Contractors remain responsible even though the works have been accepted

When a contractor finishes the works he or she was engaged to carry out, he/she will be still responsible even if the works have been accepted and paid. This was held in Aldo Vella and Sandra Vella -v- Quadrant Limited and Woodlands Investment Limited decided on 9 December 2021 by the First Hall of the Civil Court presided over by Mr Justice Grazio Mercieca.

The Plaintiff explained in their sworn application that they are owners of property in San Gwann and they had engaged the defendant companies to carry out construction and finishing works. The Plaintiffs claimed that these were not carried out well and water seeped in and suffered damages. They asked the court to declare the defendant companies responsible for damages and order them to pay these damages.

The companies filed a statement of defence wherein they first presented 3 preliminary pleas and stated that this case is being dealt with in another case before the Small Claims Tribunal and that the action is time barred according to Article 2153 of the Civil Code and the action was extinguished following a private writing both sides signed in January 2016.

The Court analysed the facts of the case where the defendant companies had purchased the property and build a block of apartments and garages. The penthouse had to be given to the plaintiffs. In August 2015 the Plaintiff took possession of the property and cancelled the hypothecs. They drew up a snag list and a payment was made. When the items on the snag list were concluded an agreement was drawn up on 28 January 2016 wherein it was written:

“The works have been carried out and duly finished by the developers to spouses Vella’s specification and full satisfaction, and therefore spouses Vella irrevocably declare that they are totally satisfied with the works and finishes carried out and there remains no further pendency, claim, rights or pretentions against the developers over the property and the works and consequently grant full and final acquittance over the matter in the most ample manner without any reservation.”

When they moved in to live in the penthouse they experienced water seepage from different parts of the property. The companies argued that once the hypothecs were cancelled and the 2016 agreement was signed, the plaintiffs had accepted the works, including the defects that there could have been.

Mr Justice Mercieca first dealt with the defence that there was a concurrent action, in Latin ‘lis alibi pendens’, pointed out that the case before the Small Claims Tribunal concern defects in the swimming pool and this case the swimming pool is not included in the claim before this Court. Therefore, the court turned down this claim.

As to the two-year prescription period mentioned in Article 2153 of the Civil code, the companies held that this applies because the action is a claim on bad workmanship. The plaintiff argued that the action is not time barred because the action concerns a contract of works and therefore, the prescription period is of five years and not two years.

The Civil Code allows three types of action when it comes to damages. The first is damages arising from a criminal offence and according to Article 2154(1) of the Civil Code the prescription period is based on the prescription period listed in the Criminal Code. The second type is tort or quasi tort, and this is time barred by two years in terms of Article 2153 of the Civil Code. The last type of damages action is when there a non-performance of a contract, which is not a public deed. This is time barred after five years.

The quoted from Joseph Busuttil -v- Emmanuel Schembri decided by the Court of Appeal on 19 February 1954, held that one of the criteria to establish whether the damages is contractual is if the fact is independent from the contractual relationship.

In Roland Darmanin Kissaun -v- GlobalCapital Financial Management Limited decided by the Court of Appeal on 29 March 2019, the Court held the plaintiff had sought professional services on investments. There was a contractual relationship and the case focused on whether the company’s obligations were fulfilled. Therefore, the prescription period could not be of that contemplated in Article 2153. The alleged action was not independent and autonomous from the contractual relationship.

In this case, the plaintiffs’ complaint is not independent from their contractual relationship to carry out the works. Therefore, the prescription period cannot be of two years.

As to whether the action was extinguished by the 2016 agreement, the Court held that it is a long-established principle of law, that a contractor is held responsible for the works carried out even when the works were accepted. This take place more so if the defects are not apparent. It is the contractor’s obligation to see that the works are without any defects and if the works are accepted the contractor remains responsible for the works. One of the directors of the defendant companies accepted in cross examination that the company was still responsible after the works are concluded.

The Court moved to reject the preliminary pleas presented by the defendant companies.