On December 29, the First Hall of the Civil Court delivered a decree in camera on application 659/2021 AD.
The application was a request to revoke a precautionary garnishee order.
Precautionary acts are intended to safeguard the alleged rights of the person seeking them, which rights are subject to judicial contestation.
The proceedings decreed upon by the court and upon which we are commenting are, in fact, proceedings within the greater context of a claim for damages following an accident in which a bus crashed into the private immovable property of various people.
Among those various people, we find the person who successfully sought the issuing of the precautionary garnishee order.
As normal, there are main proceedings involving allegations and claims for damages as allegedly suffered.
These main proceedings run separately.
By main proceedings, we actually mean a fully-fledged court case aimed at finally determining the facts of the case, the responsibilities thereon, the liabilities involved and, in this case, the damages to be paid, if any at all, according to law.
In this case, such main proceedings are still ongoing at first instance; these proceedings are what most laymen understand as a kawża.
Through the filing for a precautionary garnishee order and the main proceedings, in this case, the plaintiff is seeking alleged damages amounting to around €24,000, for which he successfully sought the ordering of a precautionary garnishee order against the defendants in the main proceedings.
Said defendants are the driver of a public transport bus and his employer, Malta Public Transport Services (Operations) Ltd.
The decree given in chambers by the First Hall of the Civil Court dealt with an application filed by the defendants and an insurance company to revoke the precautionary garnishee.
As can be expected, the law provides for ways to allow for the revocation of such restrictive court orders, even though such ways are expressly laid down by law and are the only ways possible.
The application as filed was based on articles 830(3), 836(1)(c) and 836(1)(e) of our Code of Organisation and Civil Procedure.
One of the first elements to note is that the application for revocation was filed by the aforesaid bus driver and company, and also the insurance company providing insurance cover.
As we shall see, the coming into the scene of the insurance company is very relevant to the court’s decree on the application. In fact, the main driving force for the application filed was the provisions of article 830(3) of our Code of Organisation and Civil Procedure.
In short, these provisions apply when an insurance company involves itself and declares that is willing to cover the liability and pay for all sums that may be due for damages, thus paving the way for the rescission of the precautionary act.
This is quite an ad hoc specific provision and it is safe to say that the raison d’être for such a possibility is the financial solidity of insurance companies as required by insurance law for them to act as insurers.
The applicants sought to use the strength of the insurance company to have the precautionary garnishee order rescinded
The applicants, being the defendants in the main proceedings and the insurance company, sought to make use of the strength of the insurance company to have the precautionary garnishee order rescinded by the court.
In that regard, the other bases for the revocation of the same order according to articles 836(1)(c) and 836(1)(e) were somewhat secondary according to the applicants themselves.
Factually, the basis was one, i.e. the existence of an adequate insurance policy providing cover for the damages and supposedly serving as sufficient security for the revocation of the same order.
The plaintiff in the main proceedings deemed it fit to file his applications for the suit and for the precautionary garnishee order against his chosen defendants, among whom one did not find the insurance company.
It could possibly be that the plaintiff did not know of the insurance company concerned, or it could well be a crafty tactic.
In any case, it worked blissfully in favour of the plaintiff as the court observed that, as explicitly written in article 830(3) of the Code of Organisation and Civil Procedure, the precautionary act sought must have been against a person liable for damages and his insurance company.
As such, the main thrust of the application based on article 830(3) was negated by the simple reason that it applies when an insurance company is ready to foot the bill if the precautionary act itself was filed against both the insured and the insurance company, and not one or the other.
As to the other bases for requesting the revocation of the precautionary garnishee order, namely those provided by articles 836(1)(c) and 836(1)(e) of the Code of Organisation and Civil Procedure, these both seem to provide for when there is adequate or sufficient security to satisfy the court that the claims of the alleged creditor can be adequately safeguarded.
The applicants contended that the declarations filed by the insurance company were enough to satisfy the requirements of these two grounds.
The court disagreed by citing jurisprudence on these provisions. This clarified that an insurance policy is a contract between the insured and the insurance company and it does not in and of itself establish rights for the creditor of the insured.
Therefore, it does not satisfy article 836(1)(c) as, according to jurisprudence, it requires such adequate security must exist at the time of the filing for the precautionary act and that it is to be certain, clear and capable of being executed by the alleged creditor.
Similarly, in terms of article 836(1)(e), the security to be provided after the ordering of the precautionary act must be one capable of assuring the alleged creditor seeking to give effect to that security that he will not be subject to any reasonably possible or potential obstacle.
In the end, this attempt to revoke the precautionary garnishee order failed but it was revoked in separate proceedings upon the deposit of sufficient funds under court authority.
Edric Micallef Figallo is an associate at Azzopardi, Borg and Associates Advocates.