The Court of Appeal, composed of Chief Justice Silvio Camilleri, Mr Justice Tonio Mallia and Mr Justice Joseph Camilleri, on November 29, 2013, in the case “Geranzio Azzopardi v Carmelo and Maria Bezzina” held, among other things, that Azzopardi was entitled to sell the truck even though he was not the registered owner.
The facts in this case were as follows.
Geranzio Azzopardi entered a private agreement dated March 18, 2003, with Carmelo and Maria Bezzina whereby it was agreed that Bezzina would purchase a refuse truck with registration number KAN934.
The truck was sold in December 2008. As Bezzina did not pay for the truck, Azzopardi proceeded by filing legal proceedings whereby he requested the court to condemn Bezzina to pay €20, 970 with legal interests arising from March 29, 2005.
Bezzina, in reply, contested the legal action and raised a number of pleas in defence.
1. Prescription: that his action was time-barred by 18 months’ prescription in terms of article 2148 (b) chapter 16 of the Laws of Malta, which provided: “Actions of creditors for the price of merchandise, goods or other movable things, sold by retail.”
2. Nullity: the absence of Azzopardi’s wife as plaintiff meant that these proceedings were null.
3. Non-performance: as Azzopardi failed to honour his obligations under the agreement dated March 18, 2003, no payment was due to him.
4. Nullity of sale: as Azzopardi was not the owner of the truck, the sale was null.
5. In addition, Azzopardi was allegedly not due anything as the truck was destroyed by fire.
On January 28, 2010, the First Hall of the Civil Court dismissed Azzopardi’s requests on grounds that it had not been proven that he was the owner of the truck. Article 1372 of the Civil Code provides:
“Saving the provisions of article 559 and the provisions relating to Il-Monti in regard to pledges, the sale of a thing belonging to another person is void:
• Provided that such sale may give rise to an action for damages if the buyer was not aware that the thing belonged to another person:
• Provided also that the nullity of such sale may in no case be set up by the seller.”
In Falzon v Tanti dated December 7, 1956, it was held that any sale of a motor car had to be in writing; otherwise the sale would be inexistent. In this case the First Court had doubts whether Azzopardi had validly acquired the truck.
For purposes of public order it was not acceptable for a person to sell a car, even by private writing, if it was not shown that he was the registered owner of the vehicle. The First Court, however, dismissed Bezzina’s other pleas.
The court said that Azzopardi could not be held liable of any failure to perform, when Bezzina did not pay the price. Nor was Azzopardi ever requested to transfer the vehicle
It considered that Bezzina did not pay the balance amounting to €20, 970.
Azzopardi had originally acquired the vehicle from G. Zammit, however, the transfer was not registered with the competent authorities. Bezzina purchased the truck as well as the contracts associated with the waste collection business. The contracts were assigned to Bezzina, who never denied being a debtor of Azzopardi.
In accordance with the legal principle pacta sunt servanda, an agreement was binding upon the parties: Beacom et v Spiteri Staines dated October 5, 1998.
Pleas of prescription: Article 2148 (b) of the Civil Code mentioned sale by retail. By retail, it was intended that the purchased item was for the personal consumption of the buyer. A sale was ‘wholesale’ if the buyer wished to resell it as a business: Borg v Bonello et now (App) dated June 22, 1970.
The court did not feel that in this case there was any retail sale, and it felt that Bezzina could not invoke article 2148 (b) of the Civil Code.
The object of sale was not intended for the personal needs of the buyer. The court said that the provisions on prescription should be very restrictively interpreted, re Alf Mizzi & Sons (Marketing) Ltd v Dismar Co Ltd dated October 12, 2001. The court dismissed the plea of prescription.
Presence of plaintiff’s wife: Her presence was not required as the sale was an ordinary act of administration. Azzopardi could act on his own without his wife’s intervention, noted the court.
Non-performance: Bezzina did not show that Azzopardi was to blame for transferring the truck.
In addition there was no proof that the truck was destroyed by fire.
Aggrieved by the decision of the First Court, Azzopardi entered an appeal, reiterating his request for the court to condemn Bezzina to pay him €20,970.
The court noted that the First Court decided against Azzopardi as he was not the registered owner of the truck. According to article 1372 of the Civil Code, the sale of something belonging to another was null. It appeared that the truck was still registered in the name of Waste Care Enterprises Ltd.
It was later sold to G. Zammit and finally to Azzopardi, who transferred it to Bezzina. The truck remained registered in the name of Waste Care Enterprises. No registration of transfer was ever done. The First Court felt that once Azzopardi was not the registered owner of the truck, he could not sell it to others and that therefore the agreement with Bezzina was null and void.
The transfer occurred after 1993.
It appeared that up to June 15, 2009, the truck was still registered in the name of Waste Care Enterprises and the last licence was valid up to November 30, 2002. As it did not result that the alleged transfer occurred before 1993, it was not necessary for it to be in writing.
The transfer between Waste Care Enterprises, Zammit and Azzopardi were deemed to be valid and effective, even if they were not registered. Article 26 of chapter 65 provides that a registered owner remained subject to the provisions of the ordinance as if he were the owner. The failure to register the transfer did not mean that the title did not pass but only that the registered owner remained responsible for the provisions of the ordinance.
In Micallef v Mamo (PA) dated March 30, 2010, it was held that the fact that the transfer was not registered did not mean that a person was not the owner. The registration of a vehicle and its licence could serve as proof to determine who the owner was. However, it was not exclusive proof.
The transfer of title of a car could be done by any means valid at law and if it results that the vehicle belonged to Azzopardi, he could legally transfer the title to Bezzina in any way. Once the truck was in Azzopardi’s possession, the presumption was that the truck belonged to him unless there was contrary proof. In this case there was no proof to rebut this presumption. Article 525 of the Civil Code provides:
“(1) A person is in all cases presumed to possess in his own behalf, and by virtue of a right of ownership, unless it is proved that he has commenced his possession in the name of another person.
(2) Where a person has commenced his possession in the name of another person, he shall be presumed always to possess upon the same title unless the contrary be proved.”
This court said that the First Court was not correct to say that Azzopardi had to show that he validly acquired the title in the vehicle; for it was presumed that he possessed as owner. It had to be assumed therefore that Azzopardi had the title and that he could sell the truck to Bezzina by the private writing dated March 18, 2003.
The court accepted Azzopardi’s appeal and held that the sale was not null as the seller was the owner of the vehicle.
The court considered Bezzina’s incidental appeal. As regards Bezzina’s plea of prescription, it had to consider the nature of the sale in order to determine whether it was sale by retail, in particular if the object of sale was for the personal consumption of the buyer. A sale was ‘wholesale’, if the buyer purchased it for resale. The court dismissed the plea of prescription as there was no retail sale in the circumstances.
The court said that Azzopardi could not be held liable of any failure to perform, when Bezzina did not pay the price. Nor was Azzopardi ever requested to transfer the vehicle.
Bezzina could have deposited the price in court to safeguard his interests but as he failed to pay for the truck, he could not now claim that Azzopardi failed to perform his obligation to transfer the truck.
For these reasons, on November 29, 2013, the Court of Appeal gave judgment by accepting Azzopardi’s appeal, as well as all his requests. It rejected all Bezzina’s pleas of defence.
Dr Karl Grech Orr is a partner at Ganado Advocates.