In the military and football, counter-attacking has always been a favoured tactic; it allows the defendant to turn an offence into its own attack, thereby surprising the opponent and gaining tactical advantage.
At first glance, the counterclaim looks as somewhat of a similar move, although its purposes are less tactical and have more to do with the principle of the ‘economy of justice’. In a court of law, a party’s demand is a counterclaim if it asserts a claim in response to the claims of the other.
Simply put, a defendant of a lawsuit may reply and then turn onto the offensive and put forward a claim of his own against the original plaintiff. This would be a counterclaim, known in the law as ‘reconvention’ (rikonvenzjoni or kontro-talba in Maltese).
Article 396 of the Code of Organisation and Civil Procedure (COCP, Chapter 12 of the Laws of Malta) states that in any action, it shall be lawful for the defendant to set up a counterclaim against the plaintiff, provided the claim of the defendant is connected with the claim of the plaintiff, in the sense that it either arises from the same fact or from the same contract or title giving rise to the claim of the plaintiff; or if the object of the claim of the defendant is to set off the debt claimed by the plaintiff or to bar in any other manner the action of the plaintiff or to preclude its effects.
The idea is that two issues that can be dealt together are better dealt like that, than separately. A properly-utilised counterclaim can lead to a more efficient and consistent delivery of justice.
It is not just that it is always faster to deal with two cases as one; there is also the issue that two cases that have to do with the same issue but which are dealt with separately by a different judges can easily lead to two conflicting judgments.
Take this as an example: the plaintiff files a lawsuit, claiming that the defendant owes him money in virtue of a contract of works signed with the defendant. The defendant files a separate lawsuit to annul the same contract, claiming that he signed it under duress.
Both win and the plaintiff would have obtained a court order for the payment of a sum of money in virtue of a contract which another court would have declared as being null and void.
Surprisingly, this does occasionally happen and the institute of counterclaim (as well as other institutes, such as the ‘plea of connection of actions’) seeks to avoid these tricky situations.
Unfortunately, however, the counterclaim is often used with tactical intentions, a move which our courts rightfully frown upon.
The way to set up a counterclaim is to file it together with the reply to the original lawsuit. That is the only time one can file a counterclaim
The way to set up a counterclaim is to file it together with the reply to the original lawsuit. That is the only time one can file a counterclaim. When a counterclaim is filed, both claims are then dealt with together and decided in one judgment.
The judgment of ‘Anthony Sciberras et v Angelo D’Amato et’ (176/2012RGM) dealt with many interesting legal issues, one of which was a plea made by the plaintiffs stating that the counterclaim filed by the defendants against them was null and void since it was not ‘connected’ to the plaintiff’s claim. The plaintiff said that the defendant could not have used the counterclaim procedure and instead had to file a separate lawsuit.
The law is clear: for a counterclaim to be valid, it has to be “connected with the claim of the plaintiff” in the way provided by Article 396 COCP (cited previously). The counterclaim has to be such as to offset the plaintiff’s claim or bar it in any other way. Alternatively, the counterclaim has to originate from the same fact, the same contract or the same title.
The court quoted Italian jurists who spoke about “communanza di origine”. For a counterclaim to be set up, there must necessarily be a definite nexus between the claim and the counterclaim. It also quoted past judgments, who had held that the counterclaim is an extraordinary and special remedy and thus it has to be used carefully and in strict adherence with the law. So, unlike the counterattack in military situations and in football, the counterclaim has a very specific purpose and indeed, using counterclaims as a ‘mere tactic’ is discouraged, if not considered as being outright unlawful.
The court explained that the phrase “arising out of the same fact” in Article 396 has been interpreted widely to mean not only the particular circumstance brought about by the plaintiff, but also the wider understanding of the circumstances preceding it or those that have to do with it.
In their sworn application, the plaintiffs had complained that the defendant’s property had created a number of illegal servitudes onto their property. The defendants retorted by filing a similar claim, holding that it was the plaintiff’s property that had created illegal servitudes on their property. The first lawsuit’s subject was the plaintiff’s property, while the subject of the counterclaim was the defendant’s property.
The court noted that the second claim could not in any way offset or annul the first, nor was it based on an identical title or contract. It further held that the fact that the two properties in question were situated next to each other did not mean that the counterclaim arose out of the same fact.
Indeed, the evidence needed for the counterclaim was different than that needed for the original lawsuit and, therefore, it could not be stated that the cases were connected as understood by Article 396 of the COCP.
As a result, the court agreed with the plaintiffs that since the counterclaim did not respect the letter of the law, it was null and void, and could not be considered further.
Carlos Bugeja is partner at Azzopardi, Borg & Abela Advocates.