The First Hall of the Civil Court, presided over by Mr Justice Anthony Ellul, on May 30, 2013, in the case ‘Catherine Vella vs Albert Vella and by decree of March 30, 2012, the company Michael Attard Ltd was authorised to intervene in the case’ held, among other things, that the assets of the community of acquests were burdened by debts undertaken by one spouse, as a “normal act of management of a business”, even if such act was performed without the consent of the other spouse. The court was of the opinion that the purchase of 25 cars by her husband was a normal act of trade, (article 1324 of the Civil Code) and could be performed by her husband without his wife’s consent.

The facts in this case were as follows.

The court was morally convinced that she was aware that her estranged husband started a car rental business

Catherine Vella filed legal proceedings against her estranged husband Albert Vella requesting the court to declare that he was solely responsible for debts which he ran up with the company Michael Attard Ltd (€124,068).

The parties were in the process of separation proceedings. After she left the matrimonial home, which was purchased during their marriage in 2003/2004, the defendant decided to start a business of car rentals. He purchased 25 cars from Michael Attard Ltd on credit terms.

The applicant claimed that the defendant acted in breach of article 1322 (2) (3g) of the Civil Code, for carrying out an extraordinary act of administration without her consent. This section provides:

(2) The right to exercise acts of extraordinary administration, and the right to sue or be sued in respect of such acts or to enter into any compromise in respect of any act whatsoever, shall vest in the two spouses jointly.

(3) Acts of extraordinary administration are the following:

(g) the acquisition of movable property or of any right of use or enjoyment over movable or immovable property, the consideration for which is not paid on, or prior to, delivery: provided that this shall not apply to any debt incurred for the needs of the family in terms of article 1327 (c), or to the hiring of moveables or immoveables when the consideration therefore is moderate in relation to the condition of the family and the duration of the lease is for a short period.

She said that she had not consented to these debts, and that the car company’s claims should be limited to the paraphernal assets of her estranged husband in terms of article 1329 of the Civil Code: article 1329 (1) provides that: subject to the following provisions of this article, the creditors of a spouse for debts which are not chargeable to the community of acquests whether such debt has arisen before or after the marriage, may, when such creditors cannot satisfy their claim against the paraphernal property of such spouse, enforce their claim in subsidium against the assets forming part of the community of acquests but only to the extent of the value of the share which such spouse has in the community of acquests.

It resulted that after Michael Attard Ltd obtained a favourable judgement against her estranged husband, it applied for the sale by court auction of their matrimonial home.

Under article 1324 of the Civil Code: “Normal acts of management of a trade, business or profession being exercised by one of the spouses, shall vest only in the spouse actually exercising such trade, business or profession even where those acts, had they not been made in relation to that trade, business or profession, would have constituted extraordinary administration.”

Article 1327 listed the debts which burdened the community of acquests. The applicant put forward the argument that she was not liable for the debts of the defendant, which he allegedly contracted, without her knowledge.

On March 5, 2010, she obtained a warrant of prohibitory injunction against her estranged husband to prevent him from transferring the cars which he acquired from Michael Attard Ltd in order to safeguard her share of the community of acquests.

The court noted that the community of acquests between the parties had not yet been dissolved. This meant that the cars formed part of the community of acquests re: article 1320 of the Civil Code. A married person who carried out an act of trade did not need the consent of the other spouse, under article 1324 of the Civil Code. It appeared that the commencement of business was not an extraordinary act of administration. Article 1324 of the Civil Code did not define the phrase ‘normal acts of trade’, though it was evident that certain extraordinary acts of administration could qualify as such.

The court pointed out that the man carried out an ordinary act of trade, by acquiring the cars on credit terms. It was possible for a trader not to carry out his business properly. He could take bad decisions or could borrow more then he could repay. The purchase of the cars was a normal act of trade.

The court maintained that it had to consider whether the act itself was a normal act of trade and not how the business was carried out.

A normal act of trade was binding on the community of acquests, as opposed to an extraordinary act of administration, which was performed by one spouse under article 1324 of the Civil Code. Reference was made to article 1330 of the Civil Code which provides: when the assets of the community of acquests are insufficient to satisfy the debts which burthen it, the creditors of such community may enforce their claim in subsidium against the paraphernal property of the spouses, provided that where:

• the debt is due as a civil remedy in respect of a wilful offence committed by either spouse; or

• the debt is one arising out of the exercise of a trade, business or profession as is referred to in article 1324;

the creditors may not enforce their claim against the paraphernal property of the spouse who has not given rise to the claim, but may in such cases enforce their claim to the extent of any part remaining unsatisfied by the assets of the community of acquests, against the paraphernal property of the spouse giving right to such claim.

The applicant claimed that the debt contracted by her estranged husband was not one of the debts which was listed in article 1327 of the Civil Code.

The court, however, did not agree. The court was of the opinion that the purchase of the cars by the defendant was a normal act of trade (article 1324 of the Civil Code). The act therefore could be performed by the defendant without the applicant’s consent. As stated in article 1330 (b) of the Civil Code, the responsibility of the applicant was limited up to the value of her share in the community of acquests.

On July 6, 2007, the court held in ‘Mary Camilleri vs Joseph Caruana Company Ltd’ that acts performed by one spouse were still binding upon the community of acquests. However, if the debt was contracted as a normal act of trade, business or profession, creditors could enforce their claims over the assets of the community, and if this was not sufficient, over the paraphernal property of the person carrying out business and not over the other spouse’s paraphernal property.

The court said that by requesting the issuance of a prohibitory injunction to prevent the sale of the cars, the applicant tacitly confirmed that she considered the cars to belong to the community of acquests. The court was morally convinced that she was aware that her estranged husband started a car rental business and that he acquired cars on credit terms.

It resulted further that when the applicant filed separation proceedings, she failed to take steps to impede her estranged husband from burdening the community of acquests.

For these reasons, on May 30, 2013, the First Hall of the Civil Court gave judgment by rejecting the applicant’s requests; though she was not held to be liable for the defendant’s debts beyond her share in the community of acquests.

The applicant was condemned to pay judicial costs.

Dr Karl Grech Orr is a partner at Ganado Advocates.