The party claiming that an action is time barred should prove this. However, any doubt should sway in favour of the plaintiff.
This was the outcome of the judgement delivered on 30 January 2024 in Adrian Leone Ganado vs Micra Events & Services Limited. The First Hall of the Civil Court was presided by Mr Justice Robert Mangion.
In his application, Adrian Leone Ganado, explained that he was employed by the defendant company and he had lent money to it, which was equivalent to his salary of a number of months.
There was a signed agreement between the two in September 2009, where the sum borrowed was €45,000 and the company agreed to pay €500 per month. Some payments were paid, but after a few months these stopped. The plaintiff asked a number of times for his money back and since this was not done, he asked the court to order the company to pay him €39,036.
The defendant company filed a statement of defence, stating that the action was time barred in terms of Article 2156(e) of the Civil Code.
The Court analysed the written agreement signed by the parties in September 2009, wherein it was confirmed that €45,000 was borrowed and that the Plaintiff was to received €500 together with interest equivalent to a fixed deposit account as issued by HSBC Bank plc.
The evidence showed that in August 2010, Leone Ganado received €2,000. More payments were made between 2011 and 2014.
The last payment took place in June 2014. Between 2016 and 2019 there was an email exchange and in 2020 a legal letter was sent, until the case ended up in court.
The Court went on to analyse the plea of prescription raised by the defendant company. Article 2156(e) allows a prescriptive period of five years.
Mr Justice Mangion quoted from a Court of Appeal judgement, Mohnani vs Stivala delivered on 11 June 2010. The judgement held that the prescription starts to run from the day on which the plaintiff may file the action. This is an objective test, where the plaintiff must be in a position to act against the defendant.
The general rule is that who pleads that the action is time barred must prove this and if there is any doubt to this it should be weighed against the defendant. The Court of Appeal had stated this in Edgar Causon vs Abdelsala A Sheibani noe on 5 October 2001.
Once this is proved, then the plaintiff must prove that the prescription was interrupted or suspended. If there is a conflict in the evidence produced then the plea of prescription should be discarded and the case is to proceed.
In this case, the defendant company stated that the prescription period had kicked off in June 2014, upon the last payment. However, in his affidavit the plaintiff explains that he had received a payment of €1,000 but did not mention when he received it. The action was instituted in October 2020, six years after the last payment. The plaintiff did state that the prescription period was interrupted. The Court quoted from another Court of Appeal judgment in Bank of Valletta plc vs Mansour Mohammed Naceur decided on 6 October 2010. In this judgement, the Court of Appeal listed the principles of interruption and suspension of prescription. The interruption of prescription is not the same as suspension. Interruption must be clear and unequivocal, such as the defendant admits he owes money to the plaintiff.
Article 2127 seq of the Civil Code lists three instances where prescription is interrupted or suspended. The first if a judicial act is filed, or else when one party acknowledges the claim and the third is when a part payment is made.
In a Court of Appeal judgement, Mary Rose Tabone vs Silvio Vassallo pro et noe dated 24 March 2004, it was stated if a debtor admits the debt, this would be a renunciation of prescription. This may be done tacitly or indirectly. The reason for nonpayment may be important, in that the debt may be still acknowledged. For example, the debt may be acknowledged, but the precise amount may be contested, the debtor would have interrupted the prescription period. There was correspondence between the parties in October 2016 wherein the defendant company explained that it wanted to first pay pending bills with VAT and the tax department.
This was also confirmed in another email in February 2018. The Court held that this correspondence does not interrupt the prescription period, because the wording of the emails does not acknowledge the debt. The plaintiff sent a confirmation letter and the company replied on 19 March 2016: “We already have an agreement and it should be valid for the confirmation you are requesting”. Here the Court held that this interrupts prescription, which had started on 21 June 2014.
The Court held that when a prescriptive period is interrupted a fresh period commenced. This is explained in Article 2136 of the Civil Code.
Mr Justice Mangion, then made the calculations in that the prescriptive period started in June 2014 and recommenced in March 2016 and the case was filed in October 2020. This meant that the case is not time barred.
The Court then moved to decide whether the debt was due and from the evidence produced the original debt was €45,000. Payments were made, but there is a balance to be paid of €39,036, which the defendant company was ordered to pay.
Av. Malcolm Mifsud
Partner
Mifsud & Mifsud Advocates
This article may also be accessed on Malta Today.
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