Dr Bettina Gatt
The First Hall Civil Court, presided over by Judge Joseph Zammit Mc Keon on July 12th 2018, in the case “Zerafa Elizabeth et (the “Plaintiffs) vs. L-Avukat Dr. Leontine Calleja et noe (the “Defendants)” dealt with the sale of property through the appointment of curators, more specifically, those instances in which co-owners holding a minority share cannot be identified, hence consequently hindering the transfer of the co-owned property.
In the case in question, the Plaintiffs, being the majority holders, are requesting the court to effect and allow the aforesaid sale, reason being that one or more of the co owners, on aggregate holding a minority share of the co-owned property, have been and remain unidentified.
The case concerned properties number 67, 95 and 83 situated in Triq il-Kapuccini Floriana, which are co-owned by the Plaintiffs and other persons no longer residing in Malta, and thus not known to the Plaintiffs. The former are owners of 4/7ths of the property, whereas the latter own the remaining 3/7ths. Through this case, the Plaintiffs are claiming that they have co-owned the property for a period exceeding three years, and that throughout such co-ownership there has been no agreement between all the co-owners as to how to divide the property between them. For this reason the Plaintiffs are asking the court to appoint curators to appear on behalf of the unidentified persons and thus proceed with effecting the sale of the said properties.
The Plaintiffs based their argument on Article 495A of the Civil Code (Chapter 16 of the Laws of Malta) which states that:
“ (1) Except in cases of condominium or necessary community of property, where co-ownership has lasted for more than three years and none of the owners has instituted an action before a court or other tribunal for the partition of the property held in common, and the co-owners fail to agree with regard to the sale of any particular property, the court shall if it is satisfied that none of the dissident co-owners are seriously prejudiced thereby, authorise the sale in accordance with the wish of the majority of co-owners regard being had to the value of the shares held by each co-owner.”
An amendment brought about through the introduction of Act XIV.2016.3, has now reduced the 10 year period of co-ownership which was required to effect a sale under Article 495A. As of 1st April 2016, action can be instituted under such article if property has been held in common for a period of more than 3 years, and provided that during such period no action has been taken and no agreement has been reached with regards the division of the said property.
The court scrutinized the above quoted article and examined it in light of the present case. Firstly, Judge Zammit Mc Keon went on to say that the purpose of this article was to accommodate the majority holder in those situations whereby co-owners fail to agree in respect of the sale of a thing held in common. More so, Article 495A should in no way be seen as a method to circumvent the consent of all owners to effect a sale. The aforementioned article is predominately aimed at mitigating those instances in which the majority holder is being capriciously prejudiced from selling their property or in those cases when one or more co-owners, for one reason or another can no longer be identified.
Secondly, the court made reference to the judgments Aloysius Farrugia et vs Dr Josette Sultana et noe, and David Abela noe vs. Dr. Simon Micallef Stafrace noe, which concluded that although through Article 495A of the Civil Code, the legislator sought to introduce a system with which co-owners can terminate their co-ownership in a simplistic manner, this method should only be resorted to in those situations whereby such termination would not prejudice the opposing minority co-owners. Likewise, in the latter case the court concluded and re confirmed that a transfer done in accordance with Article 495A is a form of ‘forced’ transfer used only in those instances whereby for one reason or another the minority holder cannot or does not want to go through with the sale.
Important to note however is that in order for a sale to be effected under Article 495A, the court must be satisfied that none of the owners will be prejudiced as a result of the transfer. In order to ensure that this is done, our Civil Code introduced Article 495(A)(6) which states the following:
(6) In assessing whether there will be serious prejudice to any of the co-owners, the court shall take into consideration all relevant factors including the value of the property and the price of the sale, and may for this purpose order that the property be appraised”
In conclusion, taking all of the above into consideration, the court agreed and confirmed that no party will be prejudiced through the sale of the property in question. Judge Zammit Mc Keon therefore decided in favour of the Plaintiff’s, and approved the sale of the co-owned property. Curators where appointed to represent and act on behalf of the unknown persons.
Dr Bettina Gatt is a Trainee Advocate at GANADO Advocates