What is clear does not need any interpretation

The First Hall of the Civil Court held in its judgement of 26 September, 2016, in Marica Mizzi -v- Dr Joseph Muscat, Prime Minister, and Mario Cutajar, Principal Permanent Secretary within the Office of the Prime Minister, that where a contract is clear, it need not be interpreted.

Mizzi had filed a lawsuit, in which she explained that in April 2009, she was employed as communications coordinator of the President of Republic. Her contract was terminated on 7 April, 2014, following a change in the Presidency. The plaintiff is claiming that according to clause 4.5 of her employment contract, she was entitled to compensation. On the other hand the defendants pleaded that Ms Mizzi was employed on trust basis and that expired when Dr George Abela’s term as President of the Republic ended. The clause 4.5 mentioned by the plaintiff, is intended to be invoked if there is an unpredicted termination of her employment. Her termination did not fall under these circumstances. 

Mr Justice Lawrence Mintoff, who delivered the judgement, examined the evidence produced. From the acts of the case, the plaintiff was employed by the Office of the President, when Dr Abela was Head of State, and the employment was terminated when Dr Abela was no longer President. According to Mizzi, clause 4.5 of her employment contract became applicable and she was entitled to compensation. This was contested by the Office of the Prime Minister.

Mr Justice Mintoff held that the interpretation of a contract is an intellectual exercise, aimed at finding what had been agreed and investigating the consent of the parties when they reached the agreement. Prominent civil legal author Pothier has said that whoever interprets the contract, must look for the intention of the parties, even when the wording is clear.

The Court held that this is not the legislator’s intention. According to Laurent, one must examine whether the wording runs counter to what the parties intended and the wording gave a different interpretation to this intention. However, if the wording is clear and leaves no doubt, one must keep to the wording and there is no need of interpretation.

The Maltese courts have followed this philosophy, as in previous judgements Gemma Fenech -v- John Bugeja decided by the Court of Appeal on 20 October, 2003. According to Article 1002 of the Civil Code, when the words used in a contract are clear, there is no interpretation. On the other hand when the wording of the agreement does not match the intention of the parties, then the intention should prevail. In this, the rules of interpretation should be followed. 

The Court adopted this doctrine in the facts of this case. The Court pointed out that Ms Mizzi agreed that clause 4.5 was clear and did not need any interpretation. This clause stated that compensation is due “in the event of termination of contract due to a change of the President”. The word termination is used in a number of clauses of the employment contract. The term termination is used in circumstances when the contract is stopped before it expires and therefore, when a contract finishes before when the time period runs out.

The term expiry, is also used in the contract. Clause 4.4 of the contract makes a distinction between non-renewal and termination. Therefore, if the contract is not renewed, it is not terminated. Clause 4.5 reads “in the event of termination of contract due to a change of the President”, which means that while the contract is in force, the President is changed and therefore, the contract is terminated. In fact, clause 3.5 of the contract stated that Ms Mizzi will be given payment of accumulated vacation leave “in the exceptional event that this contract is terminated in conformity with clause 4.5”.

The Court commented that the change of President of the Republic is not an exceptional event, but takes place every five years and if clause 3.5 of the agreement mentioned “an exceptional event …” this can only mean if the President is changed during the five-year term. Mr Justice Mintoff held that the wording is very clear, even though the former head of the Prime Minister’s secretariat, Edgar Galea Curmi, testified that terminal benefit was given to allow persons of trust to reintegrate themselves in the jobs market. Mr Galea Curmi and other witnesses could not give examples of persons in Ms Mizzi’s position who were given compensation.

The Court then moved to dismiss the case.

Malcolm Mifsud, Partner, Mifsud & Mifsud Advocates