Article 167 and the subsequent provisions of the Code of Organisation and Civil Procedure (Chap. 12 of the Laws of Malta) allow a lessor interested in demanding the eviction of his lessor from an urban or rural tenement, the faculty of requesting the court to directly accede to his demand without proceeding to trial, provided that the action is one falling within the competence of the Superior Courts.
In actions of this nature, referred to as “Special Summary Proceedings” (in Maltese Proċeduri bil-Giljottina), the defendant is precluded from entering a defence to the action and essentially, from exercising his right to be heard on the merits, unless he is successful in proving the existence of a valid defence to the case or a fault in the procedure adopted by the plaintiff.
In a judgment delivered on May 13, 2021 in the names Indis Malta Limited (previously known as Malta Industrial Parks Limited) vs. Daniel Farrugia and Elton John Zammit, following a demand by plaintiff as envisaged in Article 167 of Chap. 12 of the Laws of Malta, the First Hall of the Civil Court ordered the defendants to vacate and release from their possession in plaintiff’s favour the leased premises, namely the factory ‘KKW038’ in the Industrial Section situated in Kordin, which premises had been transferred under a title of temporary emphyteusis for a period of 65 years.
This judgment was overturned by the Court of Appeal on June23, 2022.
The facts of the case date back further, however, to an emphyteutical concession originally made by Malta Industrial Parks Limited (as it was then known) in favour of Dolphin Industrial Services Limited (of which Farrugia and Zammit, the defendants, are directors), by means of a deed published in the acts of Notary Pierre Attard on the July 22, 2004.
The emphyteutical deed was made subject to a number of conditions, namely, that the emphyteuta recruits a minimum number of 35 employees in a period of three years and maintains the recruitment of said employees throughout the term of the emphyteutical concession and uses the premises exclusively for industrial purposes.
In fact, Dolphin Industrial Services Limited i.e., the emphyteuta, had allegedly stopped making use of the factory, thereby violating the conditions stipulated in the emphyteutical deed.
On November 20, 2019, Malta Industrial Parks Limited filed proceedings against Dolphin Industrial Services Limited, for the purpose of asking the First Hall of the Civil Court to declare the nullity of the emphyteutical concession following a breach of the conditions stipulated therein by the defendant company and consequently, to order the defendant company to return possession of the premises in its favour.
Company struck off the register, then reinstated
While the proceedings for nullity were still ongoing, on July 6, 2020, the defendant company Dolphin Industrial Services Limited i.e., a party to the proceedings, was struck off the registry.
Therefore, the plaintiff company chose to rely on the provisions of Article 325 of the Companies’ Act (Chap. 386 of the Laws of Malta) which state that the assets of the company shall devolve upon the Government of Malta and with that reassurance, withdrew the proceedings in their entirety against the company.
Seeing as Mr Farrugia and Mr Zammit qua directors of the company Dolphin Industrial Services Limited continued to occupy the premises in the absence of a valid title at law, despite the latter having devolved upon the Government of Malta, Indis Malta Limited instituted proceedings against Mr Farrugia and Mr Zammit in their personal capacity in February 2021, demanding their eviction from the premises (Indis Malta Limited vs. Daniel Farrugia and Elton John Zammit). As mentioned above, judgment in this regard was delivered on the 13th of May 2021.
To the plaintiff’s dismay, however, the ‘original’ defendant company Dolphin Industrial Services Limited was reinstated, and its name placed back on the register following a decision of the Civil Court (Commercial Section) on March 18, 2021 i.e., when the proceedings against Mr Farrugia and Mr Zammit had already been lodged by Indis Malta Limited. Nevertheless, the plaintiff company chose not to alter its demands regarding the illicit possession of the property by individuals Mr Farrugia and Mr Zammit.
Appeal decision
The judgment of the First Hall of the Civil Court whereby the defendants Mr Farrugia and Mr Zammit were ordered to vacate the premises on the basis of Article 167, was overturned by the Court of Appeal in its Superior Jurisdiction on the 23rd of June 2022.
The Court of Appeal referred to the decision of March 18, 2021 which reinstated company Dolphin Industrial Services Limited and effectively, “il-kumpannija għandha titqies li kompliet bl-eżistenza tagħha daqslikieku isimha ma kienx tħassar.” The Court of Appeal went on to say that the defendant company must have been treated as never having devolved upon the Government of Malta, owing to its reinstatement, and so the plaintiff company had no right at law to request the eviction of the defendants in their natural capacity without first seeking to annul the emphyteutical concession or waiting until the end of its term.