Even after selling car, licensee is responsible for payment of licences

Vehicle licensee is ultimately responsible for payment of past licences, even if car was sold to another person.

The Magistrates Court has ruled that the licensee of a vehicle is ultimately responsible for payment of past licences, even if it is proved that that vehicle was sold to another person and that person refused to follow the transfer procedure.

Magistrate Gabriella Vella delivered her judgement on 1 July in Francis Tonna v. Transport Malta and Charles Dimech.

In his application Francis Tonna, asked the Court to turn down Transport Malta's request for payment of €4,998.41 for annual licences, which was made by means of a judicial letter filed in court on 20 September 2010, and to declare Charles Dimech responsible for such payment and order him to pay. Mr Tonna asked the Court to order Transport Malta to accept a partial transfer of the vehicle.

On the other hand Transport Malta said that Charles Dimech was not party to the judicial letter of 20 September 2010 and, therefore, could not be a party to the lawsuit. Transport Malta said that Francis Tonna admitted that the vehicle in question was sold to Dimech on 2 October 2002 and, therefore, should have had followed a procedure. As a consequence he was still the registered owner at law. As the registered owner, it was he who had to pay the licences from 2002 onwards. TM argued that it did what it was bound to do at law by instituting criminal proceedings against Charles Dimech.

Charles Dimech failed to file any reply.

Magistrate Vella pointed out that this court action followed a judicial letter filed by TM against Francis Tonna, but the latter argued that he should not effect payment since the car has been in Charles Dimech's possession since 2002. To add insult to injury, Mr Tonna was facing a number of contraventions that Mr Dimech was responsible for. The Court quoted article 26 of the Traffic Regulation Ordinance, which states that upon sale of a vehicle, TM is to be informed and the sale is to be registered. If this is not carried out the seller is still considered to be the owner.

From the evidence produced Brian Farrugia of TM testified that Francis Tonna had informed TM that the vehicle was sold to Charles Dimech on 16 January 2003. Mr Farrugia tried to contact Mr Dimech, but he did not manage. At the time the vehicle was without a licence and insurance, and in July and August 2004, TM wrote to Dimech, but no reply was received. TM informed the police and a criminal case was instituted against Dimech, who was found guilty and ordered to register the transfer or suffer a fine of Lm2 a day until the transfer was effected.

Notwithstanding this sentence, the transfer was not done. Francis Tonna was still responsible for the payment of licences. In fact the plaintiff failed to effect payment as the law stipulates. Filing criminal proceedings was the most that TM could do in such a situation. The Court commented that Mr Tonna had only himself to blame for this situation, because the transfer should have been done immediately when the vehicle was transferred. Although the vehicle in question could have been clamped or towed, this would not have changed the legal position Mr Tonna found himself in. Therefore, the plaintiff failed to prove his case and overturn TM's claim for payment.

Furthermore, the Court argued that it could not shift the responsibility of payment to Charles Dimech, even though he had not filed a defence in these proceedings. The Traffic Regulation Ordinance dictates that if TM files a judicial letter, the person to whom it is addressed may challenge that judicial letter by filing a lawsuit. However, third parties are not permitted to be involved, and, therefore, the case must be limited to Francis Tabone and TM only. Therefore, Tonna's request to order TM to seek payment from Dimech could not be entertained.

The Court ordered that the judicial letter is enforceable.

Dr Malcolm Mifsud is a partner at Mifsud & Mifsud Advocates

More in Law Report
In this particular case I would recommend that the law is amended so that someone who sells a vehicle has the right to suspend its road licence, if the buyer fails to register the sale within 15 days. Obviously the seller must produce valid documentation showing that the car was sold. TM would then give a 15 day notice to the new owner and inform him/her that the licence would be suspended if s/he fails to register the vehicle in his/her name within the 15 days period. Thus, someone would have a total of 4 weeks to transfer the car in his/her own name. Also all contraventions after the date of sale should be borne by the new owner.

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