Lease taken over by widow is not a sublease

The act of a widow taking over the lease of a butcher shop does not constitute a sublease. This was decided by Magistrate Joanne Vella Cuschieri on 2 May, 2017 in Victoria Attard -v- Giorgia Mercieca and Angela Mercieca.

In her application, Victoria Attard explained to the Rent Regulation Board in Gozo, that she is the owner of a shop in Xaghra and recently discovered that the tenant, Giorgia Mercieca handed over the shop to her son’s widow, Angela Merceica. Article 1614 of the Civil Code does not permit such subletting, since the lease was given exclusively to Giorgia Mercieca and Attard never authorised her to pass it to her daughter in law. As a result Attard is asking for the lease to be terminated and that she will take possession of the shop.

The two defendants filed a number of pleas, amongst which they explained that Giorgia Mercieca had rented the shop 43 years ago, for her son Sammy Mercieca, because originally he was still underage. The defendants claimed that Attard knew that Angela Mercieca was running the shop and therefore, she had given her tacit consent. 

Magistrate Vella Cuschieri analysed the issues, where Giorgia Mercieca had rented the butcher shop and her son, Sammy, immediately ran the shop, even though he was under 18 years of age. However, when he died in 2007, his wife Angela took over the shop. Attard is claiming that this is tantamount to a sublease. 

The board then analysed Article 1614 of the Civil Code:

“(1) The lessee is not entitled to sub-let a thing or to assign its lease, unless such right was agreed upon in the contract.

(2) For the purposes of this Sub-title, a management agreement or any other form of agreement, by means of which a lessee transfers to third parties the possession of the tenement or of the business operated from the commercial tenement shall be considered as sub-letting.

(3) Where the lessee is a limited liability company or any other form of company, the cumulative inter vivos transfer of fifty per cent of the shareholding, even if carried out by means of more than one transfer and, or the transfer of the actual controlling power of the administration of such company or of the control of the business conducted from the tenement shall be considered as a sublease:

Provided that such a transfer shall not be considered as a sublease if the transfer was made to the wife or husband who are not legally separated and, or to the children of the shareholder.“

From the evidence produced it is evident that Sammy Mercieca always ran the shop, although his mother was the tenant. Upon his death, his wife Angela took over. The rent receipts always quoted Giorgia Mercieca. When Sammy Mercieca married, his wife Angela also helped out in the shop. 

Attard had testified that she knew of the situation that Sammy Mercieca was running the butcher shop and not the tenant, but when he died, she did not expect that the widow would take over herself. She held that in fact when she first rented out the shop to Giorgia Mercieca, she ran the shop with her husband Kurun and as Sammy was their son, he used to help out at a later stage. Giorgia Mercieca denied this in an affidavit and confirmed that her son Sammy had taken over the shop from the beginning of the lease and at a very young age. In fact the shop was named Sammy’s Butcher.  

Other evidence included the Commerce Department, which confirmed that the trading licence was in Giorgia Mercieca’s name,  the electricity meter was on Kurun Mercieca’s name.

The board held in the judgement that the owners were aware that the tenant was not running the shop, but her son was and in fact accepted the rent from Sammy and Angela Mercieca. However, this does not mean that they authorised a sublease. The board did not find any evidence of sublease from Giorgia Mercieca to Angela Mercieca, but this was a mere continuation of the running of the shop, which Sammy did before his demise. There are no management agreements between the parties. The evidence showed that it was never intended that Giorgia Mercieca would run the shop personally but her son would do so. As a result there is no sublease and the application was turned down.

Dr Malcolm Mifsud, Partner, Mifsud & Mifsud Advocates