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Debtor will have to pay interest and judicial costs

If a debtor does not show that there was a valid reason not to pay a debt, then the debtor should pay interest and judicial costs, according to a ruling by a magistrate’s court handed down last Monday in Miksons Transport Co Ltd -v- Customs and Freight Agency Limited.

malcolm_mifsud
Malcolm Mifsud
12 September 2014, 8:00am
Miksons instituted an action against Customs and Freight Agency on 5 October, 2009 where they claimed a payment of €9,637.94 after they carried merchandise. Prior to filing the suit, the plaintiff company had filed a judicial letter and a garnishee order. The defendant company defended the action by filing a counterclaim for €26,868.56, which was the difference for damage the plaintiff company had caused to a fork lifter, which owners BAS Limited are expecting from the defendant company.  

Magistrate Gabriella Vella analysed the evidence brought before the court. The plaintiff company was engaged to transport merchandise for the defendant company, which failed to pay for the service rendered. The defendant company held that this amount should be set off against a claim they had against the plaintiff for damage it had caused to a fork lifter belonging to BAS Limited, and which the defendant company was responsible for. The claim for €9,637.94 was deposited in court.

"Magistrate Vella held that our legal system dictates that if a person owes money but fails to effect payment or does not have a valid reason to pay, then the only damages that may be sought for the delay is 8% interest"
The court then referred to a court sitting held on 8 October, 2012 where the defendant company admitted it owed the sum mentioned to the plaintiff company. There was also an agreement that the plaintiff company had withdrawn the sum deposited in court and also that the counter claim was no longer valid since BAS failed to institute legal action against the defendant company. The parties further agreed that the only pending issue is whether interest was still due and whether the defendant company should pay judicial costs. 

Magistrate Vella held that our legal system dictates that if a person owes money but fails to effect payment or does not have a valid reason not to pay, then the only damages that may be sought for the delay is 8% interest. Furthermore, if the debtor fails to pay his/her debts then he/she should pay for the judicial debts.

Then the court had to analyse whether the defendant company was correct not to effect payment when it was originally called upon to pay. From the records of the case it is evident that the defendant company was holding the plaintiff company responsible for the damage caused to a fork lifter which was being transported from Malta to Gozo.

Kevin Attard, director of Customs and Freight Agency Limited explained to the court that the company is an agent of BAS Limited. He attributed the accident to the fact that the driver of Miksons was driving at an excessive speed.

This was confirmed by a surveyor’s report which, although it was referred to, was never presented in court. However, the plaintiff company presented its own surveyor’s report, which exonerated the driver, but blamed the damage to how the fork lifter was strapped during its transport, which would have allowed movement on the trailer carrying it. A second report which was also presented confirmed this and that BAS were responsible for securing the fork lifter.

The court held that the evidence pointed to the fact that the plaintiff company was not responsible for the damage. Therefore, it followed that the defendant company should have paid for the transport services it received when it was called upon to do so. 

Magistrate Vella then ordered the defendant company to pay interest of €9,637.94 from when the invoices were issued and also that it should pay the judicial costs of the action.

Malcolm Mifsud, Partner, Mifsud & Mifsud Advocates

malcolm_mifsud
Malcolm Mifsud is a partner at Mifsud & Associates.
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