Collective action is valid when evidence is similar
The First Hall of the Civil Court, presided over by Mr Justice Joseph R. Micallef, on June 20, 2012, in the case “Joseph Micallef and his wife Mary Anne Micallef and Ulla Elisabeth Florell vs Trusted Ltd and Ħal Mann Investments Ltd”, held, among other things, that a collective legal action could be made on one of the grounds mentioned under Article 161 (3) of Chapter 12; and this insofar as the evidence to be produced for both actions would be substantially the same. If the requisites under Article 161 (3) were not satisfied, the lawsuit would be a nullity.
The facts in this case were as follows:
On December 20, 2007, Joseph and Mary Ann Micallef purchased a penthouse in Marsascala and a garage in the semi basement level from the companies Trusted Ltd and Ħal Mann Investments.
Subsequently, Ulla Elisabeth Florell acquired the adjacent penthouse and garage in the same block of apartments from the defendant companies.
The defendant companies had originally constructed and developed the apartment block.
It resulted that, after some time, cracks appeared on the outer walls of the apartment block. The defendant companies carried out repairs to reduce the damage but did not eliminate altogether the problem of rainwater.
Mr and Mrs Micallef and Ms Florell, at their own expense, laid membrane waterproofing on the outer wall. Additional cracks, however, appeared.
On August 24, 2010, they filed together a judicial protest against defendant companies demanding reimbursement for the damages and for the repairs which still had to be effected.
On January 30, 2012, Mr and Mrs Micallef and Ms Florell, together proceeded to file a lawsuit against defendant companies, Trusted Ltd and Ħal Mann Investments, whereby they requested the First Hall of the Civil Court to hold them jointly liable for the damages suffered to their respective apartments.
Article 161 (3) of Chapter 12 provides: “Two or more plaintiffs may bring their action by one writ of summons or by one application as the case may be, if the actions are connected in respect of the subject matter thereof or if the decision of one of the actions might affect the decision of the other action or actions and the evidence in support of one action is generally the same to be produced in the other action or actions. The cause and subject matter of the actions shall be clearly and specifically stated in respect of each plaintiff”.
They claimed that the damage was caused by the seepage of rainwater through cracks in the outer walls of their property owing to poor construction, for which defendant companies should be held responsible. They asked the court to liquidate the damages with the support of technical experts, to liquidate the sum payable to Mr and Mrs Micallef and that payable to Ms Florell; and to condemn them to pay such amounts.
The defendant companies, in reply, challenged the legality of the legal action against them. It was stated that the requisites for a collective action under Article 161 (3) of Chapter 12 were lacking and that two separate lawsuits should have been presented in the circumstances.
Defendant companies also raised the plea of two-year prescription in terms of Article 2153 of the Civil Code. They argued that, as buyers, Mr and Mrs Micallef and Ms Florell should have filed an actio aetimatoria (action to reduce the purchase price) instead of an action for damages, which in any event was time-barred in terms of Article 1431 of the Civil Code.
Defendant companies also contested the merits of the case as they claimed there was no basis for damages.
The First Hall of the Civil Court limited its focus to defendant companies’ first preliminary plea as to whether this “collective” legal action was legally valid.
There was no doubt that this plea referred to the fact that Mr and Mrs Micallef and Ms Florell filed one combined lawsuit.
The court noted that, under Article 161 (3), to file a collective lawsuit it was necessary:
• that the actions had to be connected in respect of the subject matter; or
• that a decision on one action would affect the outcome of the other; and
• that the evidence in support of one action was generally the same to be produced in the other action.
If these requirements were not satisfied, the legal action was null and void.
For the purposes of Article 161 (3), it was not necessary that the plaintiffs would have the same legal interest. A collective legal action could be made on any one of the grounds mentioned under Article 161 (3) and this insofar as the evidence to be produced would be substantially the same.
If, however, the collective legal action lacked one of the requisites under Article 161 (3), the lawsuit was a nullity.
The court was of the opinion that this lawsuit was legally valid. The legal action was based on one cause, for damages. The fact alone that Mr and Mrs Micallef and Ms Florell acquired their property separately, by virtue of two different contracts and at different times, did not alter the position. Their claims were based on the same cause and brought about by the same acts of defendant companies. Both Mr and Mrs Micallef and Ms Florell alleged suffering damages for the same reasons.
Their legal actions were connected as regards subject matter. A decision of Mr and Mrs Micallef’s case would affect the outcome of Ms Florell’s case. Besides, the evidence for both actions would be similar, noted the court.
The court also considered that, prior to the presentation of this lawsuit, defendant companies dealt with Mr and Mrs Micallef and Ms Florell together with the aim of reaching an amicable solution and with a view to carry out repairs for the benefit of both.
When a collective lawsuit was filed, at least one of the plaintiffs should confirm on oath the declaration and state clearly the object of the suit and what facts were known personally to him. In this case, the court said that both claimants made a sworn declaration.
The court maintained further that the fact that the claimants in this case filed one collective action did not prejudice defendant companies in the preparation of their defence. The nullity of a judicial act was an extreme sanction, to be resorted in exceptional circumstances when the only remedy available for a defendant was the revocation of the judicial act as stated in the proviso to Article 789 (1) of Chapter 12.
It did not result that the defendant companies would suffer any hardship in the way this lawsuit was filed.
For these reasons, on June 20, 2012, the First Hall of the Civil Court gave judgment by declaring the lawsuit filed by Mr and Mrs Micallef and Ms Florell to be in accordance with Article 161 (3).
It revoked defendant companies’ preliminary plea and ordered that the case be continued by the hearing of evidence.
Dr Grech Orr is a partner at Ganado & Associates.