The First Hall of the Civil Court, presided over by Mr Justice Joseph Zammit McKeon, on March 29, 2012, in the case “Matthew Dimech and Lorraine Zahra vs Joanne Camilleri”, held among other things that, if a defect was not visibly apparent to the buyer at the time of the sale, the defect could be considered to be latent. A court did not have to consider whether a more technical person would have noticed the defect if certain tests had been carried out.

The facts in this case were as follows:

The court considered that, at the time of the contract, the ceiling appeared to be in a good condition.

Matthew Dimech and Lorraine Zahra jointly purchased an apartment in St Lukes’s Road, Guardamangia from Joanne Camilleri for the price of Lm41,000 (€95,504) by a pubic deed dated September 14, 2006 in the acts of Notary Tonio Cauchi.

After approximately one year, in February 2008, a number of serious, structural defects appeared in the ceiling of several rooms, which were not visible at the time of the purchase.

Mr Dimech and Ms Zahra stated that these defects were latent, which reduced the value of the property. They said they would not have purchased the property or would have offered a lower price if they were aware of these defects.

They engaged surveyors to assess the damage, incurring costs amounting to €12,675 in surveyors’ fees.

Faced with this situation, Mr Dimech and Ms Zahra proceeded to file the so-called actio aestimatoria before the First Hall of the Civil Court, according to the provisions in the Civil Code on latent defects, against seller, Joanne Camilleri.

They asked the court:-

• To declare the existence of latent defects, which reduced the value of their property;

• To establish and liquidate that part of the price which should be refunded,

• To condemn Joanne Camilleri to return such part of the purchase price, to be determined by the court

In reply, Ms Camilleri contested their legal action which, she said, was time-barred, in terms of article 1431 of the Civil Code.

She submitted that the defects were clearly visible at the time of the purchase of the flat. Nor were the defects attributable in any way to any failure on her part.

In this respect, she contended that she should not be condemned to refund part of the purchase price.

On March 29, 2012, the First Hall of the Civil Court upheld Mr Dimech’s and Ms Zahra’s requests. It ordered Ms Camilleri to refund €10,500.

The court considered that, at the time of the contract, the ceiling appeared to be in a good condition. The premises were white washed in 2003.

Ms Camilleri informed the court that the roof of the flats was plastered each year and that there was no water seepage.

According to a technical report, the defect had existed before the purchase but it was not noticeable. The costs to repair the damage amounted to €11,917.

In “Calleja vs Mifsud” dated November 19, 2001, the Court of Appeal held that the report of a technical expert, appointed by the court, should be considered as evidence on the facts. While the court was not obliged to accept the report, and had the right to ignore it, it should not do so, without reason.

The court could always read the report with a critical eye and, if it was not satisfied, it could discard it.

But the court should not ignore the report without good reason. It had to have valid reasons which place in doubt the technical report – re: “Grima vs Mamo et noe”(CA) dated May, 29, 1998; “Cauchi vs Mercieca” (CA) dated October 6, 1999; “Saliba vs Farrugia” (CA) dated January 28, 2000; and “Calleja noe vs Mifsud” (CA) dated November 19, 2001.

In this case, this court fully accepted the report of the technical expert, and considered the defects to be “latent”.

Legal Position: Articles 1424 and 1425 Civil Code provide:

1424. “The seller is bound to warrant the thing sold against any latent defects which render it unfit for the use for which it is intended, or which diminish its value to such an extent that the buyer would not have bought it or would have tendered a smaller price, if he had been aware of them.”

1425. “The seller is not answerable for any apparent defects which the buyer might have discovered for himself.” In case of latent defects, a buyer at law had a choice of two alternative legal actions: the actio redhibitoria to rescind the contract or the actio aestimatoria, where he could keep the object and request the reduction of the price.

Article 1427 of the Civil Code provides that “in the cases referred to in articles 1424 and 1426, the buyer may elect either, by instituting the actio redhibitoria, to restore the thing and have the price repaid to him, or, by instituting the actio aestimatoria, to retain the thing and have a part of the price repaid to him which shall be determined by the court.”

Plea of Prescription: As regards the plea of prescription raised by Ms Camilleri, the court considered Article 1431 which provides:

(1) “The actio redhibitoria and the actio aestimatoria shall, in regard to immovables, be barred by the lapse of one year as from the day of the contract, and, in regard to movables, by the lapse of six months as from the day of the delivery of the thing sold.”

(2) “Where, however, it was not possible for the buyer to discover the latent defect of the thing, the said periods of limitation shall run only from the day on which it was possible for him to discover such defect.”

(3) “The said periods of limitation shall run as provided in sub-article (2) of article 1407.”

The court said that the test was whether a buyer could have noticed the defect.

In this case, the buyers could not have noticed the defect, which was not visible at the time of purchase.

It was not relevant, therefore, whether technical persons could have made more thorough tests, to evaluate the strength of the ceiling.

Given that the defect was latent for purposes of law, the court had to consider whether legal action was taken within the time limit imposed in Article 1431.

In “Muscat Baldacchino vs V. Kind” (CA) dated October 18, 1963, the court held that the words “from when the defect could have been noticed” should be interpreted from the date when the latent defect could be ascertained definitively.

A buyer had the right to request a reduction of the price when the latent defect rendered the object not fit for the use intended, or reduced its value to the extent that the buyer would not have bought it or would have offered a lower price.

The court said that, in this case, the latent defect had been proven. It resulted that the defect was discovered in February 2008 and that this lawsuit was filed before the lapse of one year.

The court, therefore, dismissed the plea of prescription.

Merits of the case: The court found that Mr Dimech and Ms Zahra’s legal action was well founded.

It felt that the purchase price should be reduced by €10,500.

The court ordered, however, that their costs to obtain an architect’s report or for tests to be carried out to assess the strength of the ceiling could not be refunded by sellers.

It said that these expenses would constitute damages under article 1429 of the Civil Code if it was shown that the seller had been aware of the defects. This was not proven, pointed out the court.

Dr Grech Orr is a partner at Ganado & Associates.