Two lawyers and their legal firm have been ordered to pay almost €700,000 to the heirs of Ronald Luther Phillips after a court ruled that they had not given the late Mr Phillips information about money entrusted to them by him for investment purposes, nor had they refunded it to him when requested.
Mr Phillips filed his case in the First Hall of the Civil Court against Dr Patrick Spiteri and Judge Godwin Muscat Azzopardi. The case was also filed against the legal firm Muscat Azzopardi Spiteri and Associates and against the lawyers' wives.
In his judgment, Mr Justice Joseph Zammit McKeon ruled that the wives ought not to have been a party to the suit and declared them non-suited.
The court heard that Mr Phillips had entrusted £557,543 to the law firm in 2000. He claimed the defendants had, without his knowledge or consent, deposited the money in the law firm's client account and refused to give him any further information.
According to Mr Phillips, he had repeatedly, through his lawyers in Malta and abroad, requested a statement of account and a record of investments made with his capital, but his requests had not been met.
He, therefore, asked the court to declare that the capital sum of £557,543, together with any interests or dividends thereon, his property, and to order defendants to give him a detailed statement of account and to refund the monies belonging to him.
On their part, the defendants pleaded that Mr Phillips had to prove ownership of the funds and also that a due diligence exercise had to be carried out vis-a-vis their provenance.
In its judgment, the court concluded there was evidence to show the funds belonged to Mr Phillips. The issue of due diligence, said the court, was invalid, for the defendants ought to have carried out a due diligence exercise before accepting Mr Phillips' money, and not insist upon the exercise being carried out when he asked for restitution of his money.
The court also held that both Dr Muscat Azzopardi and Dr Spiteri were responsible towards Mr Phillips. Even though Dr Muscat Azzopardi submitted that his only function in the law firm was to carry out litigation and that he had no knowledge about funds deposited with the firm, the court ruled that as equal partners in the law firm Dr Muscat Azzopardi was liable together with Dr Spiteri.
The clients' account into which Mr Phillips' money was transferred had two signatories, namely Dr Spiteri and Dr Muscat Azzopardi. Each of them could administer this account, so they shared responsibility for it.
The court added that although Dr Muscat Azzopardi declared that he was unaware of what Dr Spiteri was doing with this clients' account, he was still obliged to ensure that the law firm constituted by him and Dr Spiteri was being managed properly.
In conclusionthe court ordered Dr Spiteri and Dr Muscat Azzopardi together with their law firm to refund to Mr Phillips' heir €699,629.21 (equivalent to £577,543.92) together with interest at eight per cent per annum with effect from July 24, 1998.