From the bench: How prescription encourages action in due time

On March 30, the Court of Appeal (Superior Jurisdiction) pronounced its judgment on application 387/10/1 JA, confirming the first instance judgment in full. In this case, we are dealing with prescription under civil laws.

Extinctive prescription refers to the loss of the right to an effective action against the debtor of an obligation. In this case, extinctive prescription was raised as a defensive plea by the defendant association.

Three different pleas of extinctive prescription were, in fact, raised by the defendant in first instance proceedings, but only one of them was successful. That is enough because one successful plea of extinctive prescription results in an alleged debtor being freed from the obligation to satisfy the obligation, e.g. if moneys are due and prescription applies, then the creditor cannot execute the same according to law.

Prescription is ill-understood by most people, and possibly, yet wrongly, considered unjust. It follows the notion that a person who does not care to follow up on his rights for a significant period of time, they lose the same rights. This is just, as the execution of obligations should not be possible indefinitely unless the courts or the law confer upon them an executive title by way of judgment or otherwise.

If one holds central in their understanding that any intervention of the courts or the state in the life of any person is essentially a violation to their personal life, prescription gains a better understanding. The question of whether that violation is justified according to law or ethics is the crux of the matter. Having the state come after you, through the initiative and for the interest of a lethargic and inattentive party, is not on. This is not damning upon creditors because diligent creditors act upon their rights in due time and prescription holds no bar to the execution of their rights against defaulting and condemnable debtors.

Prescription balances out the obligations and pressure concerned by leading diligent creditors to act accordingly in due time and, all other things constant, enforce their rights against debtors. On the other hand, it punishes creditors who let matters stand still for long periods of time by freeing debtors. It does this not because of some mere legal technicality but because of the inaction or inappropriate action of the creditors. Really and truly, creditors are generally afforded very generous terms to act on most rights.

In the case at hand, our highest civil court moved to stress particular points on the institute of extinctive prescription and its successful plea in defence. The action was filed by the plaintiff to recover dues to him by way of salary, wage increases, bonuses and other benefits due to him by the defendant association following an unjust dismissal as determined by the Industrial Tribunal way back in 1998.

The courts explained that it is the defendant pleading prescription who must prove the same and the moment in time in which it started to run and the fact that the applicable period elapsed. Once this is so proven by the defendant, it is up to the plaintiff to prove the suspension, interruption or renunciation of prescription.

The first court, as confirmed on appeal, determined that the right of action by the plaintiff could be exercised as from the judgment of the Industrial Tribunal in 1998 and the applicable prescriptive period was of five years. The plaintiff had acted upon his rights in 2010, a good 12 years after he could have done so.

Prescription is ill-understood by most people, and possibly, yet wrongly, considered unjust

In an interesting and novel – yet futile – attempt to save his case, the plaintiff referred to another action filed against him by the defendant. This latter action contested the findings of the Industrial Tribunal, and it was filed in 1998 and determined in 2006.

Considering the same, the Court of Appeal affirmed that an interruption of prescription though a judicial demand is possible if that judicial demand is filed by the creditor, not if the same is filed by the debtor, as in this case. Moreover, if interrupted, prescription starts running anew and is not suspended as implied by the plaintiff.

A debtor could also possibly renounce prescription. This was pleaded by the plaintiff on appeal. Interestingly, the Court of Appeal stated that a payment by the debtor, while the period of prescription is still running, results in the interruption and running anew of the applicable prescriptive period, while a payment done after the period of prescription had elapsed results in the renunciation of prescription as a defensive plea. This was not the case here.

The Court of Appeal referred to various applicable criteria for the allegation of a renunciation of prescription to succeed: While prescription is raised by the

defendant, its renunciation is raised by the plaintiff and must be proven by the plaintiff. This renunciation should be proven through evidence which is unequivocally clear and not based on vague words or expressions. Interpretation in matters of prescription is restrictive, favouring its denial (and thus, the creditor).

In this case, what the defendant association owed to the plaintiff, as per the decision of the Industrial Tribunal, was offered to him but he refused it. Following said refusal, the defendant association deposited the amounts due under the authority of the courts soon after the case determined in 2006. This was not deemed to result in the renunciation of prescription against the claims of the plaintiff.

The plaintiff had failed to act to cash the same deposited amounts and he only acted in 2010 to enforce payment of alleged dues, inclusive of the period for which he did not turn up for work after the 1998 judgment by the Industrial Tribunal.

Besides the fact that some of the claims of the plaintiff resulted undue, the rest were subject to prescription. The end result is that, through the multiple failures to act by the plaintiff, he lost everything which he could have been entitled to. That is how prescription bites those who are lethargic and passive with respect to their rights.

Edric Micallef Figallo is an associate at Azzopardi, Borg and Associates Advocates.