This was an appeal to a judgement delivered by the Court of Magistrates (Gozo) in its Inferior Jurisdiction on 22 June, 2007. The case concerned a plea for payment in relation to brokerage fees regarding the acquisition and sale of a plot of land located in Nadur, Gozo. The plaintiffs who acted as brokers (sensara) requested such fees at a rate of one per cent of the price of acquisition and the price of sale of the property. They requested that the defendants be condemned to pay Lm2,100 in their favour.

The defendants pleaded that:

• They were improperly sued because they claimed never to have bought the disputed plot of land;

• In any case, the demanded sum was excessive;

• The plaintiffs were already paid their dues.

The Court analysed the facts of the case which were as follows:

On 31 August, 2002, a promise of sale agreement was signed in relation to a house and plot of land to be eventually sold at Lm205,000. The vendor was a certain Teddy Sacco. According to the plaintiffs, the buyers were the defendant spouses. However, the defendants held that the defendant Joseph Spiteri had appeared on behalf of the company MPJ Limited. The plaintiffs held that it was agreed that they should have been paid one per cent of the sale price. The defendant confirmed this.

However, the final sale never occurred in that the purchasers agreed to forfeit their purchasing rights derived from the promise of sale in favour of a certain Emanuel Attard, for which agreement the plaintiffs were present. Eventually, the house was not purchased due to problems in the attainment of MEPA permits. Furthermore, Emanuel Attard assigned his right to purchase the plot in favour of a third party. On the day of the signing of the final contract between Teddy Sacco (the vendor) and the third party purchaser, there were present the plaintiffs as well as the defendant Joseph Spiteri who was allegedly present on behalf of MPJ Limited to collect money that he had originally paid to the vendor. The defendant had also collected a payment on the day of assignment of the right of purchase

The defendants’ arguments tended to change during the course of proceedings in the sense that they started off by saying that no payment was due by them in that they never personally agreed with the plaintiffs on commission fees. They held that they always acted on behalf of MPJ Limited. The plaintiffs on the other hand held that the defendants acted personally.

Reference was made to a series of cases decided by Maltese Courts. The Court was not convinced that when the defendants dealt with the plaintiffs, the latter were informed unequivocally that the defendants were acting on behalf of the company and that they were not appearing on the contract personally.

The Court acknowledged that it is a known fact that sensara such as the plaintiffs do not enter into intricacies in transactions of this kind. They simply seek to bring together parties to effect a sale. The Court therefore concluded that the relationship was directly between the Plaintiffs and Defendants.

The Plaintiffs confirmed that they were not involved in the assignment of rights between Emanuel Attard and the third party. The Plaintiffs expected to be paid Lm2,200 since the price of the plot on the promise of sale was Lm100,000 while upon assignment, the plot was priced at Lm110,000. They expected to be paid one per cent of both these sums.

The Court was not convinced that there was any agreement between the parties in relation to the second transaction in that it did not seem to be the case that the defendants bound themselves to pay commission to the plaintiffs because someone chose to buy the rights of purchase from the defendants. However, it resulted that the plaintiffs took an active role in the signing of the promise of sale and in the finding of Emanuel Attard who eventually was assigned the right to appear on the final contract of sale.

The Court held that according to Italian caselaw, the right to a commission in this case still holds also when the final contract is drawn up in favour of a person different to the person who originally appeared.

Local caselaw has taken different positions in this regard. Some judgements have held that an agreement of this kind is concluded not only upon the publication of the final contract. Furthermore, the Courts have also held that sensara have a right to a commission only when the sale is effected i.e. upon the publication of the relevant contract. Should the final contract not be reached, compensation should be paid instead of commission. This commission is based on Article 1362 of the Civil Code (Chapter 16 – Laws of Malta), which states:

1362. In the absence of an agreement, brokerage shall be Brokerage. regulated at the rate of one per centum in the case of sale of movables, and two per centum in the case of sale of immovables.

Furthermore, Article 1363 states that:

1363. (1) The sale of immovable property shall be null if not made by a public deed.

It resulted that in this case the sale effectively did take place, although in favour of a third party. The Court felt that it would be unjust should the Plaintiffs be deprived of their commission. The plaintiffs had entered into an agreement with Spiteri and hence, it was only just that he pay the commission. The fact that the plaintiffs received payment from Emanuel Attard did not extinguish their right to request and receive commission from the defendants.

The Court agreed to the payment of Lm1,000 as commission on the Lm100,000 as the price established in the promise of sale agreement. Regarding the assignment of rights, the Court held that one could not talk of commission but compensation. The Court considered Lm100 as adequate compensation since the profit made by the defendants on the assignment of rights to Emmanuel Attard (who was found by the Plaintiffs) was Lm10,000. Although the defendants were therefore excluded from the sale, they benefited from a service by the Plaintiffs for which they were obliged to pay Lm1,100 compensation, which amount was liquidated by the Court.

On Appeal, the Court of Appeal considered all the relevant evidence and upheld the judgement of the Hall of First Instance rejecting the appeal.