George Sladden vs Lonza Agius

Court of Appeal

Judges: Chief Justice Vincent Degaetano; Anton Depasquale; Albert J. Magri

7 July, 2006

This case involved work carried out by the plaintiff. The defendant refused to pay the amount due (Lm747.50) to the plaintiff, claiming that the work was unsatisfactory.

The defendant claimed that she refused to pay because the work was not done well and according to expected standards and although she had requested the plaintiff to remedy the faults in the job, he had failed to do so.

First Hall, Civil Court – 27 June, 2003

This Court condemned the defendant to the payment, stipulating that it was clear that the question was about technical specifications and the level of standard of work.

The contract of work commissioned to the plaintiff by the defendant was verbal and not precise and left many details out.

The Court referred to the case Vassallo nomine v Maggi which stated that, in cases like this, the agreement between the parties regarding the nature and quality of work was given the most importance. Experience showed that disagreements arose because one or more of the parties had not entered into the terms of agreement in detail. All aspects must be verified with precision, ideally expressly, including the list of work that needs to be done, the price and the relative conditions.

Case law revealed that in these cases, if work is not completed or done well, the worker has no right to any payment if the resultant defects affect the general nature of the work (Mallia v Fonk, 1975) and the defendant would have the right in a similar situation to oppose the exception non rite adempleti contractus for the claim for payment.

This usually occurs when the work executed has substantial defects that deprive the object of the work from its use or scope in such a way that it no longer corresponds to the result proposed or indicated by the nature of the job.

In the case under examination, it did not seem that the faults could not be qualified as essential. The technical expert commented generically that the standard of work was not very good. When the faults are not defined as substantial, the worker is not deemed to be incapable of completing the work but remains obliged to either carry out repairs or agree a reduction in the cost.

The plaintiff accommodated the defendant when she demanded assistance in removing stains and dirt on the paintwork and redoing some other work.

It was the plaintiff’s obligation to assure a good finished job. If the work produced is deemed useless, the worker has no right to payment since he knew of its uselessness and that the work had not been done efficiently and in accordance with his skill and he should hence not have agreed to take on such a job and burden the assignor with the expense of the materials.

It was felt that the amount due needed to be reconsidered and reduced to Lm500, taking into consideration the faults in the work done and the work left unfinished.

Court of Appeal

The defendant felt aggrieved by the fact that she had to pay interest on a liquidated amount from the date of notice of the writ.

She did not contest the payment of the amount but she disagreed with the Court’s orders to pay interest accruing not from the date that the judgement was given, but from the day the writ of summons was issued.

Interest payable on a debt due at eight per cent per annum are the damages given to the creditor of an obligation that are suffered from the delay in the execution of the same obligation.

Reference was made to Article 1141 of the Civil Code regarding when interest starts to run:

(1) Where the obligation is of a commercial nature, or the law provides that interest is to run ipso jure, interest shall be due as from the day on which the obligation should have been performed.

(2) In any other case, interest shall be due as from the day of an intimation by a judicial act, even though a time shall have been fixed in the agreement for the performance of the obligation.

The Court said that it is a generally accepted principle that when the amount due is not liquid and certain, interest does not start to apply except from the date that the amount becomes determinate. In Mizzi v Mizzi (2004) it was stated that interest may only be computed as damages for delay in execution if the object of the obligation is the payment of a determinate sum.

In 2001, the same Court claimed that it is a general principle that interest is not due from the date of the claim when the debt is uncertain and not liquid, but from the date that the debt is liquidated, certain and due. This is a natural consequence of the fact that before the debt is liquidated, the debtor may not be said to be put in mora.

This allows for exceptions when the responsibility for payment for damages is obvious and where the lack of liquidity refers to the requested amount, and not to the acceptance of payment of such.

The Court of Appeal stated that the defendant should not be at an advantage by not paying interest from the date of notification of the writ. According to the saying “il piu` comprende il meno”, if the original amount was confirmed with interest, there was nothing obstructing the Court from awarding interest to accrue upon the reduced amount from the date of the notification of the writ in accordance with the principle stipulated in Article 1141(2).

The Court of Appeal hence confirmed the judgement of the First Hall, Civil Court.