This case highlights the important Civil Code provisions on sale by licitation, which is essentially a legal solution to disputes that arise between disagreeing co-owners attempting partition of their property. Plaintiff and Defendant owned an apartment together in Santa Venera, which they had purchased when they decided to get married. Although the Plaintiff had paid Lm3380 more than the Defendant in the form of a deposit, the parties owned the apartment equally. Upon the termination of their relationship, the parties no longer wished to co own the apartment, however an agreement as to the transfer of the same property could not be reached. The Plaintiff therefore requested the Court to order

• a sale by licitation of the apartment

• that the proceeds from such sale be shared equally between the parties only upon the bank being paid its dues, and the Plaintiff given the Lm3380 that she had invested in excess of the Defendant.

The Court made reference to the Civil Code (Chapter 16 – Laws of Malta), which provides a legal solution in the form of sale by licitation for situations where common property cannot be divided conveniently and without being injuriously affected and compensation cannot be made with other common property of a different nature but of equal value. This sale is ordered by the Court to all for the distributions of proceeds from such property held in common. The Law allows any of the co-owners, whatever their share of the property, to demand the sale by licitation, where competent. These principles were discussed in the judgements Grech vs G. Zammit –1969, Giovanni Bugeja vs Prof. Don P.P. Saydon (1946) and Kurunell Stephen Borg ne vs AIC Gustavo Romeo Vincenti – 1957.

According to Article 518(1) of the Civil Code,

“A sale by licitation which takes place with the consent of all the co-owners, is not subject to any formality, and may be made by means of any person and in whatsoever manner the co-owners may agree upon; but in any such case there is no sale until the highest bid has been accepted and, if the licitation is in respect of immovable property, until a contract is made by means of a public deed.”

The sale by licitation must take place in accordance with the legal principles regulating the partition of property held in common. The Court made further reference to Article 502 of the Civil Code which holds that “Each of the co-owners may claim his share of the property in kind.”

In accordance with the Code, the property must be appraised by experts chosen by the parties, or appointed by the court as provided in the Code of Organization and Civil Procedure. The experts must state in their report, whether the property can be conveniently divided without being injuriously affected, and, in case the property can be so divided, the experts must, in the same report, determine each of the portions which may be made up and the value thereof as far as it is practicable without considerable damage.

Furthermore, Article 496(1) of the Code establishes another legal principle relevant to sale by licitation. It essentially states that no person can be compelled to remain in the community of property with others, and each of the co-owners may, at any time, notwithstanding any agreement to the contrary, demand a partition, provided such partition has not been prohibited or suspended by a will.

The Court also made it clear that sale by licitiation is an exception to the rule and may be classified as an extraordinary remedy. This was held in the judgement Rita Grech et vs Giuseppe Zammit et – 1969, wherein it was stated that sale by licitation is resorted to only when property cannot be divided conveniently and without being injuriously affected, and compensation cannot be made with other common property of a different nature but of equal value.

The Court stressed the importance of examining whether the property could conveniently be divided or not. The Court made reference to a series of cases which dealt with this issue - Giuseppe Galea et vs Jessie Borg – 2003; Giuseppe Zammit vs Ludgarda Grech – 1983. These judgements essentially stated that in the event that a property could indeed be divided conveniently and without injury, then division was the only solution. Sale by licitation is an extraordinary remedy created by the legislator in the event that something co-owned is not of its nature divisible or if divisible, not so without inconvenience or injury. In Speranza Vella vs Antonio Sciberras noe (1948), it was held that such a sale may also be resorted to in the event that upon division, compensation cannot be made with other common property of a different nature but of equal value.

The Court therefore analysed the description of the property in question drawn up by a legal expert and held that it was clear that the apartment in dispute could not conveniently be divided. The expert valued the apartment at Lm59,827 which the Court accepted. The Court hence declared that the Plaintiff’s request for a sale by licitation was justified and ordered the same sale and that the Plaintiff be repaid the Lm3380 that she paid in excess.