Joint and Several Liability cannot be presumed

The First Hall of the Civil Court held that joint liability of two debtors has to be proved and not presumed

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Malcolm Mifsud
7 April 2017, 7:31am
The Court concluded that the evidence showed that there existed no other agreement than that established in the lease agreement
The Court concluded that the evidence showed that there existed no other agreement than that established in the lease agreement
The First Hall of the Civil Court held that joint liability of two debtors has to be proved and not presumed. This was one of the points of law which was decided upon in a judgement delivered by Mr Justice Lawrence Mintoff, in Bonavia Properties Limited -v- Maria Helga Muscat Groelz and Raymond Abela.

Bonavia Properties Limited explained in the sworn application that it had rented a restaurant and guesthouse in Bugibba to the two defendants, and the lease was terminated after the was a breach of contract by the defendants. The company claimed that it was owed €16,537, which represent unpaid rent and licence fees. 

Ms Muscat Groelz was the only defendant who filed a statement of defence and held that the breach of contract was done by the co-defendant and not her and that he was not jointly responsible. In fact, she claimed that Mr Abela was the one who had to pay the claim and not her. 

Mr Justice Mintoff analysed the evidence which was brought before it. The restaurant was on the ground floor level, while the guesthouse was on top of it and had a separate entrance. The two defendants lived together and signed the lease agreement. The Malta Tourism Authority representative explained that the two activities that of a restaurant and that of a guesthouse, have separate licences, since they had two separate entrances. 

The plaintiff company had made the claim since 0ctober 2014, since the lease agreement stipulated that the licences had to be paid by the tenants. 

The Court dealt with Raymond Abela’s legal position after he failed to present a statement of defence. The fact that a defendant is in default, does not mean that he is admitting to the claims and the Court also search for the truth to decide whether the default defendant was responsible to pay the claim.

The plaintiff company held that contrary to what Muscat Groelz held, she is still jointly responsible for payment together with Abela. Muscat Groelz held that she paid her share of the rent and the licences, but Abela failed to pay his part. However, the company held that the rent was one and not split into two.

The Court pointed out that according to Article 1002 of the Civil Code if the wording of an agreement is clear, there is no need of interpretation. Article 1003 states:

“Where the literal meaning differs from the common intention of the parties as clearly evidenced by the whole of the agreement, preference shall be given to the intention of the parties”

Therefore, the Court had to examine whether there was another meaning to the lease agreement. However, the Court concluded that Muscat Groelz failed to produce satisfactory evidence to show that the intention was otherwise. She knew that the lease agreement was signed by herself and Abela, which stipulated one rent for both activities. At the time both defendant lived together but later on went their own separate ways. The Court pointed to a letter sent by plaintiff company to MTA indicated both as the new licencees. The Court also quoted parts of Muscat Groelz’s testimony which indicated that she was still bound by the lease agreement, notwithstanding the fact that she felt that Abela was responsible for the breach of contract. Furthermore, both had signed a termination agreement, since they had both rented the properties. More evidence showed that the property had one utilities meter, although there existed a sub-meter. 

The Court concluded that the evidence showed that there existed no other agreement than that established in the lease agreement.

The Civil Law doctrine showed that joint and several liability cannot be presumed, but proved. This is also established in Article 1089 of the Civil Code. In this case this was established in the lease agreement. 

The Court turned down the pleas and order the two defendant to pay the company €16,537.

Dr Malcolm Mifsud is partner Mifsud & Mifsud Advocates

malcolm_mifsud
Malcolm Mifsud is a partner at Mifsud & Associates.