No revocation of garnishee order if filed correctly

The First Hall of the Civil Court on 2 August, 2017 ruled that if a garnishee order is filed according to law, then it should not be revoked. This was decided by Ms Justice Anna Felice in St George Edition Limited -v- Apassionata World GmbH, represented in Malta by Dr Adrian Camilleri.

Apassionata asked the court to revoke a garnishee order filed by St George Edition Limited, in terms of Article 836(1)(b)(d)(f) of the Code of Organisation and Civil Procedure. Apassionata asked the court to impose a penalty and damages. 

The background of this case is that St George Edition filed a claim against Apassionata based on money it owed on the basis of royalties and merchandising fees.

Article 829 of the Code of Organisation and Civil Procedure reads:

“It shall be lawful for any person, without the necessity of any previous judgment, to secure his rights by one or more of the following precautionary acts, which shall be issued and carried into effect on the responsibility of the person suing out the act, provided he shall have complied with the conditions prescribed by this Code.”

Then Article 836 states:

“(a) that the precautionary act ceased to be in force;

(b) that any one of the conditions requested by law for the issue of the precautionary act does not in fact subsist;

(c) that other adequate security is available to satisfy the claim of the person at whose request a precautionary act was issued either by the issue of some other precautionary act or if such other security can to the satisfaction of the court adequately secure the claim; or

(d) if it is shown that the amount claimed is not prima facie justified or is excessive; or

(e) if the security provided is deemed by the court to be sufficient; or

(f) if it is shown that in the circumstances it would be unreasonable to maintain in force the precautionary act in whole or in part, or that the precautionary act in whole or in part is no longer necessary or justifiable.”

Ms Justice Felice quoted from a previous judgement Joseph Camilleri et -v- Anthony Gove decided on 10 May, 2001, where the court held that issues raised under Article 836 must be decided on a prima facie basis, while the merit of the case will be decided by the court in the actual court case.

In another judgment Carmela Aquilina -v- Francis X Aquilina, decided on 27 November, 1991 it was held that the right to protect a claim, is not the substantive law, but should be protected. Both the protection of the claim and the claim itself are distinct actions. The creditor has a right to ask for a precautionary warrant.

Apassionata are claiming that the warrant was safeguarding a claim that in fact did not exist. In a previous judgment Mangion Galea -v- Stewart decided on 29 July, 2005, the Court explained that for a precautionary warrant to be issued there are four requisites: There must be a claim on a right, a court case must follow, the procedure must be followed, the person requesting the warrant must be responsible for it. The same judgement held further, that there must be on the face of it, a claim, which may be liquidated. In this particular case St George Edition are stating that they do have a valid claim. Apassionata say that claim is excessive, but the German company should show that this is obvious and can be seen on the face of it.

With regard to whether the warrant should be revoked the court quoted from Spiteri -v- Darmanin, decided on 25 August, 2010, which pointed out that this should take place when the warrant is not necessary. Ms Justice Felice held that for the court to decide whether the warrant is necessary or otherwise, it must investigate the validity of an agreement dated 1 February, 2016 and would require an in depth analysis. This has to be done by the court, which would examine the merits of the case. 

Furthermore, the applicants are asking the court to impose a penalty. In Refalo -v- Calibre Consultants decided on 13 August, 2015, the court had held that the issue of imposing a penalty is one of public order, aimed at making sure warrants are issued for a serious cause and there is no abuse. But the court could not find any abuse in this case. 

With regard to Apassionata’s demand for damages, the court referred to Casino-Fo-Me Limited -v- Chartwell Games (Malta) Limited decided on 27 August, 2008 which explained that such a demand should be made in a separate action. In fact Article 836(9) mentions an application, but must be interpreted to mean a sworn application. 

The court then moved to turn down Apassionata’s application.

Dr Malcolm Mifsud, Partner, Mifsud & Mifsud Advocates