Basic as it may seem, the notification process is of fundamental importance when instituting a Court case. This process can at times be used to attack the validity of a judgement and hence, one will certainly understand the importance of getting it right. All this featured in a Court of Appeal judgement, delivered on the 4th of May 2022 in the names Farrugia nomine vs BNF Bank plc (App. Civ. 410/19/1).
The case concerned a Bank customer, who defaulted in the repayment of her loan facilities. As a result, the Bank called in the facilities and initiated legal proceedings to recover the amount owed to it. In accordance with established procedures, the Bank started by verifying whether the Maltese address provided by the customer upon granting the facilities was still valid. As per accepted practice, recognised also by our Courts, the address is considered valid if at the moment of initiating proceedings, it is the same as the one included in the most recent electoral register.
In this case the address was still the same and the Bank issued a judicial letter demanding payment. Nevertheless, notification kept coming in the negative and the Bank was authorised to affect notification by publication in terms of art. 187(3) of the Code of Organisation and Civil Procedure (Cap. 12 of the Laws of Malta). This chiefly consists in appending copies of the Act to the front-door of the known residence of the recipient and the notice-boards of the police-station and the local council in the locality where that residence is found. This notification process is completed upon the publication of a summary of the Act in the Government Gazette and a local newspaper.
Notwithstanding the judicial letter, the debt remained unpaid and the Bank instituted a case before the First Hall of the Civil Court. Once more, notification kept coming in the negative and plaintiff had to resort to notification by publication as in the case of the judicial letter. Defendant did not reply and as a result, she was declared contumacious. After hearing plaintiff’s evidence, the Court delivered judgement and awarded a title to the Bank on the whole debt claimed.
Some time after, the Bank initiated a judicial sale by Court auction, in order to liquidate property given by the debtor as security upon the granting of the facilities and hence, get paid from the proceeds of the sale thereof . Notifications started coming in the negative again, but this time the Court officer attempting the notification, was informed by someone at the debtor’s address, that the debtor resides abroad and has been doing so for a long time. This was the first time that the Bank was alerted of the possibility that the debtor might not be residing in Malta. Consequently and as per established procedures, the Bank demanded the appointment of curators to represent the debtor.
Hardly had this demand been made that the debtor instituted a retrial case against the Bank before the First Hall of the Civil Court. The debtor argued that notification in the case awarding a title to the Bank on the amount claimed, ought not to be made by publication, because such procedure can only be applied when the defendant is residing in Malta, whereas here, the defendant was residing abroad and therefore, curators had to be appointed. According to the debtor, the title awarded to the Bank was invalid and she was entitled to a fresh hearing of the case.
The Bank replied and opposed the debtor’s arguments. Mainly, the Bank argued that upon taking out the facilities, the debtor had declared on the agreement that she resides in Malta and only provided a Maltese address. Moreover, throughout the years, also when the Parties met to discuss a repayment programme, the debtor never informed the Bank that she went to live abroad, even though she was contractually bound to do this. Finally, all the evidence filed in Court, including extracts from the electoral register, showed that the debtor had resided in Malta ever since the granting of facilities. As a result, the First Hall of the Civil Court rejected the debtor’s retrial case. Debtor later appealed but the Court of Appeal confirmed the first instance judgement and hence also confirmed the title that the Bank was awarded on the amount owed to it by the said debtor.
At the end therefore, the lesson to be learnt over here is two-fold. On the one hand, he who institutes legal proceedings must properly examine the facts in hand in order to understand where the residence of the counterparty is and to apply the right notification method. On the other, it makes sense for an obligee, even where he is not legally bound to, to keep informed the obligor of his whereabouts, in order not to risk facing Court decisions where he could not defend himself.