Rabat council ordered to pay €25,000 for abusive contract termination

A court has ordered the Rabat local council to pay €25,000 in damages to Synthesis Management Services after it illegally terminated a cleaning contract with the company without due process.

Synthesis Management Services had filed the case after the council, then headed by Mayor Sandro Craus and Executive Secretary Anthony Bonello, abruptly ended its contract in October 2021, three years after the company had won the tender.

The court found that the council’s decision to terminate the contract was unjustified and ordered it to compensate Synthesis Management Services for the damages suffered.

The dispute stemmed from a series of default notices issued over a four-day period, citing alleged breaches of contract. A termination letter followed the next day.

However, the company insisted it had never defaulted and argued the notices were based on reports compiled by a handyman rather than proper assessments. It also claimed it was never formally notified of the alleged defaults until much later.

According to testimony, company director Raphael Carabott only received the letters on 25 October 2021, when he visited the council’s offices in person. In the meantime, the company had already written to the council in October and November contesting the allegations—letters that the council appeared to ignore.

Synthesis Management Services argued that the termination was carried out without a valid reason and in breach of contractual terms. It insisted it had honoured all its obligations, describing the council’s decisions as unfounded and contrary to law.

The company asked the court to declare the termination abusive and illegal, and sought damages to cover losses sustained until January 2022.

Default notices and procedure breached

The court heard how the dispute arose after the Rabat council issued three separate default notices in October 2021.

The first notice, dated 8 October, claimed contractors were unwilling to work with the company due to communication issues. Two more notices, both dated 12 October, claimed sweepers were not being properly supervised and that garbage collection was not carried out.

A day later, the council issued the termination letter, accusing the company of defaulting on its contractual duties.

But the company denied the allegations, insisting that it had continued to meet its obligations and that the accusations were baseless.

The court noted that the contract laid down a clear termination procedure, requiring the council to give seven days’ notice and to obtain approval from the contracts department before ending the agreement.

However, no evidence was presented to show that such approval was sought, nor that proper notice was given.  Instead, the default notices and the termination letter were issued in quick succession over a matter of days, leaving the company with no meaningful opportunity to address the allegations.

The court also observed that the contract was terminated before the council held a formal meeting on the matter. It emerged that a meeting was meant to take place between Synthesis Management Services and the subcontractor responsible for the sweepers, but this never materialised.

‘No chance to defend itself’

Councillor Rudolph Grima testified that, after the third default notice, termination became inevitable, but nonetheless recommended a first meeting with all the parties involved. Despite this, the councillors voted unanimously to revoke the contract.

The executive secretary testified, suggesting that the company could have defended its position and rectified the alleged shortcomings. Yet the court dismissed this argument, pointing out that the sequence of notices and the swift termination left no realistic chance for the company to comply.

In its judgement, the court concluded that the council had failed to honour its own contractual obligations and acted abusively in ending the agreement, awarding the company €25,000 in damages.

The court also flagged inconsistencies in the testimony of then-Mayor Sandro Craus, noting he had painted contradictory pictures of the company’s director.

On one hand, Craus claimed that director Raphael Carabott was aggressive, allegedly challenging employees to fights whenever they disobeyed or made mistakes. However, Craus also claimed that Carabott was absent and failed to supervise the workers properly.

The court remarked that Carabott had in fact been doing his job when he reprimanded an employee for showing up to work in shorts, since the tender specifically required employees to wear dark-coloured trousers as part of the uniform.

The court acknowledged that Carabott may indeed have confronted the subcontractor’s employees, but noted that he could have handled the situation with more diplomacy, especially given that some of the workers may have been vulnerable or differently abled.

Even so, the court found no evidence that his actions were intended to provoke a fight, concluding instead that his conduct stemmed from a desire to ensure the work was being properly carried out.

Relationship breakdown, not breach

The court said that, as contracts manager, Carabott and his company were fulfilling their obligations under the agreement.

It ruled that the termination was not genuinely motivated by any contractual breach, but rather by a breakdown in the working relationship between the parties.

“The court expects the mayor to foster unity and address any issues between the contractors and the contracts manager until the contract expires, rather than inflaming the situation by instructing contractors to bypass the contracts manager, who is responsible for overseeing the work,” the judge said.

Concluding that there was no valid reason to terminate the agreement, the court declared the termination abusive and illegal. The company was awarded €25,055.96 at an 8% interest rate.

Judge Audrey Demicoli presided over the case.