Usury may occur upon the promise of higher interest rates

The crime of usury take place even before the transaction, but upon the agreement that the repayment or reward would be higher than 8%

The crime of usury take place even before the transaction, but upon the agreement that the repayment or reward would be higher than 8%. This was held in Il-Pulizija v Rosario Brincat, a judgement delivered by Madame Justice Edwina Grima on 6 January 2021.

Brincat was accused of usury, causing fear of violence and being a recidivist. The Magistrates Court found him guilty of these charges and condemned him to 18 months’ imprisonment and €15,000 fine. Brincat appealed.

The Court of Appeal pointed out that the crime of usury was introduced in the Criminal Code by means of Act III of 2002. The Magistrates Court had believed the victim of this case, although he could not be precise of the amounts he borrowed from Brincat and the payments he effected. The Appellant argued that the Magistrates Court in its judgement did not analyse the evidence well and that the victim should not have been believed. The victim then declared in Court that Brincat was paid in full and therefore did not want to continue with these proceedings.

The facts of the case show that Brincat did lend money to the victim on a number of occasions. He had mentioned a number of different sums he borrowed from the Appellant to the police. The victim had financial problems due to gambling and frequently went to the Appellant for money.

The Court of Appeal in its judgement held that the law on usury is modelled on Article 644 of the Italian Penal Code, although it is not identical. In Il-Pulizija v George Xuereb decided on 15 January 2009 the Court of Appeal had said the crime is committed even with the promise of a higher interest rate.

Article 1139 of the Civil Code allows 8% and in Article 1854 allows 5% interest, if there is no agreement on the rate of interest. There are exceptions in the case of banks and bonds. Therefore, usuary takes place if there is an agreement to go beyond these interest rates. This was stated by an Italian jurist Francesco Antolisei. The crime is also sustained when there is an offer or willingness to pay high interest rates. Therefore, if the accused is aware that he is being asked to lend money for a high interest rate is sufficient for the crime to have been committed.

In this case, the evidence showed Brincat was approached by the victim asking to borrow money. There is no record of the amount borrowed, and nothing in writing. The Court said it did not believe that there was no record of the large amounts borrowed which had a span of a number of years, The victim claimed that the Appellant asked for payments every week. The evidence also showed that the interest charged was higher than 8%. The victim although forgave the appellant, told the court that he was constantly chased for money and was afraid of him, so much so that he had to leave home and enter Dar Suret il-Bniedem. Th victim explained that he was also beaten. The Court of Appeal believed that there was an agreement between the two in which the interest rate was beyond the limits imposed by the law.

As to the charge of harassment, Madame Justice Grime pointed out that it was introduced and made applicable in February 2006. The charge sheet mentions that the crimes were committed on 1 July 2006 and before.

Therefore, the prosecution has to prove that the crime was committed between February and July 2006. The was no evidence when the victim feared violence against him and when did the incidents of violence take place.

As to the punishment awarded, the court noted that Article 298C of the Criminal Code (the crime of usuary) allows a maximum of 18 months imprisonment and a maximum fine of €37,940.60, while Article 251B of the Criminal Code (the crime of harassment) allows a maximum prison sentence of 6 months and a fine of €11,646.87. The Court held that he was not guilty of the second charge.

As to Brincat being a recidivist, the Court held that although there is a long list of crimes committed on his record sheet, there was only one other crime committed prior to the commission of the crimes subject to this case. The Court had awarded a fine, but there is no evidence whether he had in fact paid the fine and in terms of Article 50 of the Criminal Code, the Magistrates Court could not declare him as a recidivist.

The Court took into consideration, that there is no evidence that the Appellant reformed himself, but it could not ignore that the victim forgave him and could not ignore the fact that the case took very long to come to a conclusion. Therefore, the court confirmed Brincat guilty of usuary found him not guilty of harassment and amended the punishment to 6 months imprisonment and to a fine of €5,000.

More in Law Report