The Court of Appeal, composed of Chief Justice Vincent De Gaetano, Mr Justice Joseph A. Filletti and Mr Justice Albert J. Magri, on June 25, 2010 in the case "Vincent Curmi and Dr Noel Arrigo noe vs Bank of Valletta plc" held, among other things, that a "bank" was to be deemed a "shop" for the purposes of Chapter 69 of the Laws of Malta. A bank carried out objective acts of trade and provided services against payment.

The facts in this case were as follows:

On August 28, 1989, Vincent Curmi and Dr Noel Arrigo, as administrators and in representation of the heirs of the late Marquis John Scicluna, filed legal proceedings against Bank of Valletta requesting their eviction from 1/5 Palace Square, Valletta, before the First Hall of the Civil Court.

It was stated that on July 30, 1958, the late Marquis Scicluna leased the main office of Scicluna's Bank, that is 1/5 Palace Square, Valletta to the National Bank of Malta under the conditions therein stipulated.

Under Clause 4 the tenant was obliged to use the premises as the seat of Scicluna's Bank. Subsequently in 1968, the lease was extended to include additional properties at premises numbers 132-135 Strait Street, Valletta.

On 1974, the National Bank of Malta was succeeded by Bank of Valletta plc, which acquired all its assets by way of an Act of Parliament.

After 10 years, the original term of lease expired and was renewed annually. The administrators of the Marquis Scicluna's estate refused to consent to the transfer of lease to Bank of Valletta plc, and never accepted the rent from Bank of Valletta.

They claimed that Bank of Valletta continued to occupy the property without valid title, and that they suffered damages, consisting in the loss of rent and interests.

In their writ, the administrators requested the court (1) to declare that Bank of Valletta occupied 1/5 Palace Square as well as 132-135 Strait Street, Valletta, without valid title; (2) to order them to vacate the property; (3) to declare Bank of Valletta to be responsible for damages, as a result of their unlawful occupation; (4) to liquidate the damages; and (5) to condemn Bank of Valletta to pay damages which it liquidated.

During the proceedings the administrators put forward the argument that:

• The lease of the premises was of a "business concern" and not of bare premises;

• The provisions of Chapter 69 were not applicable;

• The Civil Code provisions on lease applied;

• The definition of "shop" in Chapter 69 did not include a bank.

In reply, Bank of Valletta contested the lawsuit. It submitted in defence that there was no change of tenant. It denied occupying the premises without valid title, as legally it stepped into the shoes of the National Bank of Malta.

Bank of Valletta in addition contended that it enjoyed protection under Chapter 69 and the bank was to be included in the definition of "shop".

On March 28, 2008 the First Hall of the Civil Court declared (ex officio) that it was not the competent court to consider this case and, accordingly, freed Bank of Valletta from the proceedings. The first court was not convinced that the parties had intended to lease a business concern.

It was stated in the lease agreement of July 30, 1958 that: "By these presents Marquis John Scicluna... as the Landlord and Mr Charles Lowell, in his capacity as manager of Scicluna's Bank, on the other part, hereinafter referred to as the tenant, whereby the said Landlord agrees to grant on lease and the said tenant agrees to accept the premises at No. 1/5 Palace Square, Valletta, the seat of Scicluna's Bank, for a period of 10 years certain from January 1, 1959, at a yearly rent of £800... The consistency of the premises are those as described in the original deed at para 3, dated December 14, 1945 in the records of Not. R. Frendo Randon and including the flat and rooms marked X, B and C on plan attached with the said deed."

The fact that at the time the premises had been used as the "seat" of Scicluna's Bank did not mean that the lease had to be of a "business concern".

Article 1002 of the Civil Code provides that "where, by giving to the words of an agreement the meaning attached to them by usage at the time of the agreement, the terms of such agreement are clear, there shall be no room for interpretation".

Article 1003 of the Civil Code provides that "where the literal meaning differs from the common intention of the parties as clearly evidenced by the whole of the agreement, preference shall be given to the intention of the parties".

In the circumstances the intention was clear. There was no evidence that the parties wanted to lease a business concern.

Reference was made to "Baldacchino vs Caruana", dated December 28, 2001 (App Inf JSP).

In this case, the court held that "art" and "trade" were to be widely interpreted to cover any form of economic activity. The word "shop" in Chapter 69 was to be widely construed to include any place where services were rendered against payment. The court noted that the activities of a bank were an act of trade.

It said that a bank was included in the definition of a "shop" and, in this respect, Chapter 69 applied for purposes of renewal.

As it did not result that Bank of Valletta occupied "without title" or that they were occupying illegally or abusively, the First Hall declared that it lacked competence rationae materiae.

In "C. Camilleri et vs P Mifsud et", dated August 12, 1994, it was held that there was occupation "without title" if a person occupied without consent, abusively, arbitrarily and clandestinely.

A court was free to declare that it was not competent, even if no such pleas were raised by defendant, pointed out the first court. In addition, it was not possible for the administrators to claim a breach of human rights in these eviction proceedings.

A separate ad hoc lawsuit had to be made, and this, not against Bank of Valletta, which was not the legitimate defendant in a human rights action.

Aggrieved by the decision of the first court, the administrators entered an appeal, calling for its revocation.

It was argued that the object of lease was Scicluna's Bank, as a business concern, and that a bank was not a "shop" for the purposes of Chapter 69.

On June 25, 2010, the Court of Appeal gave judgment by dismissing the appeal and by confirming the decision of the first court.

The following reasons were given for the court's decision. Agreeing with the decision, of the first court, it considered that "premises" were leased.

The lease was not of a business concern. There was no assignment of goodwill of Scicluna's Bank.

The National Bank of Malta had only acquired the lease of the premises. It was not relevant that the premises were formerly used as a bank.

With reference to the case, (App Inf) "Baldacchino vs Caruana", dated December 28, 2001, the court adopted a similar interpretation of the word "shop" within the context of Chapter 69 of the Laws of Malta.

It considered a "bank" to be included by the term "shop". A bank carried out objective acts of trade, and provided services against payment, so concluded the court.