When the defendant fails to file a statement of defence, this does not mean they are admitting to the claims of the plaintiff. This was held in a judgement delivered by the First Hall of the Civil Court on 13 March 2025 in the names of R&E Online Marketing Limited vs eGaming Lab Ltd. The court was presided by Mr Justice Mark Simiana.
The Plaintiff Company in its sworn application explained that the parties to the court case had entered into a White Label Partner Agreement in October 2017. The Defendant Company had to provide the Plaintiff Company a number of services upon payment, amongst which a gaming licence to be used for a software platform. However, the Plaintiff Company claimed that the Defendant Company failed to perform the obligations listed in the contract. As a consequence, the Plaintiff Company could not operate a gaming business. The Plaintiff Company suffered damages and asked the court to liquidate these damages.
The Defendant Company was notified with the sworn application but did not file a statement of defence.
Mr Justice Simiana analysed the contract between the parties and found that the Plaintiff Company paid for the licence, the set-up fee and the gaming engine maintenance fee. The contract was to be valid for four years and could have been renewed. Clause 15 of the contract stated that if any of the parties breached the contract then it would be terminated.
In October 2018, the Plaintiff Company sent a letter to the Defendant Company listing the breaches of contract and calling upon them to remedy the situation. In the same month the Defendant Company informed the Plaintiff Company that the contract was being terminated and the operations had stopped since the company was in financial difficulties.
The accountant of the Plaintiff Company testified and explained the losses and damages sustained. These included the salaries of the employees, rent of the offices, water and electricity costs, costs on technical subscriptions, advertising and others.
The Court then held that since the Defendant Company did not file a statement of defence, it could not raise any pleas and neither could it present any evidence. The courts have always treated this situation in a punitive manner. This is a sanction against the Defendant that fails to do their duty to carry out a court order.
However, the fact that no statement of defence is filed does not mean that the Defendant is admitting to the claims. The presumption is that the claims are being challenged and they still have a right to appeal. Therefore, the Plaintiff has to produce sufficient evidence to prove its claims.
In this case, the director of the Plaintiff Company showed how the Defendant Company did not fulfil its contractual obligations. The evidence showed that the conditions were not observed and therefore the claim of the Plaintiff company was upheld.
The court also held that the claim for a refund for wages, rent and other office expenses cannot be upheld, since it wasn’t proven that they are a direct consequence of non-performance of the contract.
On the other hand, the Court allowed the refund of expenses connected to advertising and a deposit. The Court calculated that the Defendant Company had to pay €41,512.
Av. Malcolm Mifsud
Founding Partner
Mifsud & Mifsud Advocates
This article may also be accessed on MaltaToday.
For more information you can contact one of our Team Members at Mifsud & Mifsud Advocates.
