Dispute resolution

First Hall Civil Court (Constitutional Jurisdiction) finds articles of the Customs Ordinance and Excise Duty Act in breach of human rights. In the case 'Michael Zammit v. Kontrollur tad-Dwana et'decided on the 8th February 2019, the First Hall of the Civil Court (Constitutional Jurisdiction) found that Articles 68 and 72(4) of Chapter 37 of the Laws of Malta (Customs Ordinance), together with Article 16A of Chapter 382 of the Laws of Malta (Excise Duty Act), are in breach of Article 1 of Protocol 1 of the European Convention of Human Rights and Article 37 of the Constitution of Malta (the right to property). It also found that Articles 72 and 73 of Chapter 37 of the Laws of Malta (Customs Ordinance), together withArticle 16A of Chapter 382 of the Laws of Malta (Excise Duty Act), are in breach of Article 6 of the European Convention and Article 39 of the Constitution of Malta (the right to a fair trial) and in breach of Article 13 of the European Convention (the right to an effective remedy). In December 2008, the vessel of the plaintiff in the above-mentioned case was seized by Customs officers on the allegation that he used the vessel to bring packets of cigarettes into Malta without having paid duty. The plaintiff filed separate proceedings before the First Hall of the Civil Court in terms of Article 73 of the Customs Ordinance in order to have the vessel released. The First Hall turned down his request. The plaintiff then appealed before the Court of Appeal. (The Court of Appeal turned down the appeal and confirmed the judgment of first instance). After he filed the case in terms of Article 73, the plaintiff obtained a bank guarantee of €45,000 which was received by the Commissioner for Revenue in exchange for the release of the vessel in terms of Article 72(4) of the Customs Ordinance. Four years after the plaintiff had his vessel seized by Customs officer, he was charged in front of the Court of Magistrates on the grounds of a violation of the provisions of the Customs Ordinance and Excise Duty Act. According to Article 68 of the Customs Ordinance and Article 16A of the Excise Duty Act the plaintiff, due to the small amount of unpaid duty, could have opted to pay a penalty and the criminal charges would have been dropped. However, if the plaintiff exercised this option, he would have had to renounce to the bank guarantee of €45,000. The plaintiff filed the above-mentioned constitutional case wherein he alleged that the provisions of Article 16A of the Excise Duty Act were in breach of Article 1 Protocol 1 of the Convention and Article 37 of the Constitution since the renunciation of the bank guarantee would place a disproportionate burden on him. The Court agreed with the plaintiff in that it found that although the law pursued a legitimate aim, it was disproportionate. The bank guarantee was twenty times the value of the duty and excise tax allegedly due and ten times the penalties that could have been imposed on the plaintiff. The Court also found that there was a breach of Article 6 of the Convention (the right to a fair trial). The automatic renunciation to the bank guarantee (if he opted for the imposition of a penalty as described above) would mean that a civil case filed by the plaintiff in order to retrieve the bank guarantee would be rendered ineffective because he would be made to give up, in the criminal case, what he is requesting in the civil suit. There would therefore be no equality of arms in the civil suit and the plaintiff would not be able to defend his case. The Court also found that in this respect the law does not give an effective remedy to the plaintiff and therefore found a breach of Article 13 of the Convention. Apart from declaring the above-mentioned articles of the law unconstitutional, the Court ordered that should the plaintiff opt for the payment of the penalty, this would not lead to the renunciation to the bank guarantee and the said guarantee would have to be released. 

Human Rights Legal Update The European Court of Human Rights (the "ECtHR") has decided the following Article 1 of Protocol No. 1 ("A1-P1") cases during the month of February 2019: Ionescu v. Romania (Application no. 19788/03 et al.) – the ECtHR declared a breach of A1-P1 in a case where the owners of an expropriated property could not retrieve possession of that property due to the resale of said property by the Romanian state to third parties. Alikhanyan v. Armenia (Application no. 6818/10) – the ECtHR declared a breach of A1-P1 in a case where the Armenian state earmarked and expropriated agricultural land for the mining of copper-molybdenum deposits without offering an adequate amount of compensation to the applicant. The court condemned the domestic courts' failure to consider the fact that the agricultural land provided the applicant with his only source of income. Aleksić v. Slovenia (Application no. 57123/10) – the ECtHR declared a breach of A1-P1 in a case where an ex-citizen of the Federal Republic of Yugoslavia and ex-member of the Yugoslav People's Army was refused a military pension on the grounds of discriminatory nationality criteria. Çataltepe c. Turquie (Application no . 51292/07) – the ECtHR declared a breach of A1-P1 in a case where the applicant, who was an owner pro indiviso of a plot of land in Ankara, Turkey, instituted proceedings for the dissolution of community property (action en dissolution de l'indivision). One of the co-owners of said property was declared absent and was henceforth represented by the public Treasury of the Turkish state. The Treasury instituted actions against the applicant to impugn his capacity as successor in title of the previous owners in the land registry of Ankara. Proceedings resulting from those actions, and which came before the Turkish Court of Cassation, were found to be seriously lacking both in motivation and reasoning. Cassar Torreggiani et v. Malta [1] – four cases brought against the Maltese government for breach of A1-P1, in which the applicants claimed that the amounts awarded by the Maltese courts for the breach of Article 1 Protocol of the Convention in relation to their property was too low. The applicants and the Government reached a friendly settlement and the cases were stuck off the list. Dr Michael Camilleri from Mamo TCV Advocates formed part of the applicants' legal team. 1 Cassar Torreggiani v. Malta (Application No. 61981/16); Borg v. Malta (Application No. 75199/18); Azzopardi Vella v. Malta (Application No. 8423/17); Portelli v. Malta (Application No. 28404/17)

Amendments to Chapter 158 were introduced by Act No. XXVII of 2018. The amendments affect the leases created by virtue of a previous title of emphyteusis or sub-emphyteusis which commenced before the 1st June 1995 through the application of article 5, 12, or 12A of Chapter 158. Amendments to Chapter 158 were introduced by Act No. XXVII of 2018. The amendments affect the leases created by virtue of a previous title of emphyteusis or sub-emphyteusis which commenced before the 1st June 1995 through the application of article 5, 12, or 12A of Chapter 158. The constitutionality of the provisions of Chapter 158 has been challenged repeatedly in front of the Maltese Courts and in front of the European Court in Strasbourg. Since the case of Amato Gauci v. Malta, (App no 47045/06 [ECHR, 15 September 2009]), the majority of the cases brought by owners arguing a breach of their rights to property have been upheld by our Courts and the Court in Strasbourg. Parliament has now introduced amendments to Chapter 158, supposedly to try and remedy the situation and decrease the excessive burden put on owners by operation of the law. It is doubtful whether these amendments will satisfy constitutional requirements. The workings and application of the means test, the length of proceedings in front of the Rent Regulation Board and the application of the increase in rent might still amount to a breach of Article 1 Protocol 1 of the European Convention and Article 37 of the Constitution due to the lack of proportionality between the rights of the owner and the rights of the community at large and lack of procedural safeguards to remedy such situation. The Amendments Landlords can now file an application before the Rent Regulation Board demanding that the rent be revised to an amount not exceeding 2% per annum of the open market freehold value of the dwelling house. At the initial stage of the proceedings, the Board must conduct a means test in accordance with the Continuation of Tenancies (Means Testing Criteria) Regulations (Subsidiary Legislation 16.11). The means test shall be based on the income of the tenant between the 1st January and the 31st December of the year preceding the year when the proceedings are commenced and the capital of the tenant on the 31st December of the said year. Where a tenant does not meet the criteria of the means test (i.e. has the necessary means in accordance to the regulations) the tenant will be given five years to vacate the premises and the amount of rent payable in those five (5) years will be double the rent which would have been payable in terms of articles 5, 12 or 12A of Chapter 158. Where a tenant meets the criteria of the means test (i.e. does not have the necessary means in accordance with the regulations) the tenant will have to start paying an increased rent to a maximum of 2% of the market value of the premises. However, the Board after viewing the particular circumstance of that case can order that the increase is gradual. The rent will be revised after six (6) years either by an application to the Board or by mutual agreement of the parties.  An application to the Board can also be filed if there is a 'material change in circumstances during the continuance of a lease'. The owner can request a revision of the conditions of the rent on account of their causing a disproportionate burden upon him. An owner may also demand the dissolution of the lease if he can prove through unequivocal evidence that the tenant is not a person in need of the social protection provided by articles 5, 12 or 12A of Chapter 158. However, the owners cannot file a case citing 'material change in circumstances during the continuance of a lease', if an application requesting the increase of the rent up to 2% of the market value (as described above) is pending or if less than three (3) years have elapsed from judgment. According to the proviso to Article 2 of Chapter 158, regarding the definition of a tenant, it is stated that a tenant includes 'the children, and any brother or sister, of the tenant who are not married and who reside with the tenant at the time of his or her death and any ascendant of the tenant who so resides with the tenant.' Where the tenant is a person described in this proviso, the tenant shall only acquire a right to occupy the dwelling house for a period of five (5) years upon the expiration of which the tenant shall vacate the said dwelling house. The compensation for occupation of the dwelling house payable to the owner during this period shall, unless the occupier meets the income and capital criteria of the means test, amount to double the rent which would have been payable in terms of articles 5, 12 or 12A. The amendments described above shall apply also where any emphyteusis, sub-emphyteusis or tenancy in respect of a dwelling house regulated under articles 5, 12, or 12A has lapsed due to a court judgment based on the lack of proportionality between the value of the property and the amount receivable by the landlord and the person who was the emphyteuta or the sub-emphyteuta or the tenant still occupies the house as his ordinary residence on the 10th April 2018. In such cases it shall not be lawful for the owner to proceed to request the eviction of the occupier without first availing himself of the provisions of this article. When deciding on the constitutionality of the provisions of Chapter 158, the Maltese Courts, in recent judgments, usually declare that there has been a breach of Article 1 Protocol 1 of the Convention and Article 37 of the Constitution and that the tenant cannot avail himself of the Articles of the Chapter 158 to continue to reside in the dwelling house (Vide Dr Cedric Mifsud u Dr Michael Camilleri noe v. L-Avukat Generali u Carmelo Camilleri & Dr Cedric Mifsud u Dr Michael Camilleri noe v. L-Avukat Generali u Andrew Azzopardi et decided by the Constitutional Court on 31st January 2014 and 25th October 2013 respectively). The Courts, in constitutional proceedings, will not order the eviction of the tenant.[1] The landlord would have to file a separate case demanding the Court to evict the tenant. By the application of the amendments above, this request for eviction will no longer be allowed before using the procedure set out in the amendments. [1] Vide Josephine Azzopardi pro et noe vs L-Onorevoli Prim Ministru et deciz fis- 27 ta' Gunju 2017 [Rik 96/2014 - Illi gie deciz diversi drabi mill-Qrati taghna li l-proceduri kostituzzjonali mhumiex il-forum addattat sabiex jigi deciz jekk inkwilin ghandux jigi zgumbrat jew le. Din il-vertenza tispetta lill-qrati ordinarja jew lill-Bord li Jirregola l- Kera skont il-kaz. Dak li huwa rilevanti hija l-konsiderazzjoni li, fil-kaz li jinstab li ligi hija vjolattiva tad-drittijiet fundamentali ta' xi parti, dik il-ligi ma tistax tibqa' tinghata effett bejn il-partijiet kemmil darba u sakemm l-applikazzjoni taghha tkun leziva ghad-drittijiet fundamentali ta' dik il-parti (ara sentenza Curmi vs Avukat Generali, Kost 24/06/2016) 

The Uniformity of Energy Labels on Electric Products. The Court of Justice of the European Union (CJEU) has recently delivered a judgment on a preliminary reference relating to the labelling of energy-consuming products, or 'energy labels'. In case c-632/16 the Commercial Court of Antwerp, in Belgium, was faced with the following problem. [1] [1] The Facts :- Dyson, the applicant, is a Belgian company that markets vacuum cleaners that are not fitted with a dust bag. BSH, the respondent, is a Dutch company that markets conventional vacuum cleaners, under the trade marks Siemens and Bosch, that are fitted with a dust bag. According to Delegated Regulation No 665/2013 all market vacuum cleaners must be labelled with an 'energy label' when sold to consumers on the retail market. BSH listed its vacuum cleaners as energy class 'A'. Furthermore, apart from omitting the conditions under which the vacuum cleaners were tested for their energy label, BSH also added other labels, of all shapes and colour, which reproduced the information originally communicated by the energy label. This advertising went beyond what was strictly required by the relevant EU Directives on consumer protection and energy labelling. [2] The Claim :- Dyson's claim was split into two distinct parts – In its first claim, Dyson argued that the use of the energy labels by BSH without specifying that they reflect the results of tests carried out with an empty dust bag amounted to an 'unfair commercial practice' or 'misleading omission' within the meaning of Directive 2005/29. According to Dyson, under normal conditions of use, the pores of the bag become clogged when it fills with dust so that the motor must generate more power to maintain the same suction over extended use. Therefore, Dyson argued that the energy labelling of BSH's vacuum cleaners misled consumers insofar as these should be informed of the extra energy that BSH's vacuum cleaners would consume to maintain their efficiency. By contrast, Dyson's vacuum cleaners are not affected by a loss of energy efficiency under normal conditions of use since they do not use a dust bag. In other words, Dyson's contention was that the technological difference between its own and BSH's vacuum cleaners should, by law, be communicated to the final consumer within the strict confines of the energy label itself. In its second alternative claim, Dyson argued that BSH used several symbols on its packaging which was not provided for in Regulation No. 665/2013, such as: (i) a green label stating 'Energy A', indicating that the vacuum cleaner's overall score placed it in class A with regard to energy efficiency; (ii) an orange label stating 'AAAA Best rated: A in all classes', indicating that the vacuum cleaner's score placed it in class A with regard to cleaning performance on both carpet and hard floors, energy efficiency and dust re-emission; and (iii) the black label with the image of a carpet stating 'class A Performance', indicating that the vacuum cleaner's score placed it in class A with regard to dust pick-up on carpet. The additional labels merely reproduced information already provided by the energy labels. On this claim, the referring court asked the CJEU whether the use of such labels is compatible with Regulation No. 665/2013, in the light of the risk that they might mislead or confuse consumers as regards energy consumption. [3] The Decision :- On the first claim, the CJEU ruled that BSH was not guilty of an unfair commercial practice by listing energy class 'A' on the energy labels of its vacuum cleaners. Even though the tests were carried out with an empty dust bag and were not in accordance with the normal use of a vacuum cleaner, thereby preventing the devices from being compared with each other where they operate in a different manner, no information relating to the conditions under which the energy efficiency of vacuum cleaners was measured may be added to the energy label. Delegated Regulation No. 665/2013, when read in light of Directive 2010/30, prohibits references other than, where appropriate, the reproduction of the EU Ecolabel from being added to the energy label. On the issue of whether BSH should have clarified the testing conditions of its vacuum cleaners in a place other than the energy label, the CJEU stated in very broad and incisive terms that "the conditions under which the energy efficiency of the model of vacuum cleaner concerned was measured cannot be deemed to constitute material information for the average consumer." [2] On the second claim, the CJEU ruled that Directive 2010/30 imposed the use of a uniform energy label so as to inform end-users as to the energy consumption of certain products during their use. The legislator then deemed it fit to promulgate Delegated Regulation No. 665/2013 to establish an exhaustive list of information, relating to the energy consumption of vacuum cleaners during their use, which must be brought to the attention of end-users by means of that energy label. [3] Labels or symbols other than those on the energy label are prohibited if they are likely to mislead or confuse end-users with respect to the consumption of energy or, where relevant, other essential resources during the use of the electric device. Although the propensity of additional labels to mislead the end-user is a question of fact for the referring court to decide, the CJEU made it quite clear that since the matter has been specifically harmonised by the legislator it is to be interpreted strictly. The mere fact that labels and symbols displayed by BSH refer to information already present on the energy label does not rule out the existence of such a risk, especially since they were not graphically identical to those used on the energy label and use a distinct graphic for each label, which could give the impression that they convey different information each time. [4] [1] Dyson Ltd & Dyson BV v BSH Home Appliances NV C-632/16 (Judgment of the Fourth Chamber) [2] Paragraph 43 [3] Paragraph 44 [4] Paragraph 63 of Advocate-General Saugmandsgaard Øe's Opinion: "…the use by BSH of an orange label stating 'AAAA Best rated: A in all classes' in the circumstances of the main proceedings (19) is likely to prompt end users to believe that the model in issue performs better than a model without such a supplementary label."

Proposed amendments being discussed in Parliament aimed at providing sub-lessees of commercial premises, whose sub-lease is going to end on 31st May 2018 by operation of law, with an option to demand the Rent Regulation Board to allow them to continue the sub-lease under revised conditions reflecting market conditions for a maximum period of 10 years. In terms of article 1531I of the Civil Code, as introduced by the amendments to the rent laws in 2009, a lease of commercial premises made before the 1st June 1995 shall terminate on 31st May 2028, unless a specific period has been stipulated in a contract and subject to the other specific provisions contained in this provision as may be applicable in a given case. In the case of sub-letting of commercial tenements made before the 1st June 1995, these shall terminate on 31st May 2018. This cut-off date does not apply if the sub-lease was made by agreement with the lessor. A Bill was introduced in Parliament on 29th January 2018 intended to amend this provision regulating the sub-letting of commercial tenements, by providing sub-lessees currently managing their business from premises held under title of sub-lease terminating on 31st May 2018 by operation of the law with the option of requesting an extension of the term of the sub-lease to the Rent Regulation Board (RRB). This Bill is currently being debated in Parliament and is in its second reading. The proposed amendments contained in the said Bill set out the parameters within which a request for an extension of the term of the sub-lease may be made and/or granted, and these are the following: The sub-lessee shall have the right to continue managing the business from the sub-leased tenement after 31st May 2018 under those conditions determined by the RRB for a further period of a maximum of 10 years; The request shall be made by the sub-lessee to the RRB by means of an application (rikors) filed by not later than the 31st May 2018 stating the reasons why the request is made. The sub-lessee must satisfy the RRB that he will suffer serious prejudice if the request is not upheld; Both the owner and the lessee shall be notified with the application and shall have the right to oppose the request; The RRB has the right, during the proceedings, to fix the amount of compensation to be paid by the sub-lessee to the owner or lessee or both during the pendency of the proceedings. Such order of the RRB is non-appealable; In the event that the RRB upholds the demand for extension of the term of the sub-lease, the RRB shall establish the rent payable by the sub-lessee after 31st May 2018, which amount must reflect the market lease value of the property for the year 2017 for the same use that was being made of the tenement. In the event that the RRB is satisfied that payment of the said market value would impose harsh consequences on the sub-lessee prejudicing his living or that of persons working with him, the RRB may order payment of rent below the said market value. In such case however, the RRB shall order for the rent to increase yearly until it reaches the said market value by the year 2027; The RRB may order that the new rent it establishes be divided between the owner of the tenement and the lessee and this according to such terms as it may establish; The rent established by the RRB shall be payable by the sub-lessee as from 1st June 2018. Any compensation fixed by the RRB to be paid by the sub-lessee during the pendency of the proceedings, shall be deducted from the arrears due. These are in brief the proposed amendments contained in the Bill. Until the Bill passes through Parliament and is enacted in to law, these proposals may be further changed and amended. Mamo TCV will be following the evolution of this Bill and will be reporting further in due course as soon as the final Act of Parliament amending the Civil Code is enacted.

In terms of article 1531I of the Civil Code, as introduced by the amendments to the rent laws in 2009, a lease of commercial premises made before the 1st June 1995 shall terminate on 31st May 2028, unless a specific period has been stipulated in a contract and subject to the other specific provisions contained in this provision as may be applicable in a given case. In the case of sub-letting of commercial tenements made before the 1st June 1995, these shall terminate on 31st May 2018. This cut-off date does not apply if the sub-lease was made by agreement with the lessor. A Bill was introduced in Parliament on 29th January 2018 intended to amend this provision regulating the sub-letting of commercial tenements, by providing sub-lessees currently managing their business from premises held under title of sub-lease terminating on 31st May 2018 by operation of the law with the option of requesting an extension of the term of the sub-lease to the Rent Regulation Board (RRB). This Bill is currently being debated in Parliament and is in its second reading. The proposed amendments contained in the said Bill set out the parameters within which a request for an extension of the term of the sub-lease may be made and/or granted, and these are the following: The sub-lessee shall have the right to continue managing the business from the sub-leased tenement after 31st May 2018 under those conditions determined by the RRB for a further period of a maximum of 10 years; The request shall be made by the sub-lessee to the RRB by means of an application (rikors) filed by not later than the 31st May 2018 stating the reasons why the request is made. The sub-lessee must satisfy the RRB that he will suffer serious prejudice if the request is not upheld; Both the owner and the lessee shall be notified with the application and shall have the right to oppose the request; The RRB has the right, during the proceedings, to fix the amount of compensation to be paid by the sub-lessee to the owner or lessee or both during the pendency of the proceedings. Such order of the RRB is non-appealable; In the event that the RRB upholds the demand for extension of the term of the sub-lease, the RRB shall establish the rent payable by the sub-lessee after 31st May 2018, which amount must reflect the market lease value of the property for the year 2017 for the same use that was being made of the tenement. In the event that the RRB is satisfied that payment of the said market value would impose harsh consequences on the sub-lessee prejudicing his living or that of persons working with him, the RRB may order payment of rent below the said market value. In such case however, the RRB shall order for the rent to increase yearly until it reaches the said market value by the year 2027; The RRB may order that the new rent it establishes be divided between the owner of the tenement and the lessee and this according to such terms as it may establish; The rent established by the RRB shall be payable by the sub-lessee as from 1st June 2018. Any compensation fixed by the RRB to be paid by the sub-lessee during the pendency of the proceedings, shall be deducted from the arrears due. These are in brief the proposed amendments contained in the Bill. Until the Bill passes through Parliament and is enacted in to law, these proposals may be further changed and amended. Mamo TCVwill be following the evolution of this Bill and will be reporting further in due course as soon as the final Act of Parliament amending the Civil Code is enacted.

The Family Business Act (the “Act”), which came into effect on the 1st of January 2017, aims to regulate family businesses and the manner in which they are managed and operated. It also endeavours to ease the process of succession and transfer of the family business.  Through the Act, businesses can structure and register themselves as “family businesses”. Once registered, family businesses will be eligible for benefits available under the Act, including assistance or relief given in terms of the Duty and Documents Transfers Act (“DDTA”), Malta Enterprise Act, Business Promotion Act and in terms of any other law as may be prescribed. The legislation includes an initial set of incentives which are immediately available to registered family businesses to assist them throughout their transition process. THE MAIN PROVISIONS The Act establishes a legal form for a family business. The term family business is defined and identifies the business models by which family businesses trade and operate. The Act also enables foreign family businesses to benefit from this system if a part or all of the business is established in Malta. THE FOLLOWING ENTITIES MAY REGISTER AS A FAMILY BUSINESS: Listed companies; Limited liability companies; Registered partnerships; Trusts; Other registered forms of family business; and Other business. These entities may only be registered as family businesses if they are owned by a minimum of 2 persons who are family members within the same family. REGISTERED FAMILY BUSINESS A business is registered as a family business once it has been accepted for registration by the Regulator. The Register of Family Business is maintained by the Regulator and contains information and data relevant to the registration process. The application to register as a family business must include information relating to the family business, such as contact details, the names of the shareholders, names of family members involved and the written consent of the relevant family members to hold office after registration. OBJECTIVE OF BENEFITS & CONDITIONS The main goal of this Act is that of enabling the transfer of registered family businesses from owners who are family members to other family members within the same family. Transfers made by family members to family members who are ascendants are not eligible for any of the benefits. It is important to note that benefits received under this Act by a registered family business cannot be transferred or assigned to any other person or business. THE BENEFITS The initial governance and fiscal benefits are supported through Malta Enterprise. Programs include the Family Business Transfer of Ownership and the Family Business Support Service, amongst other forms of support mentioned below. These forms of support will range as follows subject to Malta Enterprise’s terms and conditions: Micro Investment of a maximum tax credit of €50,000 over a three-year period. In order to qualify for this tax credit, the undertaking must have less than thirty full-time employees and a turnover or annual balance sheet of less than €10,000,000. Legal, notarial, or accountancy advisory services for assistance in the succession or business transfer of a family business. It is pertinent to note that the first €500 shall be fully covered by Malta Enterprise Corporation. Arbitration of up to five sittings with a value of €2,500. Education and training for owners and their employees of up to €1,000 annually per family business Loan guarantees of up to €500,000 per business for the purpose of acquiring the business or parts thereof. The Incentive Guidelines for Investment Aid 2014-2020 launched in 2014 specify that in the case of acquisition of the assets of an establishment only the cost of buying the assets from third parties unrelated to the buyer shall be taken into consideration. The Incentive guidelines shall allow that where a member of the family of the original owner, or an employee, takes over an enterprise, the condition that the assets be bought from third parties unrelated to the buyer shall be waived. If a registered family business is occupying industrial government premises or land on lease or emphyteusis as prescribed under the Business Promotion Act, the Regulator shall submit a recommendation for the renewal of the tenancy to the Malta Enterprise Corporation and/or the Malta Industrial Parks and such renewal shall not be unreasonably withheld if the objectives of the renewal are for the continuance of the family business. The fiscal incentives will afford varying fiscal rates in cases where family businesses transfer shares or immovable property to other family members. The fiscal incentives are the following: With respect to duty on the transfer of shares, interests in a partnership, trust or foundation, no account shall be taken of the first €150,000 in assessing the duty chargeable; and For the transfer of immoveable property which is a commercial tenement, only €3.50 duty is to be paid per €100 on the first €500,000 of the value of the property transferred. For the year of 2017 there is a 12-month concession for family businesses. Those family businesses who transfer their business to their children will benefit from a reduction of tax from 5% reduced to 1.5%. For further information on how GVZH Advocates can assist you with your application to register as a family business, kindly contact us on [email protected]

The continuous urbanization and gentrification of the Maltese landscape has augmented the importance of maintaining well-regulated neighbourly relations among residents living in densely populated areas of the Island. The continuous urbanization and gentrification of the Maltese landscape has augmented the importance of maintaining well-regulated neighbourly relations among residents living in densely populated areas of the Island. A common dispute which arises among the owners of units situated within a condominium[1] concerns the maintenance of certain common parts, particularly: 1. The corresponding floors and ceilings which run horizontally between two private units within the condominium, separating them vertically; and 2. The roof of a condominium which runs horizontally between the uppermost privately-owned unit and the upper surface of the building (the roof). If any of these structures requires repairs, who should pay for them and how will the Maltese Courts apportion the expenses among the various condomini[2] [2] Maltese Law & Jurisprudence:- Traditionally, the Maltese Civil Code regulated the matter under Article 423: Where the several storeys or other parts of a building belong to different owners, the contribution of each of the owners to the expense of the repairs or reconstruction which may be required shall be in proportion to the benefit which the respective part of the building derives from such repairs or reconstruction. This Article was interpreted in Emanuel Fenech -vs- Tabib Dottor Anton Mercieca.[3] In this case the plaintiff instituted an action against the other co-owners within his block of apartments for the recovery of expenses in relation to the maintenance of the roof above his apartment. The defendants pleaded, inter alia, that the plaintiff alone should pay for the expenses incurred since the roof of the block formed part of his private ceiling. The Court disagreed with this line of reasoning. While the roof of the building does indeed form part of the ceiling of the uppermost apartment, it is also a vital component of the entire block. However, the Court fell short of applying Article 492 Civ. C.[4] According to this latter Article the expenses would have to be supported by each of the co-owners in proportion to their share of co-ownership in the block (in this case one-eighth of the expenses (1/8th) each since there were eight co-owners). By contrast, in applying Article 423 Civ. C. the Court adopted the following ratio: Considering the reciprocal advantages that the ceiling (held privately) and roof (held pro indiviso) acquire through the maintenance works, the expenses necessary for the occurrence of those works must be divided, as to fifty-percent (50%) by the owner of the uppermost flat (plaintiff), and as to the remaining fifty-percent by all the co-owners together, in equal portions between them. More modern pieces of legislation, namely the Condominium Act,[5] have also adopted this principle. Article 11 of the Condominium Act states: (1) The costs necessary for the preservation, maintenance, ordinary and extraordinary repairs, for the enjoyment of the common parts, for the rendering of services in the common interest and for the alterations agreed upon by the condomini are to be divided between the condomini in proportion to the value of the property of each condominus, saving always any contrary agreement. (2) Where the expenses are made with respect to anything that serves the codomini in an unequal measure, the expenses shall be apportioned in proportion to the use that each one can make. This Article was introduced from the Italian Civil Code's provisions on condominia. In interpreting this Article, the Italian Court of Cassation has held:[6] Within the context of condominia, the principle of division of expenses for the conservation and enjoyment of the common parts, envisaged by the first comma of Article 1123 C.C.[7] does not apply when the thing repaired is destined to serve the condomini in unequal measure. As long as there is no agreement to the contrary, the principle that should apply is the proportionality of expenses and use established by the second comma of that same Article. This dictum was applied in Joseph u Maria konjugi Borg -vs- Emanuel Cauchi et.[8] In that case, the plaintiffs (owners of the uppermost tenement) sued the defendants (owners of the underlying tenement) for their share of expenses incurred in the maintenance of the flooring of the roof. The block was made up of three separate units. The Court began by stating that the maintenance of ceilings is caught by the common obligation of preservation of the condominium by all the condomini.[9] While Article 12 of the Condominium Act regulates the expenses related to a very specific common part, namely the ceiling separating a higher and lower storey of a condominium, Article 11(2) regulates all those other common parts which are structurally essential to the building as a whole and which benefit all the condomini. Applying Article 11(2) to the facts of the case, the Court concluded that the repairs made to the roof of the block, common to all the condomini, benefitted the uppermost flat in greater measure. Considerations of equity required the owner of the uppermost flat to pay a greater share of the expenses incurred in reparation of the roof.[10] Following the same equation laid down in Fenech -vs- Mercieca (reported at Footnote 3 above), the Court decided that plaintiffs were to pay for fifty-percent (50%) of the expenses representing their ownership of the ceiling of their flat, together with one-sixth (1/3 x 1/2 = 1/6) of the expenses relating to the maintenance of the floor of the roof. Defendants were made to pay their respective one-sixth share of the expenses relating to the roof. So far, the cases discussed above deal with the maintenance of the roof in a condominium. The most instructive case governing the maintenance of corresponding ceilings and floors separating privately-owned units is Vella pro. et. noe. -vs- Pauline Mizzi et.[11] Where a ceiling separates two private units horizontally then the expenses must be paid for equally by the owners of the two respective units. This is confirmed by Article 12 of the Condominium Act, which reads: Where a ceiling is a common part and is the ceiling of a lower storey and the floor of a higher storey of a condominium, the costs incurred for the maintenance and ordinary and extraordinary repairs of such ceiling shall be borne as to one-half by the condominus of the lower storey and as to the other half by the condominus of the higher storey. However, if the deterioration or damage to the ceiling/floor was caused by the negligence or fault of one of the co-owners then it is that co-owner who shall pay for the entire maintenance, on the strength of the general principle that whoever causes damage by his own fault to another's property must make good the damage in whole.[12]Moreover, there is nothing barring the two respective owners from reaching an agreement as to the division of expenses, since Article 12 of the Condominium Act is not a rule of public order.[13] On the contrary, the rule in Article 11(2) of the Condominium Act, discussed in the first part of this paper, regarding the equitable division of expenses with respect to things that serve the condomini in an unequal measure cannot be derogated from.[14] [1] A condominium is defined as a building where the ownership of the common parts is vested pro indiviso in two or more persons and the ownership of the various separate units in the building is vested pro diviso in the same two or more persons. This is colloquially referred to as a block of apartments with a common entrance. [2] For the purposes of this paper a condominus is defined as the owner of a private unit within a building containing two or more privately-owned units as referred to in Footnote 1 above. [3] (13/6/1989) Civil Court, Koll. Vol. LXXIII.III.826 [4] Each of the co-owners may compel the others to share with him the expense necessary for the preservation of the common property, saving the right of any of such other co-owners to release himself from his liability therefor by abandoning his right of co-ownership. [5] Cap. 398 of the Revised Edition of the Laws of Malta [6] Cass. N. 6359 del 13 Luglio 1996; Translated from: "In tema di condominio di edifici, il criterio della ripartizione delle spese per la conservazione ed il godimento delle parti comuni, previsto dal primo comma dell' art. 1123 c. c. non si applica quando si tratta di cose destinate a servire i condomini in misura diversa, per la quali, a meno che non vi sia diverso accordo delle parti, il criterio è, invece, quella della proporzionalita` tra spese ed uso stabilito dal secondo comma del medisimo articolo ..." [7] The equivalent of Article 11(1) of the Maltese Condominium Act [8] (12/4/2007) Court of Appeal (Inferior Competence) App. Civ. Nru. 1808/2005/1 [9] "…hi l-fehma ta'din il-Qorti illi t-tibdil ta' soqfa kien ukoll kopert fl-obbligu impost ta' dik il-preservazzjoni li jsemmi l-vot tal-[Artikolu 11(1)], hekk gravanti fuq kull wiehed mill-kondomini ghall-ahjar tgawdija u utilita` ta' l-ambjent komuni." [10] "Huwa indikattiv fil-kaz prezenti illi r-rifaciment tal-bejt tal-blokk, komuni ghal condomini kollha, kien hekk mehtieg ukoll, anke mill-karatteristika strutturali tieghu, fl-interess tar-rimpjazzament tas-saqaf ta' l-appartament l-izjed elevat appartenenti lill-atturi appellanti. La kien hekk, kien sew guridiku kif ukoll ekwu illi l-appellanti jaghmlu tajjeb ghall-ispiza nkorsa f' mizura dizugwali minn dik ta' l-appellanti. Hu ovvju illi fil-kaz ta' preservazzjoni tal-haga, il-kondomini jistghu jibbenefikaw f' mizura diversa, inferjuri jew superjuri skond il-kaz, ghad-dritt taghhom ta' komproprjeta` fuq il-parti komuni. Dan ghaliex fil-kaz in ispejce ix-xoghlijiet li saru assolvew funzjoni duplici. Il-wahda dik tal-konservazzjoni tal-bejt komuni, l-ohra, dik tat-tishih bir-rinforzar ta' saqaf tal-konkos fl-appartament li minnu certament l-appellanti akkwistaw godiment strutturali potenzjali;" [11] (6/10/2004) Court of Appeal (Inferior Competence) App. Civ. 228/2002/1 [12] "[A]vvenuto il danno, la ricerca della causa provocante non deve fermarsi appena accertata la causa diretta, ma bisogna risalire piu` oltre per determinare se vi sia un fattore remoto o causa mediata che potrebbe dimostrarsi la vera "fons et origo mali." Koll. Vol. XXIV.II.712; Where the deterioration is due to natural causes then each condominus must contribute equally to the expenses incurred in repairing the ceiling and floor – Koll. Vol. XLII.II.1120, Koll. Vol. XLIII.II.801 [13] Vide Article 3 of the Condominium Act; If the agreement is contained within a public deed then the consequences of that agreement should be explained to the parties by the Notary publishing the deed. [14] Article 3 [n.13]

Mamo TCV has contributed the Malta chapter to the 2017 online issue of "Dispute Resolution", a yearly comparative law guide published by Getting the Deal Through. Getting the Deal Through was the first legal publication series to present the concept of a "question and answer format". This is a convenient way for law firms, universities, regulators, and corporate counsel at to have at their fingertips a reliable introduction to various subject matters, as regulated in different jurisdictions. The series now covers over 890 practice areas with analysis on more than 150  Mamo TCV has contributed the Malta chapter to the 2017 online issue of "Dispute Resolution", a yearly comparative law guide published by Getting the Deal Through. Getting the Deal Through was the first legal publication series to present the concept of a "question and answer format". This is a convenient way for law firms, universities, regulators, and corporate counsel at to have at their fingertips a reliable introduction to various subject matters, as regulated in different jurisdictions. The series now covers over 890 practice areas with analysis on more than 150 jurisdictions.  The firm's contribution confirms Mamo TCV's leading position in the field of Dispute Resolution. It boasts a strong litigation team, with four partners and 10 associates with experience in specialist subjects. This ensures that any dispute – from a property issue to a multi-million international business claim – can be addressed by litigators with a background in the field. In fact, the firm is engaged in various areas of practice in the litigation sphere covering civil and family law, general commercial law, insurance, public procurement, bank finance, environment and planning, ship and aircraft arrests, debt collection and employment law. The firm also has extensive experience in the sphere of mediation and arbitration. The chapter about Dispute Resolution in Malta can be accessed by clicking on the link below. Anybody interested in obtaining further information is invited to contact Dr. Joseph Camilleri, Dr Franco Vassallo, Dr Stephen Muscat and Dr Frank B. Testa. Reproduced with permission from Law Business Research Ltd. Getting the Deal Through: Dispute Resolution 2017, (published online in August 2017; contributing editor: Sophie Lamb, Latham & Watkins LLP) For further information please visit https://gettingthedealthrough.com/area/9/dispute-resolution-2017