The Court of Magistrates (Gozo) (Superior Jurisdiction), presided over by Magistrate Dr Josette Demicoli, on March 28, 2014, in the case ‘Erika Gertrud Selma Menestret v Dr Georgine Schembri on behalf of Brigitte Simsch’ held, among other things, that it was not legally prohibited for one party to act as prestanome of the other in 1988, despite governmental policy at the time not to grant permits to same-sex couples.
The facts in this case were as follows.
Erika Menestret had an intimate relationship with Brigitte Simsch. In 1988 the parties, both German nationals, decided to reside in Gozo.
As the purchase of immovable property by foreigners including EU nationals demanded the acquisition of an immovable property permit, it was not possible in 1988 for a same-sex couple to acquire a property jointly in Malta. Government policy at the time did not allow the issue of an acquisition of immovable property permit to two persons of the same sex.
Further, as Menestret was still legally married, she did not want her husband to acquire rights over the property by way of the community of acquests regime in Malta.
In view of these considerations, they decided that the Gozo property be acquired in the name of Simsch, formally, though effectively the intention was that they were to be both co-owners of the property in equal and undivided shares between them.
Simsch acted as prestanome of Menestret for the half undivided share of the property at No. 2, Tower Street, San Lawrenz, Gozo. The contract of sale was published on January 29, 1988. In fact, after the contract, Simsch made a will, nominating Menestret as her universal heir.
After some years, however, their relationship broke down and, without Menestret’s knowledge, Simsch concluded a promise of sale with third parties for the sale of the house in an attempt to allegedly defraud her of her rights. When Menestret discovered this, she filed a warrant of prohibitory injunction against her ex-partner to prevent the final contract of sale. The decree was issued on February 23, 2010.
Faced with this situation, Menestret filed legal proceedings whereby she requested the Courts in Gozo to:
• declare that the property in San Lawrenz was acquired by Simsch as her prestanome insofar as the half undivided share of the property;
• order her to transfer the one-half undivided share of the property;
• appoint a notary to publish the contract so that the one-half undivided share be transferred to her and to establish the date, time and place for the publication of the deed;
• declare the movable objects, including furniture and other items situated in the house, were partly her sole property and partly co-owned jointly by the parties, since she had contributed to purchase such items; and
• authorise Menestret to recover all movable items situated in the house which belonged to her.
Simsch, in reply, denied acting as prestanome of Menestret in the contract dated July 29, 1988. She claimed that Menestret had advanced loans to her to enable her to purchase the property. It was stated that the money loaned to her was repaid.
In addition, Simsch said that, by this legal action, her ex-partner was attempting to enforce an obligation which was based on an illicit cause.
The court noted that in 1988 the government policy was that persons of the same sex and who were foreigners were not given an AIP permit to purchase property in Malta. There was, however, nothing in the law which prohibited it as such.
The relationship of the parties came to an end in 2007.
The court said that ‘mandatory prestanome’ was accepted in our legal system. When property was acquired in the name of a mandatory prestanome, this was done in the name and interest of the mandatory, even if not done in writing.
Reference was made to ‘Maria Calleja noe v Paolo Deguara’ (Vol.34 pt2 p.430) and to ‘Professor Anthony Mamo noe v Charles Sant Fournier’, where it was held that a person who acquired a prestanome was only a mandatory. A prestanome agreement was binding between the parties and effectively the property belonged to the mandator.
In this case, the court was satisfied that Menestret proved that Simsch was acting as her prestanome for one-half undivided share of the property. The court noted that the parties lived together as a couple and they decided together to buy a house in Gozo. The understanding was that Simsch would acquire the property in Gozo in her own name. They refurbished the house together.
The court found Menestret’s version to be more credible in the circumstances. It was unlikely that Simsch would nominate Menestret as her universal heir simply because she lent her money.
Illicit cause: In ‘Andrews et v Borg, dated October 31, 2003’ (PA), it was held that, according to case law, an obligation with illicit cause had no effect. A cause was illicit when it was prohibited by law, public order or public interest. A court could raise ex officio that the cause was illicit. According to article 1857 of chapter 16, mandate had to have a licit purpose. It was not possible to use the institute of mandate to circumvent fiscal obligations.
Foreigners who were interested in purchasing property in Malta were advised that one of them could file an application for a permit and the property could be bought by the applicant on the issue of the permit. The two parties could enter into a private agreement stipulating that the other party had an interest in the property
Reference was made to the Court of Appeal decision in ‘Lucchesi et v Sultana et’ dated December 3, 2004. In the latter case the mandate of claimant in favour of her daughter was affected by an illicit cause.
According to article 987 of chapter 16, an obligation without cause or illicit cause had no effect and therefore the court could not order defendant to execute the mandate in order to transfer the tenement to the claimant. A person could not base a lawsuit on an immoral/illegal act.
In the circumstances, the appointment of prestanome was not unlawful. Foreigners who were interested in purchasing property in Malta were advised that one of them could file an application for a permit and the property could be bought by the applicant on the issue of the permit.
The two parties could enter into a private agreement stipulating that the other party had an interest in the property.
The court said that the agreement between the parties was not intended to by-pass any law. It considered that Menestret listed all the movable items in the house.
She listed items which belonged to both parties as well as the items which belonged solely to her. The list was not contested by Simsch, pointed out the court.
The court reserved the right in favour of Simsch to recover the amount already paid to Menestret or, if the property was ever sold, the amount which had already been paid to Menestret was to be deducted from her share of the selling price.
For these reasons, on March 28, 2014, the Gozo Court of Magistrates (Superior Jurisdiction) gave judgment, accepting Menestret’s requests. It declared that the San Lawrenz property was acquired by Simsch as a mandatory prestanome on behalf of Menestret and this insofar as one-half undivided share of the property was concerned.
The court ordered Simsch to transfer to Menestret one-half undivided share of the property, and appointed a notary to publish the relative contract, so that one-half undivided share of the property be transferred to her on May 16, 2014, at the Gozo Courts.
A curator was appointed to represent any person who would not appear on the appointed day for the publication of the contract.
The court declared that the movable objects, including furniture and other items in the house, were partly the sale property of Menestret and partly co-owned jointly by the parties.
It finally authorised Menestret to recover all movable items in the house which were her sole property within two months.
Dr Karl Grech Orr is a partner at Ganado Advocates.