Issue link: https://maltatoday.uberflip.com/i/1545285
8 maltatoday | SUNDAY • 7 JUNE 2026 LAW A claimant who asserts that conditions of a sale were sat‑ isfied must produce the best available evidence to support the claim. Failure to do so could prevent a court from or‑ dering the completion of a sale and instead order restitution of any amounts paid. This was held in the judgment delivered by the Civil Court (First Hall) presided by Judge Francesco Depasquale, in the case Luke Chetcuti vs Michael James Pearce, Samuel James Reynolds and Black Swan Solu‑ tion Limited. The dispute concerned two contemporaneous share pur‑ chase agreements dated 18 and 20 June 2018 by which Hugo Chetcuti was to acquire mi‑ nority share parcels in Taxmal Limited from Pearce and Reyn‑ olds respectively. Each agree‑ ment defined the shares to be transferred and a fixed consid‑ eration. Pearce's shares were to be bought for €33,000 and Reynolds' shares for €139,649, for an aggregate consideration of €172,649. The contracts expressly con‑ tained a "Conditions Prece‑ dent" clause stating that com‑ pletion and payment were conditional on specified mat‑ ters occurring prior to the Completion Date. Clause 5.1 in the contract fixed completion "no later than Friday 23 June 2018". Hugo Chectuti transferred the funds—€95,000 through a bank transfer and €42,105 by cheque—into the account of Black Swan Solution Limited, a company administered by Pearce and Reynolds. Hugo Chetcuti died short‑ ly after and Luke Chetcuti, as heir, pursued restitution of the €137,105 on the grounds that the suspensive conditions were never satisfied and the trans‑ fers were therefore premature and not due. Pearce and Reynolds filed a counterclaim for the unpaid balance of the purchase price and sought a declaration from the court that the contracts had been completed and that registration formalities remain to be executed. The court analysed the evi‑ dence produced by the parties and the key evidential threads were: 1. Conflicting witness ac‑ counts as to whether the "Con‑ ditions Precedent" and Sched‑ ule A third‑party conditions, notably board resolutions and specific due‑diligence deliver‑ ables, were satisfied; 2. The existence and prov‑ enance of the four cheques forming part of the considera‑ tion; 3. Documentary lacunae — notably that no board resolu‑ tion was produced in court; 4. The registration trail: Shares in respect of Simon Mizzi's acquisition were regis‑ tered with the Malta Business Registry while no transfers in Hugo Chetcuti's name were ev‑ er registered. Central to the court's analy‑ sis was determining what type of agreements were reached. Were the agreements prelim‑ inary—promise of sale agree‑ ments—or full share purchase contracts subject to suspensive conditions? The court con‑ cluded the latter was the case. The contracts were titled "Share Purchase Agreement" and contained vendor and purchaser warranties and un‑ dertakings, a clause specifying payment "on completion" and an express "Conditions Prece‑ dent" clause. The court there‑ fore treated the documents as binding sale contracts whose operation was conditioned up‑ on fulfilment of specified con‑ ditions. Having identified the con‑ tracts as operative but suspen‑ sive, the court proceeded to the pivotal question: Were the conditions satisfied? The court applied orthodox burdens of proof—where de‑ fendants assert completion, they bear the onus to prove satisfaction of the conditions that legally activated the trans‑ fer and obligation to pay the full consideration. The court found that Pearce and Reyn‑ olds failed to produce the best and necessary evidence. Specif‑ ically, they did not produce the board resolutions and other documents expressly required by Schedule A and Clause 4 of the agreement. Also, the doc‑ umentary trail did not show any registration of share trans‑ fers in Hugo Chectuti's name. The court treated the absence of the best evidence as fatal to the defendants' case, invoking the well‑established evidential principle that the party alleging a fact must produce the best available evidence as stipulat‑ ed in Article 559 Cap. 12 and related Maltese jurisprudence. The judgment cites and re‑ lies on previous court rulings, including Mario Falzon vs De‑ siree Caruana et al. and Marti‑ na Farrugia vs Carmel Farru‑ gia, and Simone Eve Collette Sammut vs Adam Sammut, to reinforce the argument that parties must produce the best evidence and cannot justify their claim on unsubstantiated assertions when the document relied upon is within their con‑ trol. The court used these legal precedents to justify drawing adverse inferences where con‑ tractually‑specified documents were not produced. On the facts, the court found that the "Conditions Prece‑ dent" were not proved to have been satisfied and therefore the contracts, while operative in form, did not perfect into com‑ pleted transfers obliging full payment. Consequently, the payment of €137,105 into Black Swan's account was not due and had to be returned. The court declared that Black Swan received €137,105 as mandata‑ ry for Pearce and Reynolds and ordered restitution in solidum by Pearce, Reynolds and Black Swan to the plaintiff. Conse‑ quently, the counterclaim for the balance of the purchase price was dismissed. This decision underscores three technical issues relat‑ ed to contract and evidential law. First, the formal labelling of an instrument as a "share purchase agreement" together with warranties and comple‑ tion language points strongly toward an operative sale, even where performance is con‑ ditioned. Second, suspensive conditions listed in a contract, transfer the legal incidence of performance upon demonstra‑ ble satisfaction of those condi‑ tions; without such proof, the contractual obligation, includ‑ ing obligation to register trans‑ fers and pay consideration "on completion", do not crystallise. Third, and critically for practi‑ tioners, a claimant who asserts that conditions were satisfied must produce the best avail‑ able evidence since failure to produce required documents will normally prevent a court from ordering the completion of a sale and may instead order restitution as a remedy. Suspensive conditions, burden of proof and restitution MALCOLM MIFSUD Mifsud & Mifsud Advocates