Damages arise when a co-owner excludes another co-owner

The First Hall of the Civil Court on 15 March 2016, delivered a judgement in Paul Lungaro -v- Salvino Lungaro. Mr Justice Lawrence Mintoff held that if a co-owner of a business excludes another, then that co-owner is liable for damages.

In his writ of summons presented on 6 October, 1995, Paul Lungaro explained that the defendant is his brother. His father, who operated the hospital canteen at St Luke Hospital, died without a will in January, 1969. Upon their father’s death, the operation of the canteen was taken over by the defendant and another brother, Anthony. The lease of the canteen was held by the mother, who died in May 1986.

In November 1993, the plaintiff indicated that he wanted to participate in the canteen’s running, but in November 1993, Salvino changed the locks. After their mother’s death the government insisted that all the siblings be recognised as tenants. Therefore, the plaintiff, Paul is a co-tenant and had a right from March 1994 to participate in the profits. Therefore, the plaintiff asked the Court to award him damages.

The defendant held in reply that the plaintiff never took part in the operation of the canteen, but never blocked him from doing this.

Mr Justice Mintoff considered the facts of the case: the parties’ father had rented the canteen at St Luke Hospital since 1959. He had five children. When the father died the plaintiff was 12 years old and Salvino and Anthony took over the operations of the canteen. The mother died in May 1986 and in April 1987, the Commissioner of Lands recognised all five siblings. The plaintiff was given a wage and Salvino commented that “there are too many people here”.

In November 1993, the plaintiff asked to join the business. Anthony did not object, since he recognised he had a right. However, Salvino objected and in fact in a legal letter asked for an exorbitant sum for the use of the equipment. Following this an unworkable arrangement was introduced only to have an exchange of legal letters. There were incidents between the two, which included that Paul could not serve at the counter. Paul felt that he could not attend anymore.

The Court considered the legal issues at hand and held that the operation of the canteen was part of the inheritance of the parents of the parties and as such they had a right to be reimbursed for expenses incurred and be compensated for the time they spent in the business and to the profits, which seemed to have been kept by the defendant.

Co-owners cannot occupy common property and take the fruits of that property exclusively. Every co-owner has the right to enjoy the property and make use of it. From the evidence produced the plaintiff did not renounce his rights to the business of the operation of the canteen and therefore, also its profits.

The Court noted that the plaintiff is claiming damages for when he was not allowed to attend the canteen. The Court also commented that the brothers were not capable of solving this dispute themselves. Irrespectively of this the defendant operated the canteen exclusively for himself during this period, but the plaintiff remained a co-owner. 

According to the plaintiff’s calculations, the canteen left a profit of Lm60,000 (€139,800) and therefore, for the period in question of 25 months, his share amounted to €97,083.32. The technical expert agreed with this sum once there was only one canteen in the only hospital in Malta.

The Court then moved to order the defendant to pay his brother €97,083.21