Businesses to have easier access to finance

Wide-ranging amendments to the Civil Code, which started being debated in Parliament yesterday, will mean easier access to finance by businesses since special hypothecs may also be attached to movables.

Parliamentary Secretary Carmelo Mifsud Bonnici said this Bill also introduced clauses on unjustified enrichment. It updated the threshold of funds available to widows and widowers from the community of acquests until the inheritance was distributed and introduced new provisions for the birth certificates of persons born out of wedlock not to indicate that the mother was unmarried.

It was also being provided that liquidation of the community of acquests after a marriage separation may be decided before the Arbitration Centre.

Husbands were also being given up to the end of next year to file cases to challenge paternity.

Referring to the amendments on unjustified enrichment, which are based mostly on Italian law and a 1936 local judgment in the case Said vs Testaferrata Bonnici, Dr Mifsud Bonnici said that in terms of the Bill, whoever enriched himself illegally to the detriment of others would have to reimburse and compensate the persons involved. When the actio de in rem verso may not be exercised the person who suffered the loss may take other actions to make up for the loss.

Turning to the provisions on hypothecs and special privileges on movable items, Dr Mifsud Bonnici said this was the first time that one would be able to have a special hypothec even on movables, as was the case for immovable property. This provision was being introduced in view of developments abroad, notably France and Italy.

Furthermore, there was a growing view that certain items, although movable, such as ships and yachts, cranes and other heavy construction equipment and industrial machinery costing thousands, even millions of liri, should also be subject to the concept of special hypothec.

This was felt necessary in business circles, notably for purposes of access to finance by business start-ups.

This Bill, therefore, was giving new value to items that currently lacked such value.

It was not listing the moveable items which may be subject to a special hypothec but the minister may issue and amend this list from time to time. The special hypothec would have to be registered at the Central Registry.

Turning to the amendment affecting widows and widowers, Dr Mifsud Bonnici said that when a spouse died and the assets of the community of acquests were frozen, the surviving spouse was able to make use of very limited funds to survive, often not more than Lm60 apart from funeral costs, until the community of acquests was liquidated.

This had caused hardship to many widows and widowers and their children until the inheritance was sorted out or a pension came into effect.

The law was now being amended so that the threshold of available funds would be lifted to Lm2,500 to cater for the immediate needs of the surviving spouse.

Turning to the amendments on birth certificates, Dr Mifsud Bonnici said that henceforth, a birth certificate would indicate that the parents were married, more so as more women were now continuing to use their maiden surname. When there was a birth out of wedlock, however, there would be no mention whatsoever. These provisions will apply for all certificates and not just for births from this date forward.

Furthermore, in view of the recent European Court of Human Rights judgment Maurice Mizzi vs the government underlining the right which every husband should have to prove paternity or otherwise, the Bill was providing the right to all those husbands who were in a similar predicament as Mr Mizzi to challenge paternity of children born before December 1, 1993 (thus removing time limits on paternity cases which existed to date). The deadline for such cases was being extended to December 31, 2007, Dr Mifsud Bonnici said.

The Bill was also providing that in separation cases, the liquidation of the community of acquests might be decided before the Arbitration Centre.

Dr Mifsud Bonnici said this was often the most contentious stage of separation proceedings, leading to considerable delay. It would now be possible for a court to decide on the actual separation and aspects, such as custody and access to the children as well as maintenance.

The court could then establish what the community of acquests consisted of and order that liquidation be decided before the Arbitration Centre. It was hoped that this new procedure would reduce heartache and bring about a faster solution to such cases, at lower costs. A new special tariff would be introduced at the Arbitration Centre for such cases.