Husband ordered to pay €1.3 million in penalties for not honouring separation contract

A court has ordered a husband to pay almost €1.3 million in penalties for his non-compliance with a contract of separation.

Magistrate Joanne Vella Cuschieri, presiding over the Gozo Court of Magistrates in its superior jurisdiction, imposed the eye-watering fine after the court noted that no reply or note of submissions had been filed by the defendant at any stage in the proceedings.

The issue dealt with a contract of separation signed by the couple in 2009. The couple, who have three children over the age of 18, had separated by mutual consent and signed a contract to this effect in November of that year.

The contract stipulated that the husband was to assign his share in a villa, worth €700,000, to his estranged wife within a year or incur a penalty of €1,000 per day in pre-liquidated damages.

The wife had filed a lawsuit in May 2014, noting that the husband had not complied with several demands for payment, requesting the court order her estranged husband to honour his contractual obligation. She claimed the amount owed to her was €1.137 million.

The Court noted that the plaintiff had waited nine years to file a note informing the courts of the husband’s non-observance of the previous judgment, noting that creditors have a duty to minimize the damages due to them. However, it also noted that a debt with Lombard Bank, which was secured by the villa, amounted to €1.242 million as at July 2015 and that there were other creditors who required payment. The bank had initiated judicial proceedings to have the house sold by auction.

It held that the penalty was justified and condemned the husband to pay his wife €1,292,000, aside from any further penalties which may be incurred until the amount is settled.