Non fulfilment of obligations may result in damages

Damages may ensue as a consequence when someone fails to fulfil his or her obligations.

This was held in Darren Abela -v- Carmelo Muscat et on 1 July 2020  before the First Hall of the Civil Court presided by Madame Justice Anna Felice.

In his application, Abela explained that the parties had entered into a promise of sale agreement on 24 July 2017 to purchase a property in Mgarr.

This promise of sale agreement was extended a number of times, but last expired on 30 November 2018 and Muscat failed to appear for the contract.

Muscat explained that he first needed his sister’s authorisation and a further payment of €30,000. The plaintiff did not agree.

Abela asked the Court to force the sale to go through by appointing a notary to publish the contract, alternatively.

Muscat filed a statement of defence and held that the contract could not go through because there were pending issues on the property, namely there was a mistake on the measurements of the property and there is need a correction of the contract that divided the property between Muscat and his sister.

From the evidence produced, when the notary was carrying out the searches noticed a discrepancy between the measurement of the apartment built and the area of the airspace in the contract of division.

The discrepancy was around 36 square meters and therefore, required a correction of the contract.

The promise of sale agreement was extended three times and before the last time, the defendant asked an additional €30,000 to give to his sister to convince her to sign the acts of correction.

This action is based on Article 1357 of the Civil Code, which reads:

“(1) A promise to sell a thing for a fixed price, or for a price to be fixed by one or more persons as stated in the foregoing articles, shall not be equivalent to a sale; but, if accepted, it shall create an obligation on the part of the promisor to carry out the sale, or, if the sale can no longer be carried out, to make good the damages to the promisee.

(2)  The effect of such promise shall cease on the lapse of the time agreed between the parties for the purpose or, failing any such agreement, on the lapse of three months from the day on which the sale could be carried out, unless the promisee calls upon the promisor, by means of a judicial intimation filed before the expiration of the period applicable as aforesaid, to carry out the same, and unless, in the event that the promisor fails to do so, the demand by sworn application for the carrying out of the promise is filed within thirty days from the expiration of the period aforesaid.”

The legal principle was explained on 23 November 2005 in Brinx Limited -v- Francis Said, where the court held that promise of sale binds the parties to sell and purchase.

If any of the parties do not fulfil their obligations then damages could arise as a consequence. In another judgement, Angelo Zahra -v- Carmelo Vella of 29 September 2016, the Court held that damages would occur in a promise of sale, only if the sale can take place.

If there is a situation of impossibility, then one party cannot fulfil its obligation as listed in the agreement, then there is no case of damages.

Article 1125 of the Civil Code states that if a person does not fulfil its obligations at law he or she is responsible for damages.

According to the evidence produced, the property inherited by the defendant was the airspace of a house and in the contract of division there was a mistake in the measurements.

The house was later developed into apartments and the land space measurements were different, although the division among the heirs held that they were accepting the property in the state it was in.

The defendant declared that he would like to sign the final contract with the plaintiff, though the correction is still pending. However, his sister is refusing to sign the correction deed.

His sister, Mary Gauci, was called into suit, however did not reply to the action. This does not mean that she admitted to the claims presented by the Plaintiff.

The Court, on deliberating, held that the correction deed was in fact essential and it seems that the plaintiff and the defendant agree that it should take place.

Therefore, although there is no formal request that the Court orders the correction deed be signed, it believes that it could order for this to take place in order for the final deed to be signed.

The Court then moved to order the parties to sign the correction deeds within 20 days.