Former PriceClub directors ordered to pay €898.262.71
The First Hall of the Civil Court today ordered Wallace Fino and Chris Gauci, former directors of PriceClub Operators to pay €898.262.71 to Paolo Bonnici Ltd for merchandise sold to them.
Mr Fino and Mr Gauci pleaded that they ought not to have been sued as they had bought the merchandise on behalf of Price Club Operators Limited.
The court , however, found that Paolo Bonnici Ltd's claim was based upon a credit application form which had been signed by Mr Fino and Mr Gauci and in terms of which a current account was opened. On the basis of this account, Mr Fino and Mr Gauci could purchase merchandise from the company. Although it was true that the form stated that the merchandise was to be sold by an outlet run by Price Club Operators Ltd, this did not mean, said the court, that the contract was signed by this company. Mr Fino and Mr Gauci had not stated on the form that they were acting on behalf of Price Club Operators Limited, but had signed personally. Even if one were to argue that the form was signed on behalf of Price Club, both Mr Fino and Mr Gauci had obliged themselves on the credit application form to undertake personal liability for payment.
The court ordered the outstanding amount to be paid, with interest.
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D Vella
Nov 1st 2008, 08:15
Anthony Mifsud got the equivalent of LM80, Mintoff got over LM350000, Ninu Zammit about LM70000 for a tiny bit of land....what is really interesting however is that we suddenly have 'accountability' in Malta. Of people at the top for the goings-on of their subordinates.
Would that this case signals in a new era of accountability. How about accountability of low-lying ex- MEPA minister George Pullicino during the JPO scandal? Or Minister Austin Gatt for the current MITTS scandal?
Two days ago in the UK a BBC chief resigned at the height of her career and forfeited a huge salary over the unacceptable behaviour of two of her Radio presenters. Ministers, House Speakers etc have been known to resign over issues which in Malta would raise a yawn rather than an eyebrow. Resignations here are only called for when politically expedient or sacrificial lambs are needed as in the case of Minister John Dali and the airtickets,
which proved to be farcical. Accountability indeed!
Helga Cutajar
Oct 31st 2008, 15:43
In reply to T Mifsud, the Ltd does stand for limited liability yes therefore protecting directors and shareholders if companies go bankrupt. But company law and civil law also proctect third parties interest and in case where the directors are found not to be acting in the best interest of the company and acting irresponsibly the veil of incorporation is lifted and the directors would be liable. You can refer to the Enron case. This case will set an example and create a precedent to protect third parties interest. It also stands to prove that directors should act in the best interest of a company and even though they are directors they still have responsibilities to fulfill
David Mallia
Oct 31st 2008, 13:40
NGrima is correct, its a question who was party to the contract. However, The companies act has also sections where the directors can become personally liable. It is a common misconception that you can hide behind the corporate veil.
N Grima
Oct 31st 2008, 10:05
@ T Mifsud
Better if you read the article again! Essentially what happened was that PBL signed a contract with Fino and Gauci, not with PCOL - hence, they sue Fino and Gauci not PCOL. In fact, the contract specifically mentioned personal liability, so limited liability was clearly not applicable...
john psaila
Oct 31st 2008, 07:59
at last all citizens are treated equally
James Portelli
Oct 30th 2008, 23:23
Did you mean €898,262.71 ? That figure looks more like an IP number than Euro currency ;)
T Mifsud
Oct 30th 2008, 21:42
Ouch!
Excuse my ignorance in Company Law, doesn't the Ltd after the company name mean that the debtors can only take assets owned by the company only? The director's personal account is not part of the company accounts. Anyone of the know?