In the case P & S Limited et. vs Zammit et., decided on February 16th 2017, the First Hall Civil Court presided over by Mr Justice Toni Abela, discussed the instances when spouses are bound to the same debt in such a way that either spouse may be compelled to discharge the whole debt, and the exception to this rule.
Spouses Zammit (defendants) purchased an immovable property from the plaintiff companies in 2005. When the defendants attempted to transfer a part of their property, they were precluded from doing so due to the existence of a special privilege in favour of the plaintiff companies. When the plaintiff companies were asked to waive this special privilege, they insisted that there was an outstanding balance comprising of accumulated interest owed by the defendants. This obstacle was resolved when the parties entered into a private writing in 2007 by means of which the defendants established themselves as debtors, owing a certain, liquidated and due debt of €23,293.73 to the plaintiff companies.
In 2013, the defendants were called upon by the plaintiff companies to settle the debt. The defendants argued that the time period in which the action could be instituted by the plaintiffs was that of 5 years, which had since expired. In order to determine whether the prescription period of the action had indeed expired, the Court primarily examined whether the spouses, as debtors, were jointly and severally liable, in other words, whether the spouses were bound to the same debt in such a way that each spouse was compelled to discharge the whole debt.
The Court determined that the defendants were married and that according to the Civil Code the assets of spouses who celebrated their marriage in Malta are automatically controlled by a matrimonial regime known as community of acquests, unless any agreement to the contrary is made by the spouses by public deed. The community of acquests includes all that is acquired by each of the spouses by the exercise of their work and all the property which any of the spouses may possess, with the exception of property acquired by either of the spouses before the marriage. The Civil Code establishes that spouses participating in the community of acquests will have any debts relative to an obligation which they entered into together, chargeable to the community of acquests. In this respect, the Court reasoned that the obligations entered into by the spouses on the private writing with the plaintiff companies, in which they established themselves as debtors of the plaintiff companies, constitutes an obligation which the spouses entered into together, and which would therefore be chargeable to the community ofm acquests.
The Court then went on to determine whether the spouses are jointly and severally liable in the payment of the debt to the plaintiff companies. In civil law, joint and several liability does not arise automatically, but must be expressly stipulated. In this regard, the Court made reference to the case Sciberras pro et v. Yousef Rhouni pro et, decided on 9th November 2005, in which case the Court held that each spouse participating in the community of acquests is joint and severally liable. Not only does joint and several liability arise from the contract itself but this also derives from a specific provision in the law. Joint and several liability is represented in three elements:
- The plurality of subjects;
- Joint and several liabilities of parties may arise even when one of the debtors is bound differently to the others for the payment of the same thing (idem debitum);
- Joint and severally liable debtors are bound to the same thing in such a way that each of them may be compelled to discharge the whole debt, and the payment made by one of them operates so as to release the others as against the creditor (eadem causa obligandi).
This leads to the conclusion that each spouse is responsible for whole debt and that the creditors may compel either one of the parties to discharge payment, unless it relates to an act of extraordinary administration which must be performed by spouses together.
In this judgement, the Court observed that under the matrimonial regime of community of acquests, the only derogation from joint and several liability of spouses is found in Article 1329 of the Civil Code. When one of the spouses incurs a debt which is not chargable on the community of acquests, (for reasons that it may have been incurred before the marriage or during the marriage, but is such that does not bind the other spouse) , and the creditors cannot satisfy their claim against the paraphernal property of the debtor spouse, it is possible for the creditors to enforce their claim against the assets forming part of the community of acquests but only to the extent of the value of the share which such spouse has in the community of acquests. This principle operates independently of the fact that the assets of the spouses are controlled by the community of acquests. The obligation assumed by one of the spouses in such an instance would be one that cannot bind the other spouse in joint and several liability. In such an event, although the debtor's spouse has a right to seek judicial separation of property, the debtor's spouse cannot oppose an act which enforces the credit against any property of the debtor or assets of the community of acquests, except when the property in question was acquired by the debtor's spouse before marriage.
Following the above considerations, the Court established that in this case there was no doubt that the spouses were jointly and severally liable by virtue of both article 1094 of the Civil Code which regulates joint and several debtors and also by virtue of the rights attached to the community of acquests in which the spouses participated. The Court then proceeded to determine whether the time period within which the action instituted by the plaintiff companies had indeed expired, and held that the defendants had not successfully managed to prove this to the satisfaction of the Court. The First Hall Civil Court therefore dismissed the arguments brought forward by the defendants.
Maria Grima
Advocate, Ganado and Associates
from The Malta Independent http://ift.tt/2F99YeZ
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