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Warrant of prohibitory injunction approved irrespective of special hypothec

A Magistrate’s Court upheld an application for a warrant of prohibitory injunction, even though the applicant had a special hypothec in his favour

malcolm_mifsud
Malcolm Mifsud
1 September 2017, 7:30am
A Magistrate’s Court upheld an application for a warrant of prohibitory injunction, even though the applicant had a special hypothec in his favour.  This was decided by Magistrate Charmaine Galea on 21 August, 2017 in San Lawrenz Leisure Resort Limited and San Lawrenz Operators Limited -v- Waldemar Woyseth von Turow and his wife Halina Dunin-Woyseth von Turow.

The applicant companies asked the Court to inhibit the defendants from transferring in any manner a residential suite forming part of a residential block adjacent to the Kempinski San Lawrenz hotel.

Woyseth von Turow filed a reply objecting to the warrant being issued, since the application did not satisfy the elements of the warrant in terms of Article 873(2) of the Code of Organisation and Civil Procedure. It seems that the applicant companies, prima facie did not have any rights to protect by means of the warrant. Furthermore, according to the public deed of 26 June, 2006, there was registered a special hypothec of €11,646.87 in order to guarantee the fulfilment of the association rules and “in warranty of the proper observance of the restrictions regarding the use and occupation of the Residence and Block Common Parts”. Consequently, the defendants cannot transfer the property without the consent of the applicants. Furthermore, according to the contract, the companies have a right of first refusal in case the defendants choose to sell the property.

Magistrate Galea analysed the evidence brought before her and saw that San Lawrenz Leisure Resort Limited had entered into a temporary emphyteusis contract on 26 June, 2008 for 250 years. The defendants had bound themselves to contribute to the expenses incurred in the maintenance of common area. The applicant companies filed a warrant of prohibitory injunction in order for the defendants to stop any dealings with the property, since there is a claim against them.

The Court then dealt with the plea that San Lawrenz Operators Limited  have no judicial interest in this case and one of the directors testified, where she explained that San Lawrenz Leisure Resort Limited entered into the contract with the defendants, but San Lawrenz Operators Limited have a management agreement with the sole purpose of administrating the complex.

The electricity and water bills are to be paid to San Lawrenz Operators Limited, and this company issues the invoices. In case of defaults San Lawrenz Leisure Resort Limited has to pay the other company. The Court pointed out that the contract caters for a special hypothec in favour of the administrators, which are the San Lawrenz Operators Limited and therefore, this company does have a judicial interest in the proceedings.

The defendants held that the claim was adequately protected with the special hypothec registered, together with a right of first refusal, in the companies’ favour. They described this warrant as arm twisting, in order to put undue pressure to accept the companies’ claims.

Article 874 of the Code of Organisation and Civil Procedure reads:

“874.* (1) A warrant of prohibitory injunction may also be demanded by a creditor to secure a debt or any other claim amounting to not less than eleven thousand six hundred and forty seven euro (11,647). The object of such a warrant is to restrain the debtor from selling, alienating, transferring or disposing inter vivos such property as may be indicated in the application by onerous or gratuitous title or in any manner creating a burthen or real and, or personal rights; provided that such a warrant shall not apply to the constitution of any right on, or alienation or transfer of any property made pursuant to a court order, or over bank guarantees and letters of credit.”

The Court at this stage is allowed to examine whether the applicants have a prima facie claim or otherwise. In Sonia Grech pro et noe -v- Stephanie Manfre decided by the Court of Appeal on 14 July, 1988, held that a prima facie right is objective and not subjective.

The Court pointed out that these proceedings are summary proceedings and are intended to be swift. Furthermore, if the warrant is refused it has no bearing on whether the claim exists or otherwise, since the court at this stage has no competence to delve into the merits of the case.

As to whether the warrant is justified if there exists special hypothecs, the applicant companies argued that the sum claimed is higher than the sum guaranteed in the special hypothecs and for it to benefit from the right of first refusal, it would have to first fork out money and pay the defendants. The Court agreed with the companies and decided that there is a prima facie claim and moved to uphold the warrant.

Dr Malcolm Mifsud is Partner, Mifsud & Mifsud Advocates

malcolm_mifsud
Malcolm Mifsud is a partner at Mifsud & Associates.
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