Not refunding payment may constitute a crime

A supplier who failed to refund an order which was cancelled on the hope that his claim would be set off, was in fact committing a crime of arbitrary exercise of a pretended right. This was decided in a judgement delivered by Magistrate Dr Aaron Bugeja in Il-Pulizija -v- Bruno Tucci on 16 April 2019.

The accused was charged with misappropriation and the arbitrary exercise of a pretended right. From the evidence produced the police received a report from Jason and Mario Bezzina that their company had ordered from Tucci two heat exchangers, which had to delivered to another company. Tucci has accepted and Bezzina paid him in full. The delivery had to take place within three weeks, but three months later, the heat exchangers were not delivered. The Bezzinas were receiving pressure from their clients, and they had no option but to cancel the order with Tucci and order the heat exchangers from another supplier.

When the heat exchangers arrived, they noticed that they were addressed to Tucci. The Italian supplier informed them that Tucci had paid a deposit, but not the balance and therefore, they were not delivered. Once the Bezzinas learnt of this, they insisted with Tucci to refund what they had paid him. Tucci had explained to the police that at the time he had health problems and therefore, could not complete the order.

He learnt that Bezzina had ordered the two heat exchangers from another supplier without informing him. He did not refund the money because he claimed that the Bezzinas owed him money. Today the Bezzinas have been paid in full, with interest.

The Court then examined the legal points and started to analyse the crime of misappropriation which is regulated by Articles 293 and 294 of the Criminal Code. Article 294 applies more to this case and reads:

“294. Nevertheless, where the offence referred to in the last preceding article is committed on things entrusted or delivered to the offender by reason of his profession, trade, business, management, office or service or in consequence of a necessary deposit, criminal proceedings shall be instituted ex officio and the punishment shall be of imprisonment for a term from seven months to two years.”

In Pulizija -v- Joseph Muscat decided on 3 March 1997 by the Court of Criminal Appeal, held that misappropriation is not a crime that requires any deceit, and therefore it is not fraud, but it is the manipulation of the possession that was obtained voluntarily. In another judgement Il-Pulizija -v- Giuseppa Cauchi, decided on 21 November 1953  by the Court of Criminal Appeal, held that misappropriation takes place when the accused would have received the object for a specified reason, but that person used that thing in a manner which was not intended. Case law has also shown that the restitution of money does not necessarily amount to misappropriation, unless there is the intention to make use of the money in his favour.

On the other hand the offence of arbitrary exercise of a pretended right regulated by Article 85 of the Criminal Code, reads:

• “85. (1) Whosoever, without intent to steal or to cause any wrongful damage, but only in the exercise of a pretended right, shall, of his own authority, compel another person to pay a debt, or to fulfil any obligation whatsoever, or shall disturb the possession of anything enjoyed by another person, or demolish buildings, or divert or take possession of any water-course, or in any other manner unlawfully interfere with the property of another person, shall, on conviction, be liable to imprisonment for a term from one to three months.”

In Pulizija -v- Anthony Zahra decided by the Court of Criminal Appeal on 20 June 2014, listed the elements of this offence, the first being that that a person is not allowed to enjoy a right, the second is that the accused is acting in a way that he believes that he has a right. The third element is that the accused is taking the law in his own hands, when he is meant to use a judicial process and the last element is that the offence is not of a serious nature.  This offence can take place when there is a simple possession and is not allowed to enjoy that possession. In Il-Pulizija -v- John Vassallo decided by the Court of Criminal Appeal on 22 March 1991, held that there is no need to prove more than possession.

Magistrate Bugeja pointed out that it is up to the prosecution to prove its case beyond reasonable doubt, however, if the court deems that a witness is credible, then that would be sufficient.

In this particular case, it was proved that the accused had an agreement with the Bezzinas to deliver two heat exchangers. When the order was cancelled due to delays, the accused failed to refund the money paid. The Court held that it doubted whether Tucci had the criminal intent to misappropriate the money. Tucci had at the end of the day refunded the money and there seems not to have been any profit on his part by keeping the money.

Notwithstanding this, the delay in refunding the Bezzinas was not independent from his own will. He withheld the payment on the hope that there would be a set off what he was owed by the Bezzinas. This is not the same intention as misappropriation, but more of exercising a pretended right. He believed that he was owed money and therefore, he took the matter in his own hands by withholding payment. As a consequence he was guilty of the second charge and was fined €200.