issue indicated the issuer’s financing difficulties. This transaction constituted a warning sign that required the adviser to carry out a critical analysis of the company’s financial situation before recommending the investment.

However, TCP Patrimoine merely reproduced the group’s promotional documents without carrying out its own checks. It did not investigate the issuer’s actual financial position, did not present its critical analysis to the client, and never advised him to abandon this particularly risky transaction. The mere fact of having the client sign declarations acknowledging the risks was not sufficient to fulfil its duty of care.

Limited loss of opportunity

The court did not, however, award full compensation for the losses.

It noted that Mr N. was himself aware of the risky nature of the investments and that he had deliberately concentrated a significant portion of his assets in products from the [E] group, despite the warnings he had received. The loss is therefore analysed as a loss of opportunity arising from not having made this investment, rather than as the total loss of capital.

Having assessed this loss of opportunity at 70 per cent of the sums invested in the bond issue, the court set the compensation at 50,000 €, plus interest at the statutory rate from the date of the judgment. It rejected, however, the claim for compensation for non-pecuniary damage, on the grounds that it was not substantiated.

The scope of the judgment

The Court of Appeal partially set aside the judgment at first instance.

TCP Patrimoine and its insurer, MMA, were ordered jointly and severally to pay €50,000 in damages, as well as €6,000 pursuant to Article 700 of the Code of Civil Procedure, in addition to the costs of the proceedings at first instance and on appeal.

This judgment is of significant importance for the liability of financial investment advisers in the holiday property sector. It serves as a reminder that a financial investment adviser cannot simply pass on promotional documents drawn up by the product’s developer. Their duty of care requires a genuine critical analysis of the issuer’s situation and the product being offered. Conversely, where the risks have been clearly brought to the client’s attention and the loss remains uncertain or is still dependent on ongoing collective proceedings, the adviser’s liability is not automatically engaged. Only a transaction for which signs of vulnerability were objectively apparent at the time of subscription justifies compensation in this context.

Amiens Regional Court, 1st Chamber, Litigation Division 4, 25 June 2026, No. 24/02360

Holiday residence – Estoppel – The landlord may rely on alternative legal grounds without contradicting himself

The dispute vs PV Exploitation France

By writs of the judicial officer dated 30 July 2025, the owner of a unit situated in a tourist residence brought proceedings against the companies CP Holding and PV Exploitation France before the Amiens Judicial Court. He sought, primarily, the annulment of the commercial lease, the return of the property, the eviction of the operator and the payment of compensation for occupation. In the alternative, he sought the judicial termination of the lease and, failing that, an order requiring the operator to pay compensation for occupation.

Following an initial conclusion of the preliminary proceedings, the court set aside that order so that a plea of inadmissibility raised by the defendants before the pre-trial judge could be examined. The order of 25 June 2026 therefore does not rule on the merits of the case, but solely on this procedural issue.

The argument put forward by PV Exploitation France and CP Holding

The operating companies invoked the principle of estoppel, that is to say, the prohibition on a party contradicting itself to the detriment of its opponent.

In their view, the landlord had adopted two incompatible positions during the proceedings. Initially, he claimed to have been the victim of fraud at the time the commercial lease was concluded, criticising the tenant for failing to inform him of the consequences attached to the status of commercial leases, in particular the obligation to pay eviction compensation.

Subsequently, however, he argued to the contrary that the disputed contract did not fall under the regime governing commercial leases and should be reclassified as a lease under ordinary law, meaning that no eviction compensation was due to the tenant.

In the defendants’ view, these two lines of argument were irreconcilable and rendered the landlord’s new claims inadmissible.

The landlord’s response

The landlord contested this analysis.

He argued that his new line of argument constituted merely a subsidiary claim supplementing his main claim. In his view, a litigant is perfectly entitled to put forward several hierarchical legal grounds in order to preserve all his defences.

He maintained that accepting the opposing argument would amount to infringing his right to bring proceedings and the principle of concentration of pleas, which specifically requires that all arguments capable of forming the basis of a claim be put forward from the outset.

A reminder of the conditions for the application of estoppel

The pre-trial judge reiterated the principles governing a plea of inadmissibility based on estoppel.

Drawing on the case-law of the Court of Cassation, he emphasised that this mechanism, linked to the general principle of procedural fairness, sanctions only conduct consisting, in the course of the same proceedings, of adopting genuinely incompatible positions which have misled the opposing party as to the intentions of the party adopting them.

However, it must still be demonstrated that there has been a change of position constituting a breach of good faith, conferring a procedural advantage on the party adopting it and causing prejudice to the opposing party, who would have organised their defence on the basis of the position initially expressed.

The judge also points out that estoppel applies only to procedural contradictions arising during the proceedings and not to mere inconsistencies between prior conduct and a claim made before the court.

The lessor’s change in arguments is accepted

Applying these principles, the judge rejects the operating companies’ arguments.

He notes that, whilst the lessor had initially sought the annulment of the commercial lease on the grounds of fraud, in its subsequent submissions it subsequently argued primarily that the contract should be reclassified as a common-law lease, with the claim for nullity on the grounds of fraud then becoming a subsidiary claim.

However, this procedural shift does not constitute a prohibited contradiction. The claimant is still pursuing the same objective: to obtain the return of the property and compensation for occupation. He has simply developed a new legal basis and organised his claims according to a standard hierarchy between principal and subsidiary claims. Such a procedural technique is common practice and even meets the requirements for the concentration of arguments.

Above all, the defendant companies have demonstrated neither the existence of unfair conduct nor any prejudice resulting from this change in argumentation. The conditions for the application of estoppel are therefore not met.

Claims seeking a ‘declaration’ do not constitute claims

The judge adds a particularly interesting ground.

The defendants sought to have certain claims seeking a ‘declaration’ that the lease was a civil lease or that it had come to an end declared inadmissible.

However, the judge points out that requests to ‘declare and rule’, ‘take note of’ or ‘declare’ do not, in themselves, constitute genuine claims within the meaning of Article 4 of the Code of Civil Procedure. They cannot therefore be the subject of a plea of inadmissibility based on Article 122 of the same Code.

The decision

Consequently, the pre-trial judge dismissed in their entirety the pleas of inadmissibility raised by CP Holding and PV Exploitation France on the grounds of estoppel.

The two companies are ordered jointly and severally to pay the costs of the interlocutory proceedings and to pay €3,000 pursuant to Article 700 of the Code of Civil Procedure. The case is then referred to a further pre-trial hearing scheduled for 24 September 2026 so that the proceedings may continue on the merits.

Scope of the decision

This order is of significant practical importance in disputes concerning holiday residences. It confirms that a landlord may adapt their legal arguments during the proceedings, in particular by setting out primary and alternative claims, without automatically incurring a dismissal on the grounds of estoppel. Merely altering the legal grounds is not sufficient: it must also be demonstrated that there is a genuine procedural contradiction, conduct contrary to good faith, and harm suffered by the opposing party. This decision thus serves as a reminder that the principle of procedural fairness must not stand in the way of the parties’ right to present all relevant arguments in defence of their interests.