Insights

In the case Turnkey Limited (C 55175) (the “Plaintiff”) vs. Francesco Ruggieri (the “Defendant”), the First Hall Civil Court (the “Court”),  presided over by Honourable Judge Audrey Demicoli, on the 6 June 2022 delved into Articles 836(1)(d)(f), Article 836(8)(b)(d) and 838A of the Code of Organisation and Civil Procedure (Chapter 12 of the Laws of Malta) (the “COCP”). These articles primarily deal with the requirements required to make an application to the court issuing the precautionary act, or, if a cause has been instituted, to the court hearing such cause, praying that the precautionary act be revoked, either totally or partially.

Facts of the Case

On the 14 March 2022 the Plaintiff requested that a garnishee order be issued against Mr. Francesco Ruggieri for the amount of EUR 859,715.07, which amount, inter alia, covered fees which were paid for works which never actually took place, expenses which were incurred to make good for the works which weren’t done, architect fees etc.

On the 20 April 2022, the Defendant requested the Court to: (i) revoke the garnishee order issued in its entirety, (ii) to order the Plaintiff to pay a penalty of not less than EUR1,164.69 and not more than EUR 6,988.12, and (iii) to order the Plaintiff to give sufficient security for the payment of the penalty that may be imposed by the Court, and of damages and interest, and, in default, to rescind the precautionary act.

The Defendant based his first request on Article 836(1) (d) and (f) of the COCP which states that:

 “Without prejudice to any other right under this or any other law, the person against whom any precautionary act has been issued, may make an application to the court issuing the precautionary act, or, if a cause has been instituted, may make an application to the court hearing such cause, praying that the precautionary act be revoked, either totally or partially, on any of the following grounds:

(d)  if it is shown that the amount claimed is not prima facie justified or is excessive; or

(f) if it is shown that in the circumstances it would be unreasonable to maintain in force the precautionary act in whole or in part, or that the precautionary act in whole or in part is no longer necessary or justifiable.”

The second request was based on Article 836(8)(b)(d) which states that:

The court may condemn the applicant at whose request a precautionary act was issued to pay a penalty of not less than one thousand and one hundred and sixty-four euro and sixty-nine cents (1,164.69) and not more than six thousand and nine hundred and eighty-eight euro and twelve cents (6,988.12) in favour of the person against whom the precautionary act was issued, in each of the (b) if, on the demand of the defendant for the rescission of the precautionary act, the plaintiff fails to show that the precautionary act had to be issued or that within the fifteen days previous to the application for the precautionary act, he had in any manner called upon the defendant to pay the debt, or, if the debt be not a liquidated debt, to provide sufficient security: Provided that the provisions of this paragraph shall not apply where it is shown that there were reasons of urgency for the issue of the warrant;

(d) if applicant’s claim is malicious, frivolous or vexatious.”

The third request was based on Article 838A of the COCP which states that:

“It shall be lawful for the court, on good cause being shown, upon the demand by application of the person against whom a precautionary act has been issued, to order the party suing out the warrant to give, within a time fixed by the court, sufficient security for the payment of the penalty that may be imposed, and of damages and interest, and, in default, to rescind the precautionary act.”

The Plaintiff on the other hand claimed that from the facts of the case (i) it is clear that they have a pecuniary interest (ii) they did not act maliciously, frivolously or vexatiously and that (iii) in order for the Court to be able to order the Plaintiff to give sufficient security for the payment of the penalty, point (ii) must first be proved.

Courts Considerations

The Court confirmed that a precautionary warrant may even be revoked if only one of the instances listed under article 836(1) of the COCP is present.

Article 836(1)(d): the Court stated that the examination required by the Court is a prima facie one, and is not required to delve into the merits of the case. The Court also noted that the Plaintiff provide a breakdown of the costs which represented the works which were paid for, however which did not take place. The Court deemed the Plaintiffs explanation to be appropriate and did not deem the amount requested to be excessive.

The Court went on to examine the remainder of the costs and in certain instances, where it deemed such costs to be excessive, reduced the total sum as it deemed appropriate.

Article 836 (1)(f): the Court stated that in order to claim that the precautionary act, in whole or in part, is no longer necessary or justifiable one must prove a clear change in circumstances which render the act unnecessary/unjustifiable. The Court confirmed that the Defendants failed to prove this point.

Article 836(8)(b)(d): the Court stated that whilst it agrees that the Plaintiffs did not justify the full amount requested under the garnishee order, one cannot state that the garnishee order was issued in a frivolous or vexatious manner and for these reasons the Court did not accept the Defendants request to order the Plaintiff to pay a penalty.

Article 838A: The Court confirmed that such request cannot be made “in passing” and must be made via the right means.

Courts Conclusions

The Court concluded that the Plaintiffs requests were justified, however in certain instances found that the amount being requested was excessive. The Court there reduced the amount under the garnishee order from EUR 859,715.05 to EUR194,715.07. All other requests made by the Defendant were rejected by the Court.

This article was first published in the Malta Independent.