In the case GasanMamo Insurance Limited (Plaintiffs) vs. Sullivan Maritime Limited (Defendants), heard on the 14th May, 2018, the Court of Appeal (inferior jurisdiction), presided over by Justice Anthony Ellul, ruled on the notion of competence of the court in commercial matters. The Plaintiffs, through an application filed on the 10th October 2017, requested the court to revoke and annul the sentence upheld by the Small Claims Tribunal on the 20th September, 2017.
By means of a judgment delivered on September 20th 2017 (application number 497/2016PA), GasanMamo Insurance Limited, subrogated in the rights of Gasan Zammit Motors Limited, was denied the right to recover the outlay paid for damages caused to vehicle WF 05 XXGCC 5FJ 06432 during transportation, which amounted to a total of EUR 1,834.50. The said vehicle was being transported from Italy to Malta aboard Euro Cargo Napoli, who are represented in Malta by Sullivan Maritime.
In the judgment heard before the Small Claims Tribunal, it was concluded that it is the First Hall Civil Court which is to be vested with competence in relation to commercial law cases. The Tribunal’s reasoning was based on the argument that, following the introduction of Act XXIV of 1995 (Code of Organisation and Civil Procedure (Amendment) Act), the Commercial Court had been abolished, and from then on all references made to the “Commercial Court” began to be considered as referring to “The First Hall Civil Court”.
The Tribunal further examined Article 32(2) of the Code of Organisation of Civil Procedure (Chapter 12 of the Laws of Malta), which states that:
“all causes of a civil and commercial nature shall be heard before the First Hall Civil Court.”
Following which, it went on to hold that had the legislator intended to extend the competence of the Small Claims Tribunal to cover cases of a commercial nature, defined as
“(1) controversies relating to obligations and contracts between traders and
(2) controversies relating to acts of trade between persons whomsoever”
Article 3 of the Small Claims Tribunal Act, which deals with, “the Small Claims Tribunals jurisdiction to hear and determine only all money claims of an amount not exceeding five thousand euro (€5,000)” would have been drafted in a broader manner so as to ensure that this Act reigns supreme over any other provision found in any other law.
In the case presented before the Court of Appeal, the appellants, GasanMamo claimed that the Tribunal wrongfully applied the law in deciding that such Tribunal did not have competence to hear the case brought before it.
They argued that after the abolition of the Commercial Court, one no longer needs to carry out an assessment as to whether the nature of an action is purely commercial or not. The distinction between cases of a civil and commercial nature has now become futile since nowadays cases of both a civil and commercial nature fall within the competence of the Civil Court. To this effect, the only criteria which determines and distinguishes the competence of civil and commercial cases is the value of such claims. They argued further that, under Article 3 of the Small Claims Tribunal Act, the legislator did not make any distinction between civil or commercial cases, when stating that “such tribunal has competence to hear all monetary claims, which do not exceed EUR 5,000.”
To the contrary, the Court of Appeal stated that although the Tribunal was correct in applying Article 547 of the Commercial Code (Chapter 13 of the Laws of Malta), which states that:
“Commercial jurisdiction shall be exercised by the Civil Court, First Hall”,
The Tribunal was incorrect when claiming that cases of a commercial nature do not fall within the jurisdiction of the Small Claims Tribunal.
The Court of Appeal, once again made reference to and examined in this instance, Article 3 (5) of the Small Claims Tribunal Act, which states that:
“Causes involving questions of ownership of immovable property, or relating to easements, burdens or other rights annexed to such property, even though the claim does not exceed five thousand euro (€5,000), and causes of ejectment or eviction from immovable property shall not fall within the jurisdiction of the Tribunal.”
In light of the above, the court noted that sub article (5) specifically lays out three instances in which the Tribunal would not have jurisdiction to hear a case brought before it. Thus, the Court concluded that had it been the intention of the legislator to specifically exclude commercial cases from falling within the jurisdiction of the Small Claims Tribunal, the legislator would have expressly included such exemption under sub-article (5) of the Small Claims Tribunal Act.
In conclusion, the court stated that the Small Claims Tribunal had jurisdiction to hear and determine the case brought before in on the 20th September 2017. Justice Anthony Ellul ordered the judgment of the Small Claims Tribunal to be repealed and that the case be sent back to said Tribunal for continuation of hearing.
Dr Bettina Gatt is a Trainee Advocate at GANADO Advocates