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Court will only investigate a request for a counter-warrant on a prima facie basis

By August 14, 2022November 24th, 2023No Comments

The Court cannot enter deeply into the merits of the case, in order to decide whether it should issue a counter warrant for a garnishee order.

The in depth analysis of the claim is left to the Court dealing with the claim. This was held in a decree delivered by the First Hall of the Civil Court on 9 August 2022 in 100 the Whitehouse Limited -v- AG Installations Limited. The Court was presided by Mr Justice Christian Falzon Scerri.

The Applicant company, AG Installations Limited, asked the court to remove or reduce a garnishee order in terms of Article 836(1)(d)(f) of the Code of Organization and Civil Procedure and in order to pay a penalty according to Article 836(8)b).

In an application presented on 28 June 2022, AG Installations Limited explained that it has a claim against 100 the Whitehouse Limited of over €40,000 representing electrical and mechanical services carried out in a property in Rabat. There is a garnishee order on this claim.

When the action was instituted 100 the Whitehouse Limited commenced arbitration proceedings on a claim of over €120,344.96 representing works that AG Installations did not carry out and a further €103,500 as penalty since the works did not finish as agreed. The defendant company objected to the removal or reduction of the garnishee order.

The Court entered into the facts of the case in that the parties had entered into a contract of works in September 2019 where AG Installations was to provide electricity works in a property in Rabat. They had to be completed within 13 weeks and were charged a penalty of €300 a day for any delay.

As to the legal considerations, AG Installations alleged that 100 the Whitehouse Limited did not give sufficient information on their claim and did not explain how it arrived to the figure of €120,344.96. On this point the Court held that there is no need that the applicant of a garnishee order, give a detailed account of how it arrived to the claim. In Karmena Callus et -v- Dione Cassar et of 21 April 2014 the Court held that there is no need to produce any documentation showing how the figure of the claim was calculated. All is required is a sworn declaration that an amount is owed. All that is required is a few words to explain the claim. The applicant cannot invent a figure. However, in this particular case 100 the Whitehouse Limited did explain how it arrived to the €120,000 figure. €103,500 was a penalty, while €16,844.96 were used for remedial works.

The Court held that without entering into the merits of the case, it is difficult to ascertain whether 100 the Whitehouse Limited has a right to charge a penalty and from the acts of the case, there is nothing to show that AG Installations finished the works late. The latter company argued that if it was late in finishing the works this was due to 100 the Whitehouse Limited, since it changed the plans. The Court at this stage does not enter into the merits of the claim, but merely investigates whether the garnishee order is required and is reasonably enforced. This was held in Stewart Desmond Stanley -v- Therese Mangion Galea decided on 29 July 2005.

The Court at this stage cannot decide whether 100 the Whitehouse Limited has a right to push for its claim, but it still protects its claim. If the garnishee order is upheld it does not mean that the claim is justified and vice versa applies also. The Court held that from a prima facie aspect only it seems that 100 the Whitehouse Limited has a right to protect its claim by issuing a garnishee order against AG Installations with regard to the penalty. The Court will investigate in detail whether a right to the penalty exists. Now the Court has to decide whether the sum of €103,500 is excessive.

In Noel Bonnici -v- Caruana Constructive Co Limited decided on 14 August 2013 held that an excessive claim is when there is a clear difference between the claim and what is actually owed. If the right exists, but there is a difference in what is the actual claim from what has been put down in the garnishee order, then the Court may reduce the sum subject to the garnishee order. The Court held that prima facie the sum claimed is factual. The claim is based on a penalty for almost a year’s delay.

The same goes for the claim of €16,000 which represents remedial works. Nothing in the acts of the case show how this money was spent and on which works were carried out. As a result the Court agreed with AG Installations Limited that this sum is not justified and therefore, this sum is being reduced from the garnishee order.

AG Installations also argued that according to Article 836(1)(f) of the Code of Organisation and Civil Procedure, the garnishee order was not reasonable and no longer necessary. However, for this to be successful there is need of evidence showing that the circumstances have changed. This was held in a previous judgement Ivan John Debono -v- Antoine Vella on 12 January 2021. In this case AG Installations did not show any change in circumstances.

The Court did not uphold the requests for it to impose a penalty on 100 the Whitehouse Limited, since the Court held that the garnishee order is justified.

The Court then moved to uphold AG Installations Limited request limited to reducing the sum subject to the garnishee order to €103,500.

Av Malcolm Mifsud

Partner

Mifsud & Mifsud Advocates

The article is available on MaltaToday