Issue link: https://maltatoday.uberflip.com/i/602004
52 maltatoday, SUNDAY, 15 NOVEMBER 2015 Opinion T he First Hall of the Civil Court, presided by Mr Justice Lawrence Mintoff, rejected a request to revoke a garnishee order because the court felt that the property put up as a guarantee was not sufficient. This was decided on 11 November, 2015 in the proceedings Carmelo Mallia and Mary Grace Mallia -v- All Invest Company Limited, Patrick Massa, Wallace Falzon, Rose Falzon, Kenneth Falzon, and Rose Falzon in the name and in representation of their minor son Keith Falzon, and Rosewall Investments Limited. Rosewall Investments Limited filed an application following a garnishee order which was filed against them in February of this year. The plaintiffs, Carmelo and Mary Grace Mallia, also filed a warrant of prohibitory injunction against the sale or transfer of a number of properties and as such the company was of the opinion that the Mallias claim was sufficiently guaranteed. The company referred to a property in Zabbar which was valued over €1 million. As such the garnishee order should be revoked. The Mallias replied by saying they discovered that Wallace Falzon, shareholder and director of All Invest Company Limited, ended the community of acquests with his wife Rose Falzon and she is now the owner of the substantial share of the property, while other property was donated to their children. Furthermore Wallace Falzon transferred his shares to a nominee company, the beneficial owner of which is not known. According to the audited accounts of the company filed at the Malta Financial Services Authority, it was held that the company made a profit of €3,596 in 2013 and increased it to €13,549 in 2014. The company is in liquidation on Falzon's request and the company had a number of loans. The Mallias then quoted a number of judgements such as Franstan -v- Kashmiri Palace Limited et decided on 11 June, 2015, which held that an alternative guarantee has to be as sufficient as to what is being held by means of the warrant. Article 836 stipulates: 836. (1) Without prejudice to any other right under this or any other law, the person against whom any precautionary act has been issued, may make an application to the court issuing the precautionary act, or, if a cause has been instituted, may make an application to the court hearing such cause, praying that the precautionary act be revoked, either totally or partially, on any of the following grounds: (c) that other adequate security is available to satisfy the claim of the person at whose request a precautionary act was issued either by the issue of some other precautionary act or if such other security can to the satisfaction of the court adequately secure the claim; or (e) if the security provided is deemed by the court to be sufficient; The Court then examined the evidence produced before it and Rosewall produced its auditor as the only witness. The audited accounts of 2014 showed that all taxes were paid and the company was in a healthy position. There was a loan from the director of €606,390. The company held in assets immoveable property valued over €1.5 million. The auditor could not say whether this property could be used as a guarantee for the bank to issue a guarantee of payment to the Mallias. Furthermore the auditor failed to inform the court who was the beneficial owner of Rosewall Investments Limited. The Court also held that the value of the property was slightly more than the loan the director gave to the company and therefore, if sold, the Mallias would not have their claim satisfied. The public registry searches do show that the company purchased the property, since only the liabilities were presented without presenting the transfer side of the searches. The Court further commented that if the value of the property is that claimed by the company, then it should have been put as collateral for a bank guarantee. In fact the company argued that such a bank guarantee would be difficult to obtain and therefore, the court felt sceptical on its true value. The Court then quoted a previous judgement QO -v- NDP of 23 July, 2015 which held that if an immovable property is to be offered as an alternative guarantee according to Article 836, the applicant must prove that the property is available and may satisfy the claim. In fact, in this case Mr Justice Mintoff held that he did not see that the property subject to the warrant of prohibitory injunction and the guarantee offered by Rosewall Investments Limited is sufficient at law and therefore turned down the request to revoke the garnishee order. Dr Malcolm Mifsud is partner at Mifsud & Mifsud Advocates Malcolm Mifsud mmifsud@mifsudadvocates.com.mt mmifsud@mifsudadvocates.com.mt T he Environment and Planning Review Tribunal turned down an appeal against an enforcement notice associated with the illegal construction of a garage coupled with the industrial use undertaken therein. In furtherance to the decision, the site owner filed an appeal before the Court of Appeal (Inferior Jurisdiction), insisting that the building in question is "legally established ". In his submissions, appellant made express reference to the definition of the term 'legally established ' found in the recently published Rural Policy and Design Guidelines. According to these guidelines, "any intervention, including land-use change and land reclamation which is visible on the 1978 aerial photographs" is considered "legally established ". In this case, there was no contestation that the building was constructed prior to 1978 and consequently the appellant reasoned that the Authority is precluded from carrying out any direct action in terms of Article 86 (12) (a) of the Environment and Planning Act. (This Article stipulates that the Tribunal shall quash an enforcement order or notice to which the appeal relates if it is satisfied that "a licence or permission was granted under the current law or under any other law which preceded the current Act or that no such licence or permission was required in respect thereof ".) In reaction, the Authority made reference to the Tribunal 's decision, pointing out that a clear distinction needs to be made between the terms "legally established " and "presumed to be covered with a permit". The Authority argued that a building which was constructed illegally prior to 1978 is construed to be "legally established " only if the site is subject to a planning application within the context of the Rural Guidelines. The Authority emphasized that, in this case, the dispute concerns an enforcement notice characterized by "continuous" illegal use and not a planning application. In its assessment, the Court held that the issue under dispute constitutes a "point of law" and proceeded to delve into the merits of the case. Subsequently, the Court confirmed that the definition for "legally established buildings" contained in the Rural Policy Guidelines should be made use of in those instances where an application concerns "redevelopment" or "change of use" within outside development zones. In contrast, this definition bears no relevance in the case of enforcement orders or notices. Against this background the Court rejected the appeal and held that the enforcement order is valid. robert@rmperiti.com Robert Musumeci is a warranted architect and civil engineer. He also holds a Masters Degree in Conservation and a Law Degree Pre-1978 buildings are not automatically "legally established" Garnishee order not revoked due to lack of guarantees Robert Musumeci MEPAwatch Definition for "legally established buildings" in Rural Policy Guidelines should be made use of where application concerns "redevelopment" or "change of use" within ODZ If the value of the property was as claimed by the company, it should have been put as collateral