The Civil Code stipulates that prescription may be interrupted not only by explicit measures, but also tacitly, by means of any act which implies an acknowledgment of a contested debt on the debtor’s part. In Emmanuel Vella and Maria Dolores Vella Crocker vs Adelina Sacco and Connie Abdilla, a judgment delivered by the Court of Appeal on 27 October, 2017, the Court examined what could be construed as being tantamount to a tacit acknowledgment of a debt for the purpose of interrupting prescription.
Plaintiffs instituted proceedings against Sacco and Abdilla, as lessees of a tenement owed by them, demanding the repayment of a sum of €41,728 which sum was owed to Maltacom on account of telephone bills having been accrued by the lessors. Plaintiffs had been forced to settle all outstanding bills following judgment instituted by Maltacom for the payment of all sums owing to it by the owners of the tenement in the question, and were therefore seeking repayment of the sums from defendants, as the occupants of the premises. The defendants, Sacco and Abdilla, in turn argued that plaintiffs’ claim had been prescribed by the lapse of five years pursuant to Article 2156(f) of the Civil Code (Chapter 16 of the Laws of Malta), which, in its relevant parts, reads:
The following actions are barred by the lapse five years:
...omissis...
(f) actions for the payment of any other debt arising from
commercial transactions or other causes, unless such
debt is, under this or any other law, barred by the lapse
of a shorter period or unless it results from a public
deed.”
Plaintiffs rebutted by arguing that the claim could not be barred by prescription given that the defendant had executed a private writing admitting to owing the debt.
The Court of First Instance delivered judgment in favour of plaintiffs, noting that the provisions of article 2156(f) were subject to restrictive interpretation given the exceptional nature of the plea of prescription. The debt, it was held, had been acknowledged by the private writing and by defendant’s partial repayment thereof: reference was here made to the Commercial Court judgment in the name Sammut vs Vella (decided 31st May, 1995), whereby it was held that all payments made on account of a debt were tantamount to an acknowledgment thereof. The defendant’s plea could therefore not be upheld.
The defendant filed an appeal, arguing inter alia that she had not recognised the debt and that in any case, and without prejudice, enough time had lapsed from the date of her last repayment that the debt had been extinguished by prescription. Sacco further held that the sum owed also covered the telephone bill of two adjacent residences, that she had not entered into a repayment program with Maltacom and that all payments made by her on account of the debt had been made under protest.
The Court of appeal noted at the outset that the application of Article 2156(f) was not disputed by either of the parties, and that it was indeed clear that payments due on account of fixed line, telephone services were subject to a five year prescriptive period pursuant to that same article of the Civil Code. What was under dispute, therefore, was whether the defendant’s actions could be interpreted as having stopped the running of prescription in her favour. This matter had to be examined with reference to the general principles governing this institute and enunciated in Articles 2109 et seq of the Civil Code. The law in this respect stipulates that prescription may be renounced either expressly or tacitly, with the latter being inferred from any fact which implies abandonment of such right. It follows, therefore, that prescription may be interrupted if the debtor, in any way, acknowledges that the third party against whom prescription has started to lapse, is owed repayment by the debtor.
To this end, the Court of Appeal referred to the judgment in the names of Joseph Cassar nomine et vs Sunny Muscat et delivered by the First Hall wherein the requisites needed for the interruption of prescription were set out, namely: (i) deliberateness to acknowledge the debt; (ii) knowledge of the debt’s existence; (iii) the unequivocal nature of the acknowledgement; and lastly, (iv) the externalisation of such acknowledgment either by express means or by virtue of any other circumstances from which admission can be implied, such as, for example, a promise made by the debtor to effect repayment of the debt, a request for its reduction or even some form of entry reflecting the debt made in a set of accounts (in respect of this latter point see Austin Psaila vs Lother Slabick, Court of Appeal). In other words, the existence of some form of unequivocal acknowledgment of a debt on the part of the debtor will mean that the prescriptive period commences to run afresh.
The Court turned to examine the facts at hand. With respect to the defendant’s argument that all payments had been made under protest, the Court noted that what was being challenged at the time, was not the defendant’s liability to pay such debts, but the quantum of the debt itself and that therefore the existence of the debt was not under challenge. To this end, the Court quoted a judgment in the names Mary Rose Tabone nee Stellini vs Silvio Vassallo pro et noe, whereby it was held that where a debtor does not contest the debt per se, but merely contests the amount due, the debtor would still be acknowledging the existence of the debt and that by effecting payments, albeit in protest, would still be interrupting any prescription lapsed in his favour.
The Court ultimately determined that the defendant had stopped the running of prescription in her favour both by signing a private writing by virtue of which she assumed “complete responsibility” for the debt and by effecting partial repayment thereof. Both these actions could be construed as being an unequivocal and absolute assumption of the debt in question. That being said, the Court continued by stating that neither the admission nor any subsequent repayments had the effect of altogether barring the running of prescription in the defendant’s favour; such acts could not be deemed to have bound the defendant to make good for the debt for life but rather each acknowledgement, whether tacit or otherwise, merely had the effect of re-setting the point in time at which prescription would be deemed to have started lapsing again. It was thereby still possible for the defendant to claim prescription provided that five years had lapsed from the date of her final acknowledgement.
On a final point, the Court disagreed with the plaintiffs that the institution of proceedings by Malatcom against both platiniffs and the defendants for the recovery of sums owed to it, had the effect of stopping the lapse of prescription in plaintiffs’ favour, given that the proceedings had not been instituted by the plaintiffs themselves. Thus, regardless of the fact that the defendant had been validly served with the proceedings, Sacco had only been called upon to answer for claims brought about by Maltacom specifically and not with respect to the debt forming the subject of these proceedings, which, although connected, was not one and the same.
Following an examination of the facts at hand, it eventually transpired that the contested debt had been last acknowledged by Sacco more than five years prior to the commencement of the proceedings for its recovery and that therefore notwithstanding the defendant’s acknowledgment of the debt, plaintiffs’ claim has been barred by the lapse of prescription.
Dr Vanessa Gatt is an Advocate at Ganado Advocates