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6 LAW 9 maltatoday | SUNDAY • 2 MARCH 2025 Law Report IN its judgment dated 20 November 2024, the Court of Appeal upheld a decision by the Small Claims Tribunal in a legal dispute between Yog.Art Ca- tering Limited vs Gismond Attard and Jacqueline Attard over the refund of a commercial lease deposit. The case re- volved around whether the landlords had unjustly enriched themselves by withholding part of the deposit, as well as key questions of jurisdiction and legal prescription. The dispute stemmed from a lease agreement for a commercial property in St. Julian's, which ran from 3 March 2014, to 16 February 2015. During the lease period, tensions arose between the parties regarding the payment of rent and utility bills. The landlords, Gis- mond and Jacqueline Attard, initiated proceedings before the Rent Regula- tion Board (RRB), alleging that Yog.Art Catering had failed to pay outstanding amounts. Following an examination of the case, the RRB ruled that Yog.Art Catering was liable for €9,720 in unpaid rent and €2,676.35 in unpaid electricity and wa- ter bills. The total outstanding amount of €12,396.35 was deducted from the in- itial €16,000 security deposit that Yog. Art Catering had provided at the begin- ning of the lease, leaving a remaining balance of €3,603.65. On 14 March 2023, Yog.Art Catering took legal action by filing a claim before the Small Claims Tribunal. The compa- ny argued that the Attards had unjust- ly enriched themselves by withholding the remaining balance of the deposit. It requested a declaration confirming that the landlords had no legal basis to retain these funds and sought an order for the repayment of €3,603.65, along with ac- crued interest. The Attards strongly opposed the claim, raising two preliminary pleas. First, they argued that the Small Claims Tribunal lacked jurisdiction to hear the case, asserting that disputes concerning rent payments and leaserelated financial matters should be decided exclusive- ly by the Rent Regulation Board. Sec- ond, they contended that the claim was timebarred, citing Article 2156(c) of the Civil Code, which establishes a fiveyear prescription period for certain claims. According to their interpretation, this period began in 2015 when the lease agreement ended, meaning that Yog.Art Catering's claim, filed in 2023, was well beyond the allowable timeframe. The Small Claims Tribunal dismissed both of the Attards' preliminary pleas. It ruled that the case was not about rent payments but rather about unjust en- richment, a distinct legal concept gov- erned by Article 1028 of the Civil Code, which refers to the actio de in rem ver- so. This legal principle ensures that no one unfairly benefits at another person's expense without a legitimate reason. Since the claim was based on unjust en- richment rather than rental obligations, the Tribunal determined that it had the proper jurisdiction to decide the matter. Regarding the timebar argument, the Tribunal found that the fiveyear pre- scriptive period did not start in 2015, as the Attards had claimed. Instead, the Tribunal held that prescription only be- gan running once the Rent Regulation Board issued its final ruling in 2022. Since Yog.Art Catering could not have pursued its claim before the RRB made its decision, the Tribunal concluded that the case was filed within the legal timeframe. Unhappy with the ruling, the Attards lodged an appeal, arguing that the Tri- bunal had misapplied the law, misinter- preted the facts, and failed to correct- ly assess relevant jurisprudence. They maintained that the case should have been heard exclusively by the Rent Reg- ulation Board and that the Tribunal erred in its determination of the pre- scription period. Ultimately, the Court of Appeal upheld the Tribunal's findings. It reaffirmed that the case concerned unjust enrich- ment, making it a valid claim under Ar- ticle 1028 of the Civil Code, and that the applicable prescriptive period of two years as the one outlined in Article 2156(f), which governs unjust enrich- ment claims. The Court also agreed that the twoyear period only began in 2022, not 2015, as Yog.Art Catering could not have filed its claim until the Rent Regu- lation Board had made its final decision. On November 20th 2024, the Court of Appeal delivered its final judgment, dismissing the Attards' appeal and con- firming that the Small Claims Tribu- nal had jurisdiction over the case. The Court ruled that the claim was valid and had been filed within the legally pre- scribed timeframe. This ruling reinforces the distinction between rental disputes and unjust en- richment claims, clarifying that a case involving the wrongful retention of funds after a final decision by the Rent Regulation Board may fall under the jurisdiction of the Civil Courts rather than the Rent Regulation Board itself. It also establishes an important precedent regarding the calculation of prescrip- tion periods, confirming that in similar cases the prescriptive period begins on- ly after a final authoritative ruling when prior legal action was necessary before initiating a claim. Appeals Court upholds ruling on unjust enrichment in commercial lease deposit dispute IAN BARBARA Associate Mifsud & Mifsud Advocates This ruling reinforces the distinction between rental disputes and unjust enrichment claims, clarifying that a case involving the wrongful retention of funds after a final decision by the Rent Regulation Board may fall under the jurisdiction of the Civil Courts rather than the Rent Regulation Board itself