In the case Arken Limited et vs. Easysell Properties Limited et, decided by Hon. Joseph Zammit McKeon on the 27th September 2018 presiding in the First Hall Civil Court, the plaintiffs asked the court to rescind part of the contract of sale of a land due to the fact that part of the land sold was already sold to third parties.
In 1981, the defendants sold the land to one of the plaintiffs, who subsequently sold the land he bought to the plaintiff company in 1985. When the company began works to develop the land they purchased, third parties filed an injunction against them to stop works and reverse any changes made on the basis of a contract of sale in 1980. It transpired that the third party purchased land from the defendants in 1980 and a portion of that land was subsequently also sold to the plaintiff and sold again to the plaintiff company. The plaintiff company was evicted from the part of the property which was previously sold to third parties, and therefore the co-plaintiffs instituted proceedings against the defendants for compensation on account of the defendant’s failure to provide a warranty of peaceful possession of the property which the seller is legally obliged to provide.
In terms of Article 1413 of the Civil Code, if a buyer is evicted, he is entitled to claim, inter alia, a return of the price, judicial costs and other lawful expenses incurred with the connection of the sale. In their sworn reply, the defendants raised the plea of prescription found in Article 2143 of the Civil Code, which states that all actions are barred by the lapse of thirty years.
The Court, however, was not asked to determine the outcome of the case since the parties entered into a contract to settle the dispute between them, subject to the approval of the settlement by the Court.
The parties to the lawsuit availed themselves of Article 1718 of the Civil Code which states that parties may enter into a contract of compromise to put an end to a lawsuit which has commenced. By means of a private writing which explained the above facts, the parties agreed that, should the court accept, they will enter into a public deed to rescind the sale which relates to the portion of land from which the plaintiff company was evicted, however the parties agreed that the sale of the rest of the land (i.e. the parts which did not form the subject of the dispute and which the plaintiff company were not evicted from) will be ratified in the contract of rescission. The parties also agreed to the amount of compensation which will be given by the defendant company to the plaintiff company.
Therefore the legal considerations related to whether the Court would uphold the agreement in the above mentioned private writing. The Court did in fact agree to the approach taken in the private writing and ordered that the parties enter into a public deed for the rescission of the sale of a part of the plaintiff’s property, he defendant company pays the plaintiff company the agreed sum in consideration of the rescission and that the defendant company pays for all legal expenses and any expenses related to the public deed for the rescission of the contract of sale.
Dr Elise Dingli is an advocate at Ganado Advocates