Home The Malta Independent Law report: The onus of proof in civil debt claims

Law report: The onus of proof in civil debt claims

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In its judgement on the 7 January 2019, delivered in the names of Shield Security Consultants Limited vs Martin Zerafa f’ismu personali kif ukoll ghan-nom u in rapprezentanza tas-socjecta Datanet Security Systems Limited, the Court of Magistrates, presided over by Dr. Gabriella Vella held, inter alia, that the onus of proving that a debt is due shall lie on the party claiming such debt and that a contract for hire which is not signed by both parties, will not suffice to reasonably prove such outstanding debt.

Shield Security Consultants Limited, the plaintiff, instituted an action against the defendant, both in his personal capacity and as a representative of Datanet Security Systems Limited, claiming the outstanding payment of  €5,168 representing the sum still due from a larger amount in respect of the hire of security scanners.

The defendants objected to the plaintiff’s claim, stating that a) the defendant in his personal capacity has no juridical relationship with the plaintiff and should therefore be released from the case in question and that b) the claim was unfounded in law and in fact, and that the amount mentioned is not due, given that the defendant has paid the amount agreed upon in full on the 12 May 2008.

In establishing whether Martin Zerafa had a juridical relationship with the plaintiff the court further delved into the facts of the case. John Schembri as judicial representative of the plaintiff held that he was put in contact with Martin Zerafa through a professional acquaintance after being asked on whether he would be interested in providing a hire service of security scanners for the upcoming general elections. John Schembri contacted Martin Zerafa through the phone and outlined his proposal after which Martin Zerafa gave instructions to proceed with the deal as agreed on the phone and to book the scanners for the week of the election. After obtaining the Vat Number of the defendant company, the plaintiff instructed its accountant to issue an invoice for the hire service on the terms agreed on between the parties.

The scanners were delivered to the Electoral Counting Hall by an employee of the plaintiff, and upon his return, reported that he had delivered the scanners. However, the employee of the defendant company did not sign the Notice of Consignment on Temporary Loan by Hire Basis since Mr. Zerafa was unavailable at the Hall at the time. Mr. Schembri did not push on the matter further, trusting that Mr. Zerafa would honour the business agreement. Sometime after collecting the scanners from the Hall, the plaintiff duly proceeded to collect its debt from the defendant, however with no success. When contacting Mr. Zerafa directly, the defendant held that he was contesting the amount charged as it was not as agreed upon.

The court noted that, during the proceedings of the case, the plaintiff was asked to whom the scanners were rented, as they could not be rented to two persons at once, upon which he answered, to Mr. Zerafa’s company.

In light of the statement by John Schembri, the Court held that it is clear that any juridical relationship that was created for the hire of the scanners was between the plaintiff company and the defendant company represented by Mr. Zerafa, but not with Mr. Zerafa personally. The court accepted the defendant company’s request that Mr. Zerafa had no judicial relationship with the company and that he is not a legitimate party to the case.

As to the request for the payment of the outstanding sum due, the court held that the defendant company is not rebutting the hire of the two scanners; however it is contesting the rates at which the scanners were rented out. The plaintiff argued that the agreed rate was that of €760 per day, at the rate of €380 per scanner, whilst the defendant held that the rate agreed upon was that of €380 per day for both scanners for a total of 10 days, for the total price of €3,800, which amount was already paid in full in May 2008.

The court held that the burden of proof of the outstanding debt falls on the claiming plaintiff, particularly as the defendant company had already paid the plaintiff the sum of €3,800. It made reference to the case Miller Distributors Limited v. Multi Toys Limited [2002] which further made reference to the case Manuel Zerafa v Nazzareno Muscat Scerri [1970] were Judge Maurice Caruana Curran held that as a legal consideration in regards to the proof required in cases of civil debts, the courts have always held that, even though the defendant has to prove that the sum he is contesting is not due, in those cases where there are reasonable doubts on whether the amount is due or not, this doubt is to favour the defendant as the onus of proof of the debt always remains on the plaintiff seeking the payment of the debt. As claimant of the alleged debt such allegations must be proved.

Judge Maurice Caruana Curran held that were serious conflicts of proof exist and the defendant does not sufficiently provide proof as to the debt which he is claiming he doesn’t owe, the principle of ‘actore non probante reus absolvitur’ remains and thus the plaintiff still needs to sufficiently prove his case, otherwise the defendant is acquitted. Furthermore the plaintiff may not rely on the principle of  ‘reus in excipiendo fit actor’ – ‘the burden of proof weighs on the plaintiff, but the defendant in objecting becomes a plaintiff’ as the onus of proof in cases of civil debts remains with the plaintiff. This prevents cases were the plaintiff easily wins a case, notwithstanding the court having serious doubts on whether there is a debt due.

The onus of proof is completely shifted onto the creditor solely in those instances where the payment of debt due is proved beyond any reasonable doubt. The court further held that the proof of the debt need not necessarily be evidenced through a receipt, as other forms of payments exist (Joe Chetcuti et v. Joseph Pearson et noe [1998]).

In analysing the different interpretations of the rates of hire as contested by both parties, the court looked at John Schembri’s claim that the rate agreed upon was that as found in the Conditions for Temporary Loan by Hire annexed to the Notice of Consignment on Temporary Loan by Hire Basis, which he claims documents the rate verbally agreed upon by the parties.

Notwithstanding the claims of John Schembri, the Court cannot refrain from observing that the central point of proof that the plaintiff is basing its arguments on, i.e; the Conditions for Temporary Loan by Hire were never signed by Martin Zerafa as representative of the defendant company. John Schembri held that the lack of signature was due to Martin Zerafa not being present at the Hall at the time of delivery and that he exercised trust and did not push the matter as he believed that Martin Zerafa would honour the business agreement. Mr Zerafa’s testimony contrasted the above, were he stated that he did not sign the Conditions for Temporary Hire, as they did not reflect the rate agreed upon and that he had returned the unsigned contracts with the employee of the company.

The court noted that the lack of countersignature by Martin Zerafa, seriously impinged on the validity of the plaintiff’s proof against the defendant. The courts’ observation is based on the legal principle that if a private writing is not signed by both parties to the contract or the signatures are not authenticated as required by law, the private writing has no legal validity.

The court is not saying that the hire of the scanners is null, and it makes reference to Article 1525 of Chapter 16 of the Laws of Malta, which hold that the contract of hire, both of objects or work, can occur both in writing as well as verbally, however it is concluding that, the Conditions for Temporary Loan by Hire have no value in proving the claim of the plaintiff company in regards to the alleged sum due by the defendant.

Based on the above, the court held that the plaintiff company did not manage to sufficiently prove its claims in respect of the defendant and the outstanding debt of €5,168 and the claim was subsequently thrown out. The Court rejected all the claims raised by the plaintiff in their entirety and upheld the defence raised by the defendant.

 

 

Dr Neil Bezzina is an Advocate at GANADO Advocates. 

Original article found on The Malta Independent

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