id-dritt Edition XXX Volume 1
2020 Published by Għaqda Studenti tal-Liġi
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Produced and published by Għaqda Studenti tal-Liġi (GħSL), the University of Malta’s Law Students’ Society. Correspondence in relation to this publication should be forwarded to: The Publications Officer / Editor-In Chief, Id-Dritt Room 219, GħSL Office Faculty of Laws University of Malta Msida, Malta or Email us at: publications@għsl.org © Għaqda Studenti tal-Liġi 2020 All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of the copyright holder and the publisher, application for which shall be made to the publisher. Proofreading and editing done by the Editorial Board and the Publications Office. Some articles have been modified for reasons of clarity and/or uniformity. Opinions expressed in Id-Dritt Volume XXX do not necessarily represent the views of the Editorial Board, the Publications Office, the Publications Officer, or Għaqda Studenti tal-Liġi. Printed in Malta by Progress Press Co. Ltd Żona Industrijali, Triq L-Intornjatur, Mrieħel, BKR 3000, Malta Cover and Publication Design by Matthew Charles Zammit ISBN no: 978-9918-9506-1-4
Preface Celine Cuschieri Debono President Għaqda Studenti tal-Liġi
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his Id-Dritt, being the thirtieth edition, is a special one for our organisation. It is a testament to the organisation’s commitment to be at the forefront of legal discussion in a variety of legal fields. This is the legacy that the Għaqda Studenti tal-Liġi’s Publications Office upholds year after year. Throughout the history of this prestigious publication, GħSL has strived to publish academic writing of the highest quality by ensuring that while the high standards of the publication are upheld, the content of the publication is pertinent to contemporary discussion. Indeed, through a brief glimpse at the table of contents, one may immediately note that whilst traditional aspects of the legal sphere have been referred to, other lesser known areas of law are also featured. This is the beauty of Id-Dritt, as it is open to all academics, professionals, or even students themselves, allowing them a forum upon which to discuss areas of interest, whilst sharing their views and knowledge with any other person wishing to learn more about the law. Id-Dritt XXX is no exception. It is my pleasure and honour to present this year’s thirtieth edition which features thirty-one different articles from legal professionals from different fields and a discussion of twenty-one different topics. I would like to thank and congratulate GħSL’s Publications Officer, Justine Xuereb, and her Editorial Team, as well as the organisation’s Public Relations Officer, Matthew Charles Zammit, for designing the publication. Wishing the very best of luck to the persons who will be entrusted with the Publications Office in the future so that the organisation may continue to spearhead academic discussion through this publication.
Celine Cuschieri Debono
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Opening Address Justine Xuereb
Publications Officer Għaqda Studenti tal-Liġi
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n behalf of the GħSL Executive Board, the Publications Committee and its Editorial Board, it is with great honour and pride that I present IdDritt XXX, the commemorative 30th edition of this prestigious legal journal, published annually by the Malta Law Students’ Society. This legal journal has definitely come far since its somewhat humble beginnings in 1944. The hard work and ambition of small number of law students with a passion for legal knowledge has evolved into one of the most sought-after and prestigious legal journals on the island. Such status has been achieved as a result of several factors, most notably, the opportunity it provides for established legal professionals, academic authors as well as students themselves to make known their interests in the legal sphere and contribute their own take on a variety of topics. This is not to say that Id-Dritt has not had its own obstacles to overcome. It is in spite of the challenges posed by time and circumstance that this legal journal has thrived and prospered and continued to provide anyone with an interest in law with a forum in which one may examine prevalent legal questions and issues. New editions of this publication are now released on an annual basis through the combined efforts of both professionals able to contribute a plethora of legal expertise, as well as law students passionate enough to aid in the continuous development of legal knowledge in accompaniment to the various global developments in all facets of life. Unfortunately, the circumstances presented by COVID-19 today prevent us from celebrating this landmark edition in the manner which truly befits the occasion. However, one must not be deterred from putting out the best product possible, and even the most challenging of times present an opportunity for evolution and development. Thus, this edition will be the first of its kind to be published as an eBook, thereby continuing GħSL’s proud tradition of producing annual editions of Id-Dritt, whilst also making the publication more easily accessible to interested parties. This publication marks the 30th edition of this legal journal, thus being a landmark for all involved, throughout both the past and the present. Knowing this, the main goal for this term’s Publications Office was to make this edition a memorable one, befitting the stature and prestige this publication has come to enjoy throughout the years. We were delighted with the overwhelming x
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response received from legal professionals, academics and students, with such response not being domestically limited. As a result of the hard work of all parties involved, this edition boasts a record-breaking thirty-one articles, and has been divided into two volumes, which is a first for the journal. The table of contents to follow further exhibits the variety of responses received to our call for submissions over the term, with twenty-one specialised fields of the legal sphere being delved into overall. Such fields range from the traditional, such as constitutional, criminal and corporate law, to ones which exhibit the law’s concurrent development with other sectors, such as technology law. That being said, these examples in themselves do not begin to describe the vast array of legal knowledge on display in this publication. I would like to thank all contributors for taking the time to contribute to this year’s edition and helping our vision for this commemorative publication come to fruition. It is through your expertise and the sharing of your knowledge in your respective fields that students and other professionals alike may be inspired and reinvigorated to continue to expand their understanding of the law and the principles that reinforce it. I thank you for allowing us to endorse your work, and for helping us maintain the high standard that this publication has now become accustomed to. To the Editorial Board, Cressida, Danielle, David, Ethan, Evgeny, Josela, Jurgen, Lenka, Maria, Marie, the Martinas, Raphael, Sarah, Shelby and Stephanie. I can assure you that the publication of this edition would not have been possible without each and every one of you. Thank you for your great effort and unwavering commitment in ensuring that the final product is of the highest quality. It has been a true pleasure working with all of you, and I can only hope that future committees will emulate your work ethic and willingness to help whenever needed. To Maria, the Editor-In-Chief. Thank you for always being on hand to help in every aspect of this publication. I could not have asked for a better partner in overseeing the finalisation of this product. It has been a privilege working side-by-side with you, and one can only hope that future Editors-In-Chief are as helpful and diligent as yourself. To my direct predecessors, Emma, Matthew Charles and Ariane. You xi
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were the support system that helped me understand the status Id-Dritt enjoys to begin with. Thank you for your patience and guidance; your influence over this publication lives on even following the end of your respective terms in this Office. Special thanks goes to Matthew Charles, who was once again on hand to provide all that was needed in terms of the design of the final product. I truly hope that my successor finds comfort in having the same support system to rely on as I did. To my fellow GħSL Executive Board Members, Celine, Emma, Sean, Matthew Charles, Graziella, Ylenia, Clive, Maya, Michela, Mariah, Martina and Valentina. Thank you for all the help and support you have provided me with throughout this term. To my parents and loved ones. Your patience truly knows no bounds. I could not be more appreciative of all you have done for me throughout the past year. Even the smallest gestures have a special meaning to me. Your endless support has instilled in me the drive and determination to see IdDritt XXX published, and I cannot thank you enough for your integral role in this. And last but not least, to you, dear reader. You are the driving force and the reason behind our annual goal of releasing new editions of this prestigious publication. On behalf of GħSL, I would like to thank you for your interest in Id-Dritt, and hope that this edition’s contents inspire and encourage you to further your legal interests, and perhaps even contribute to future editions. The contributions featured both in this edition as well as the others preceding it are a legacy in themselves. The purpose of a legacy is to leave behind inspiration for others upon which to base their own expeditions and triumphs. This being said, I conclude with a quote by Albert Einstein: ‘Never regard study as a duty but as an enviable opportunity to learn to know the liberating influence of beauty in the realm of the spirit for your own personal joy and to the profit of the community to which your later works belong.’ Thank you,
Justine Xuereb xii
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Foreword Ivan Mifsud
Dean Head of Department, Public Law Faculty of Laws
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hen I was asked to write a foreword for Id-Dritt, I accepted without hesitation. My policy at the Faculty of Laws has always been to help the students in any way possible, and this time is no exception. As part of my preparation, I leafed through the forewords to some past editions of Id-Dritt; amongst the ones I read was the one penned by Her Excellency President Marie Louise Coleiro Preca for Edition XXV. On that occasion she commended GħSL, but also rebuked us, the academics, for not producing a law journal, leaving Id-Dritt as the only academic legal journal published in Malta. Her Excellency undoubtedly has a point, because the Faculty of Laws does not have its own, official academic journal (the Human Rights’ Platform e-journal in my opinion does not qualify as a Faculty of Laws’ official journal because the Human Rights Platform is led by the Faculty of Laws, but is a multi-faculty initiative; therefore its journal cannot qualify as our Faculty of Laws’ journal). I will not mince words: the Faculty of Laws should have its own journal. If just one member from each and every department within the Faculty of Laws contributed an article every year, we would have nine articles as a minimum. It sounds relatively simple, and is certainly doable, leaving plenty of time for other work including contributing to Id-Dritt; after all I would not like to create one law journal and at the same time impoverish another existing, highly respectable one. Yet, without sounding defeatist, I openly and publicly state that I am reluctant to suggest this plan to my colleagues, let alone move towards implementing it. Unfortunately, the Faculty of Laws has found itself at a cross-road, only made worse by COVID-19. The University of Malta policy has for many years opened its doors to as many students as possible, the result being that the intake in October 2019 for LL.B was 217, up from 205 the previous October, which was up from the previous year too; the trend is for numbers of new intakes to grow annually, without fail. It goes without saying that each and every student is welcome and deserves an opportunity to follow their dreams and embark on the career of their choice, but this puts an enormous strain on our human resources (both administrative and academic). We have made numerous pleas for increases in staff, but the trend seems to be for people to leave and not be replaced. Some simply find working at the Faculty of Laws too hectic, others leave to advance their personal lot xvi
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elsewhere, yet others reach retirement age and either leave or remain on as part-timers (still contributing, but on a reduced basis). Sometimes, calls for applications are issued and nobody even applies, because (at least until COVID-19) there were so many seemingly more attractive opportunities available; on other occasions, the University of Malta simply did not issue the calls for applications despite our continuous requests to firstly replace staff, and secondly, to increase staff in order for us to be able to cope better, and to not merely improve, but also increase the services we offer. The end result is that staff (administrative and academic collectively) are shrinking, while numbers of students are increasing. I am not exaggerating when I write that the staff work wonders, way beyond their call of duty, as things are and definitely out of a sense of duty and love for the Faculty, for the Profession, for Academia and for our Students. For this I publicly and unreservedly express my gratitude to all the staff within the Faculty of Laws, whether administrative or academic, whether full-time or part-time, or casual contributors. However, unfortunately, we have reached a stage where if we are to not only retain current standards, but even raise them, something has to give. Certain decisions have already been taken; for example, a decision was taken not to hold vivas for the LLB 4th year students, who are now required to merely hand in their dissertation and wait for their grade. This was a much regretted decision, however organising and actually holding the vivas simply took too much out of our human resources to justify the end. I am aware that most students enjoyed the opportunity to meet us and discuss the work which they took so much pride in producing, and I for one enjoyed meeting the students too, but it took too much out of our human resources to justify repeating in 2020 and beyond. COVID-19 aside, when we took this decision in late 2019, we had no idea that a few months’ later we would be living in fear of contamination from a previously unheard of and still little-known virus, lecturing online via VLE and discussing how to hold end of semester and end of year assessments this year. The decision not to hold vivas for the LL.B. 4s was aimed at conserving our meagre resources. Regretfully, we do not exclude having to take other measures as numbers of students increase, if our human resources do not increase likewise. The bare truth is that I am expecting intake to increase exponentially the coming academic year, with A’levels currently slated for xvii
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September 2020 and students being allowed to start University before they have their results in hand, and before the ones who do not make it sit for their resits and obtain their results. It seems that these are to be allowed to join the course of their choice on a provisional basis; the effect of this on the number of LL.B first years remains to be seen. As always, every single student is welcome, my only demand being that they take their studies seriously, but the effect of the annual increase in intake when the number of lectures and the number of administrative members of staff has not increased and in actual fact has decreased, is not something anybody involved in the runnng of the Faculty of Laws is looking forward to because we are expecting large, unmanageable numbers of students in the first year of the course, the likes of which we have never experienced before. Under the above circumstances, and until the Faculty of Laws is given the resources it so desperately needs, the Faculty of Laws’ official journal like many other ideas we have, will have to wait. In the meantime of course, with the Law being what it is, dynamic and continuously changing, everybody is encouraged to continue to research and to publish, and thankfully this is happening if not as much as I for one would like it to. When I was a student back in the 1990s, I could hardly recall a single local lawbook, and we as students used to buy back editions of Id-Dritt, which was not in publication either and GħSL back in the day was only selling remaining stock of past editions. The situation is very much improved now in terms of publications, with plenty more in the pipeline. Id-Dritt is also in its thirtieth issue, and may I add, what a bumper issue it is, with thirty-one articles covering an array of subjects, penned not only by students but also by professionals, academics and members of the judiciary. The research is alive and well, the contribution to knowledge is real and actual, thanks not only to those who contribute articles but also to those students who in their own personal time work extremely hard to put it all together and bring Id-Dritt to fruition, year after year. Long may this not only continue, but also flourish yet further.
Ivan Mifsud
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Editorial Board Id-Dritt XXX
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Justine Xuereb
Publications Officer
Maria Refalo
Editor-In-Chief
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Cressida Scorfna Danielle Gauci David Chetcuti Dimech Ethan Brincat Evgeny Caruana Jessica Spiteri Josela Psaila Spiteri Jurgen Micallef Lenka Portelli Maria Farrugia Marie Claire Mizzi Martina Calafato Martina Cassar Matthew Camilleri Paula Briffa Raphael Butigieg Sarah Mifsud Shelby Aquilina Stephanie Camilleri Editors
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Executive Board Għaqda Studenti tal-Liġi
2019/2020
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Celine Cuschieri Debono President
Emma-Marie Sammut Vice-President
Marc Dimech
Secretary General
Sean Portelli
Financial Officer
Matthew Charles Zammit
Public Relations Officer
Graziella Schembri
Academic Officer
Shelby Aquilina
Conferences Officer
Michela Galea Seychell
External Relations Officer
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Ylenia Busuttil
International Officer
Clive Aquilina
Leisure Officer
Martina Darmanin
Marketing Officer
Maya Spiteri Dalli
Policy Officer
Mariah Micallef
Projects Officer
Justine Xuereb
Publications Officer
Valentina Cassar
Resources Officer
Sarah Mifsud
Board Member
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Contents
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Administrative Law 3 Kevin Aquilina Legislative recourse to Public Administration Law offences barking up the wrong tree?
Tonio Borg
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The perils of positivist thinking in Public Law
Animal Welfare Law Ariane Aquilina
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Five Freedoms, Five Domains: An analysis of the implementation, or lack thereof, of the Five Freedoms and the Five Domains in the Maltese Animal Welfare Act
Competition and Consumer Law Paul Edgar Micallef
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Act XVI of 2019 - A Missed Opportunity to improve Market Regulation in Malta?
Corporate Law Ryan Dalli
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The liquidator: A straightforward job or a gateway to personal liability?
Luke Mizzi Emma-Marie Sammut
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Can directors and shareholders be held liable for acts committed by the company? xxx
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Constitutional Law Giovanni Bonello 143 21st February 2019 – Black Thursday for the Constitutional Court
Criminal Law Consuelo Scerri Herrera
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Confessions in a Court of Law
Charles Mercieca
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Prosecuting and defending White-Collar Crime
Jessica-Ann Spiteri 209 Dissertation summary of the constitutive elements of the crime of forced marriage punishable under Article 251G of the Criminal Code
Development and Planning Legisation Robert Musumeci
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Planning legislation in Malta - A brief historical overview
Employment Law Krista Ellul
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Employment, and the Gig Economy
Frances Camilleri-Cassar 257 Leave policies and legislation in Malta: How gender equal?
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Environmental Law Nathaniel Falzon
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Conserving our natural environment and sustainability: a legal rendition
Ethan Brincat
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The right to a healthy environment in the Constitution of Malta: Abstract of ‘The Second Republic - A Green One”
Intellectual Property Law Maria Chetcuti-Cauchi
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Malta’s new Trademark Act, and trade secret laws 2019
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Kevin Aquilina Legislative recourse to Public Administration law offences – Barking up the wrong tree?
Kevin Aquilina is the Head of the Department of Media, Communications and Technology Law of the University of Malta. He holds a Doctorate of Philosophy in Law (Ph.D) from the London School of Economics and Political Science of the University of London, a Doctorate in Law from the University of Malta (LL.D) and a Masters in International Maritime Law from the International Maritime Organisation’s International Maritime Law Institute (LL.M). Professor Aquilina has held the office of Director General (Courts) and subsequently Chief Executive of the Broadcasting Authority. He drafted all broadcasting legislation between 1999 to 2013. Between 2011 and 2019, he was the Dean of the Faculty of Laws at the University of Malta. He also served as the Chairman of the Press Ethics Commission, Chairman of the Planning Appeals Board, Legal Advisor to the Planning Appeals Board, Member of the Environment and Planning Review Tribunal, Member of the Law Commission and Member of the Holistic Commission for the Reform of Justice Sector. Professor Aquilina has authored various books, written several reports for Maltese and foreign institutions, drafted many primary and subsidiary laws and published papers in edited books and articles in peer-reviewed journals, apart from various contributions to the print, broadcasting and new media.
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1. Introduction
F
ollowing the enactment of the Commissioners for Justice Act, Chapter 291 of the Laws of Malta, in 1981, Maltese Law began to recognise what is today commonly known in Administrative Law as the institute of Administrative Offences. The latter are totally distinct from other offences hitherto established under other branches of Public Law and, needless to say, are quite different from civil damages occasioned by civil wrongs. Administrative offences, though forming part of Public Law, are creatures of Administrative Law. But are they here to stay or are they a transient institute of Administrative Law? What makes them unique in Maltese Law? Why is the legislature having more and more recourse to administrative offences to such an extent that it has been developing considerably this institute instead of having resort to other forms of Public Law offences, notably criminal offences? The purpose of this Article is to compare and contrast administrative offences to other offences contained in Public Law and civil damages in Private Law, and attempt to understand when the legislature thinks that it is best to appropriately utilise administrative offences in lieu of other Public Law offences in the Maltese legal system.
2. Public Law and Private Law Contrasted There are two principal distinctions which need to be drawn when comparing Public Law and Private Law: a first distinction is arrived at latu sensu (in the broad sense), a second distinction is obtained stricto sensu (in the narrow sense). First, a broad distinction has to be made between Public Law offences and Private Law damages. The latter two categories owe their origin to the difference between the two main branches of Maltese Law – Public Law and Private Law. Second, a narrow distinction emerges between offences within Public Law itself. 2.1 Public Law and Private Law Distinguished It is given that Public Law and Private Law are distinct branches of Maltese 4
Administrative Law Law. Yet, there are indeed quite a number of differences between Public Law and Private Law. A compare and contrast approach reveals, inter alia, the following variances: • In Public Law, human rights infringements can only be committed by the State, not by persons. Persons, qua natural or artificial (as distinct from persons acting as state functionaries), cannot breach human rights, though they can still cause harm and be actionable for damages under Private Law. In Private Law, an action for damages can be instituted by a person both against the State and another person. • Human rights violations are normally enforced against the State and, when enforced civilly against a person, they are so enforced against that person in a State functionary capacity. • Criminal, Administrative and Environmental Law1 sanctions apply normally in the realm of Criminal, Administrative and Environmental Law respectively. In the case of Private Law, damages, interest and costs apply instead. This means that private wrongs are never punished by the ultimate penal sanction – imprisonment. • The punishments imposed for a criminal, administrative and environmental offences are at variance with those inflicted in the case of the perpetration of a civil wrong. • In Public Law there are instances where criminal, administrative and environmental offences are kept on record for the lifetime of the perpetrator. Thus, the Conduct Certificates Ordinance, Chapter 77 of the Laws of Malta, consists of the criminal conduct of a sentenced person. In broadcasting, the Broadcasting Authority keeps a register of (administrative) broadcasting law infringements committed by broadcasters.2 No such record 1 Administrative and Environmental Law are two instances of a broader branch of the law – Regulatory Law – where non-criminal and non-civil offences are created and punished. 2 Broadcasting Act, Chapter 350 of the Laws of Malta, Fifth Schedule, paragraph 3. Although this paragraph does not oblige the Authority to hold such a register, administrative practice has been to this effect in order to determine the administrative behaviour of a licensee who might have already been found guilty by the Broadcasting Authority of an administrative offence and an increase in penalty awarded in terms of the said Schedule.
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exists for civil offences other than court judgements which might have declared that a civil wrong was committed and/or damages quantified/inflicted. • The Public Law action is distinct from the Private Law action. One and the same conduct may give rise to more than one action – the Public Law action and the Private Law action. But the remedy afforded differs according to the nature of which action is instituted. • The Public Law action (and remedy) may be multiple whilst the Private Law action (and remedy) is usually singular. Hence, under Public Law there may be a number of remedies for one and the same wrong that may be resorted to, ranging from an actio popularis; recourse to the Ombudsman, a special tribunal, the Courts, and the House of Representatives. All these remedies may be exercised successively (rather than concurrently) on the failure of each and every one of them. • The State is always involved in a Public Law action. In the case of Private Law, the State’s involvement is next to none. • The State – through its agents – enjoys privileges and immunities from legal action that a person (biological or artificial) does not enjoy, e.g. diplomatic, parliamentary and procedural privileges and immunities. • Litigation costs in Public Law are borne by the State; litigation costs in Private Law – except where legal aid is employed – are forked out by private persons. • Public Law is hierarchically superior to Private Law and when there is a conflict between the two, it is the former that prevails. • The Constitution – the fundamental, basic, organic and systemic law of a country – is a Public Law instrument. All laws (primary and delegated; Public or Civil) owe their origin thereto.
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• Public Law is the legal source of authority from which Private Law emanates. • Private Law is the product of Public Law but Public Law is not the consequence of Private Law. • Private Law actions are decided by Public Law organs (courts, tribunals, and arbitrators) or mediated before Public Law appointed mediators. Hence, in Private Law, there exists no Private Law superior authority to the parties to a dispute – the latter must perforce have recourse to Public Law institutions. • Public Law actions tend to be normally extinguished on the death of the party concerned. Private Law actions can be inherited on the death of the party concerned. • Public Law rights normally cannot be renounced3; in certain determinate situations, Private Law allows private rights to be renounced (or, if not totally renounced, altered). • Public Law aims at cohesion, consistency and uniformity in its application in society as it applies indiscriminately to one and all, unless provided otherwise by statute; Private Law can be arbitrary as the parties may in determinate circumstances agree to follow it, ignore it, or change it. • Public Law rights are not normally changed except through the volition of the legislator (unless, of course, a law would have passed into desuetude when changed by the people); Private Law rights may be changed by the parties in terms of law.4 • The State is predominantly the subject of Public Law; a person is predominantly the subject of Private Law. There are of course limited exceptions here, such as when the State acts as a ‘private’ rights holder when suing in a civil court to recoup 3 There are exceptional cases where a Public Law right may be renounced or where Public Law rights are not enforced at the demand of the victim of a crime or where a complaint of the injured party is required for the institution, continuation, and completion of the criminal action. 4 Even this suffers exceptions. For instance, spouses cannot agree not to educate, cloth, maintain and take care of their children.
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tenancy dues or fees (charges, dues, taxes, contributions, etc.), or when a person is instituting an actio popularis to annul an unconstitutional law enacted by Parliament. • Public Law upholds the public interest (collective rights and the common good); Private Law upholds individual rights. Thus, whilst in the case of Public Law, the wrong done is punished through an offence (howsoever classified), in the case of a civil wrong it is punished through the infliction of civil damages. However, there is not one single type of Public Law offence in the same way that there is not one sole type of civil damage in Private Law.5
2.2 Public Law Offences Distinguished Public Law affords a diversified typology of offences. These range from criminal offences to military offences, disciplinary offences to environmental offences and of course, the administrative offence. It is therefore pertinent to differentiate between: (a) a criminal offence and an administrative offence; (b) a criminal offence and a military offence; (c) a criminal offence and a disciplinary offence; (d) an administrative offence and a disciplinary offence; and (e) a criminal offence and an environmental offence.
5 It is not the purpose of this paper to investigate the various forms of damages which may be inflicted.
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3. Distinction between Administrative Offence
a
Criminal
Offence
and
an
An administrative offence is different in nature from a criminal offence.6 They diverge from each other for the following reasons: (a) whilst a criminal offence is prosecuted by the Attorney General in the Superior Courts of criminal jurisdiction and by the Executive Police in the Inferior Courts of criminal jurisdiction, an administrative offence is generally not prosecuted in the criminal law sense of the term because the procedure followed in the case of an administrative offence is that there is no Prosecutor and no person charged and the procedure is civil in nature, except in the case of the Commissioners for Justice Act where the criminal offence has been depenalised; (b) whilst a criminal offence is heard and determined by a court of criminal jurisdiction, an administrative offence is heard and determined by an administrative body or a public officer and, should there be a right of appeal from the decision of that body or officer, the appeal is normally lodged to a quasi-judicial body with, if so allowed by law, a further appeal to a court of civil jurisdiction, normally the Court of Appeal sitting in either its Superior or Inferior Competence, as the case may be, or, exceptionally, to the Civil Court, First Hall; (c) whilst in the case of a criminal offence, the punishments which may be imposed include a punishment of imprisonment or detention, that is a punishment which is restrictive of personal liberty. No such punishment may be imposed in the case of an administrative offence; (d) whilst in the case of a criminal offence, record of that offence 6 The juridical nature of administrative offences is further discussed in Kevin Aquilina, ‘The Juridical Nature of Admistrative Measures’, Law and Practice, Valletta, the Malta Chamber of Advocates, Issue 11, December 2005, pp. 29-41; ‘Old Wine in New Bottles: Shifting the Criminal Sanction into Administrative Law – Part I,’ Law and Practice, Issue 12, June 2006, pp. 33-45 and ‘Old Wine in New Bottles: Shifting the Criminal Sanction into Administrative Law – Part II’, Law and Practice, Issue 13, October 2006, pp. 28-35; and the Editorial ‘Administrative Offences in the Light of Human Rights Law’, Mediterranean Journal of Human Rights, Vol. 15 (Double Issue), 2011, pp. 7-10.
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may, in certain determinate cases be registered in one’s conduct certificate in terms of the Conduct Certificates Ordinance (as explained in paragraph (e) below) and/or in the register of sexual offences and other offences of serious violence in terms of the Protection of Minors (Registration) Act,7 no such registration normally takes place in the case of an administrative offence. Hence, whilst an employer may have information on a prospective employee’s criminal record, no such information can be made available to an employer in relation to an administrative offence in so far as these are unregistered; (e) when dealing with criminal offences, the Criminal Code8 distinguishes between two types of fines: multa and ammenda in Article 7 thereof. Article 7(1) states that one of the punishments for a crime is a fine to be known as a multa whilst Article 7(2) provides that one of the punishments for a contravention is also a fine to be known as an ammenda. The consequences of this distinction are borne out in Articles 11 and 13 of the Criminal Code: a multa is converted into imprisonment; an ammenda is converted into detention; the maximum for a multa (unless otherwise provided for) is one thousand, one hundred and sixty-four euro and sixty-nine cents whilst the maximum for an ammenda is fifty-eight euro and twenty-three cents; the minimum of a multa (unless otherwise provided for) is twentythree euro and twenty-nine cents whilst the minimum of an ammenda is six euro and ninety-nine cents. A multa is converted into imprisonment at the rate of one day for every thirty-five euro (subject to exceptions) but cannot exceed two years imprisonment, whilst an ammenda is converted into detention at the rate of eleven euro and sixty-five cents but cannot exceed one month’s duration. Other consequences derive from this distinction for instance in the Conduct Certificates Ordinance in terms of which a contravention is not entered at all into a conduct certificate9 whilst a crime is normally so entered but in the case of minor crime a period of time has to elapse before it is no longer registered in a conduct certificate;10 7 8 9 10
Protection of Minors (Registration) Act, Chapter 518 of the Laws of Malta. Criminal Code, Chapter 9 of the Laws of Malta. Conduct Certificates Ordinance, Chapter 77 of the Laws of Malta, Article 5(a). ibid, Articles 6 to 9 and Second and Third Schedules.
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(f) Insofar as an administrative pecuniary penalty is concerned, the Commissioners for Justice Act follows the same distinction between a multa and an ammenda mainly because the administrative offences brought before a Commissioner for Justice are depenalised criminal offences. But in both the case of a multa or an ammenda inflicted by a Commissioner for Justice, the penalty in question is always collected through civil process. However, in other cases, such as in the case of Article 15 of the Eco-Contribution Act,11 no such distinction is made between a multa and an ammenda. In fact this provision refers to the administrative penalty as a ‘fine’ and as a ‘multa’. But Article 18(2) further provides that if the penalty due is not paid, it constitutes an executive title for the purposes of the Code of Organisation and Civil Procedure;12 (g) in the case of a multa imposed for a criminal offence, the multa can be converted into imprisonment if left unpaid; on the other hand, a multa inflicted as a punishment for an administrative offence is levied by civil (not criminal) process and hence there is no conversion into imprisonment. Hence, although the term multa may be used in a law, it is not necessarily indicative that such a multa is being awarded as a result of a criminal offence. As will be discussed below, a multa may also be inflicted in the case of a military offence, the latter not being classified as a criminal offence; (h) the punishments to be inflicted in relation to an administrative offence have developed independentlyofthe punishment inflicted for a criminal offence even if, to a certain extent, the latter has been inspired by the former. Punishments awarded for administrative offences include both pecuniary and non-pecuniary penalties. Pecuniary penalties comprise: (i) a penalty (sometimes also referred to as a ‘fine’),13 11 Eco-Contribution Act, Chapter 473 of the Laws of Malta, Article 15. 12 Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta, Article 18(2). 13 For instance, the Broadcasting Act, Chapter 350 of the Laws of Malta, Article 41(4) (c), Development Planning Act, Chapter 356 of the Laws of Malta, Article 58, Companies Act, Chapter 386 of the Laws of Malta, Article 427(2) and the Eleventh Schedule, Insurance Business
11
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(ii) an additional penalty,14 (iii) a daily penalty for a continuing infringement,15 (iv) a suspended penalty,16 (v) a compromise penalty,17 (vi)
penalty notices (on the spot penalties),18 19 (vii) an amount due for renewal of a licence,
(viii) interest charges inflicted for late payment,20 Act, Chapter 403 of the Laws of Malta, Article 67(6), Insurance Brokers and Other Intermediaries Act, Chapter 404 of the Laws of Malta, Article 3(3)(d), Occupational Health and Safety Authority Act, Chapter 424 of the Laws of Malta, Article 38(3), Lotteries and Other Games Act, Chapter 438 of the Laws of Malta, Article 68, Malta Statistics Authority Act, Chapter 422 of the Laws of Malta, Article 43(1), and Trading Licences Regulations, Regulation 51, 2002 (L.N. 102 of 2002). 14 Commissioners for Justice Act, Chapter 291 Laws of Malta, Articles 5(4) and 10(2). 15 Companies Act, Chapter 386 of the Laws of Malta, Article 427(2) and the Eleventh Schedule, Insurance Business Act, Chapter 403 of the Laws of Malta, Article 67(6), Insurance Brokers and Other Intermediaries Act, Chapter 404 of the Laws of Malta, Article 3(3)(e), Value Added Tax Act, Chapter 406 Laws of Malta, Article 39(1)(b) and (2)(b), Malta Statistics Authority Act, Chapter 422 of the Laws of Malta, Article 43(2), Telecommunications (Administrative Fines and Sanctions) regulations, regulation 7(1), 2002 (L.N. 231 of 2002), and the Second Schedule to the Fines and Penalties for Offences Regulations, 2003 (L.N. 357 of 2002 as amended by L.N. 386 of 2003). 16 For instance, Broadcasting Act, Chapter 350 of the Laws of Malta, Article 41(4)(c). 17 For instance, Broadcasting Act, Chapter 350 of the Laws of Malta, Article 41(5), Development Planning Act, Chapter 356 of the Laws of Malta, Article 58(2), Value Added Tax Act, Chapter 406 of the Laws of Malta, Article 84, Malta Travel and Tourism Services Act, Chapter 409 of the Laws of Malta, Article 45(2), Environment Protection Act, Chapter 435 of the Laws of Malta, Article 26, Lotteries and Other Games Act, Chapter 438 of the Laws of Malta, Article 68(2) and Animal Welfare Act, Chapter 439 of the Laws of Malta, Article 47. 18 In the case of an on-the-spot penalty, the Commissioners for Justice Act, Chapter 271 of the Laws of Malta, Article 14(2), provides that any police officer and any other officer, authority or person charged with the responsibility for law enforcement may hand over to the offender a notice containing a general description of the offence, the penalty to be paid, the place where it can be paid, the period for payment and the consequences of non-payment. Vide also the Traffic Regulation Ordinance, Chapter 65 of the Laws of Malta, Article 62(2), and the Traffic Offence Ticket Regulations, 1981 (L.N. 52 of 1981; S.L. 65.09). 19 Traffic Regulation Ordinance, Chapter 65 of the Laws of Malta, Article 57(2) empowers the Malta Transport Authority to collect as a civil debt the amount due for renewal of a motor vehicle licence. 20 Income Tax Management Act, Chapter 372 of the Laws of Malta, Article 44, and the Value Added Tax Act, Chapter 406 of the Laws of Malta, Article 21(4).
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(ix)
expenses to remedy the administrative offence,21
consequences
of
an
(x) expenses incurred by the competent authority in publishing naming and shaming statements or notices22 and other publications,23 and in inspecting documents,24 and (xi) failure to pay licence fees, to notify the competent authority with certain information required by law and to appoint/change auditors.25 Non-pecuniary sanctions include the following: (i) warning,26 (ii) naming and shaming27 or censure,28 (iii) putting a broadcasting radio or television station off air for a specified period of time,29 (iv) revocation, modification or suspension of a licence,30 (v) non-renewal of a licence pending settlement of a fine 21 Commissioners for Justice Act, Chapter 291 of the Laws of Malta, Article 10(4). 22 Insurance Business Act, Chapter 403 of the Laws of Malta, Article 28(5). 23 Restoring a name struck off the brokers register or the brokers list under the Insurance Brokers and Other Intermediaries Act, Chapter 404 of the Laws of Malta, Article 18, and striking names off the sub-agents company registers or the sub-agents list under the Insurance Brokers and Other Intermediaries Act, Chapter 404 of the Laws of Malta, Article 35(5). 24 Insurance Business Act, Chapter 403 of the Laws of Malta, Article 30(6). 25 Fine and Penalties for Offences Regulations, Regulation 3(2) and Second Schedule, 2002 (L.N. 357 of 2002). 26 Broadcasting Act, Chapter 350 of the Laws of Malta, Article 41(4)(a). 27 Broadcasting Act, Chapter 350 of the Laws of Malta, Article 41(7), the Insurance Business Act, Chapter 403 of the Laws of Malta, Article 28(4), and Prevention of Financial Markets Abuse Act, Chapter 476 of the Laws of Malta, Article 22(3). 28 Financial Markets Act, Chapter 345 of the Laws of Malta, Article 20(3). 29 Broadcasting Act, Chapter 350 of the Laws of Malta, Article 41(4)(b). 30 Postal Services Act, Chapter 254 of the Laws of Malta, Article 63, Broadcasting Act, Chapter 350 of the Laws of Malta, Article 16(4), and Development Planning Act, Chapter 356 of the Laws of Malta, Article 39A(1).
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ammenda) awarded by a court,31 or a quasi-judicial tribunal32 or the public administration,33 (vi) forfeiture of any object used in the commission of an offence,34 and (vii) remedying the offence;35 (i) a criminal offence is extinguished by the death of the offender but an administrative offence need not necessarily be so extinguished unless there is a specific rule to that effect; (j) criminal offences are aimed at the most heinous crimes on the statute book. Administrative offences are on the other hand used to deter minor infringements of the law. In certain cases, non-compliance with an administrative order can lead to the commission of a criminal offence but not vice-versa; and (k) criminal offences are regulated by the right to a fair and public trial whilst administrative offences are not fully regulated by this human right.
31 Trading Licences Act, Chapter 441 of the Laws of Malta, Article 32. 32 Traffic Regulation Ordinance, Chapter 65 of the Laws of Malta, Article 56, reads as follows: Where any fine (multa or ammenda) is awarded by a court of criminal jurisdiction, or where a Commissioner for Justice has made an order for the payment of a penalty under the provisions of the Commissioners for Justice Act, in connection with any offence under this Ordinance committed by the use of any motor vehicle, and such fine or penalty, as the case may be, has not been paid, the Authority shall withhold from renewing that motor vehicle’s road licence on the expiry thereof until such time as the payment of the fine or the penalty is effected. 33 Radiocommunications (Penalties and Voluntary Settlement of Disputes Procedures) Regulations, Regulation 5, 2004 (L.N. 439 of 2004). 34 Commissioners for Justice Act, Chapter 291 of the Laws of Malta, Article 10(2)(3). 35 Broadcasting Act, Chapter 350 of the Laws of Malta, Article 41(5), the Development Planning Act, Chapter 356 of the Laws of Malta, Article 58(2), Malta Travel and Tourism Services Act, Chapter. 409 of the Laws of Malta, Article 45(2), Malta Communications Authority Act, Chapter 418 of the Laws of Malta, Article 31, Data Protection Act, Chapter 440 of the Laws of Malta, Article 42, the Sports Act, Chapter 455 of the Laws of Malta, Article 54(3), and the Medicines Act, Chapter 458 of the Laws of Malta, Article 100(1)(3).
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4. Distinction between a Criminal Offence and a Military Offence A military offence, although it has the semblance of a criminal offence, in fact is not referred to as a criminal offence. Whilst criminal offences are created by the Criminal Code and other special laws of a criminal nature, military offences are established only by one enactment – the Malta Armed Forces Act.36 Indeed, Part III of the latter enactment, in Articles 37 to 75, contains a list of military offences. Nevertheless, the Malta Armed Forces Act distinguishes between a military offence and a civil offence. The latter are regulated by Article 75 of the said enactment. However, civil offences as understood by the Malta Armed Forces Act are not strictly speaking ‘civil’ in the sense of a Private Law civil wrong but, on the contrary, are fully fledged criminal offences committed by any person subject to military law. So one has to be very careful not to confuse terminology for the Malta Armed Forces Act Article 75, which uses the term ‘civil offence’, as defined in Article 2(1) of the Malta Armed Forces Act, as meaning ‘an act or omission punishable by the law of Malta or which, if committed in Malta, would be punishable by that law’, in the sense of a criminal offence. The punishments inflicted for military offences vary from those awarded for criminal offences. Further, the punishments for criminal offences (that is, crimes and contraventions) are listed in the Criminal Code. Crimes are punished through imprisonment, solitary confinement, interdiction and a fine (multa) whilst contraventions attract the punishments of detention, fine (ammenda), or reprimand or admonition. Punishments for military offences are listed in Articles 76 to 79. They vary according to rank. In the case of officers, these are: (a) imprisonment for life; (b) imprisonment for a term not exceeding twenty-five years; (c) cashiering; (d) dismissal from the service; (e) forfeiture in the prescribed manner of seniority of rank; 36
Malta Armed Forces Act, Chapter 220 of the Laws of Malta.
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(f) fine; (g) severe reprimand or reprimand; (h) where the offence has occasioned any expense, loss or damage, stoppages. In the case of other ranks, these are: (a) imprisonment for life; (b) imprisonment for a term not exceeding twenty-five years; (c) dismissal with disgrace from the service; (d) dismissal from the service; (e) detention for a term not exceeding two years; (f) where the offender is on active service on the day of the sentence, field punishment for a period not exceeding ninety days; (g) in the case of a warrant officer or non-commissioned officer, reduction in the ranks or any less reduction in rank; (h) in the case of a warrant officer or non-commissioned officer, forfeiture in the prescribed manner of seniority or rank; (i) where the offence is desertion, forfeiture of service; (j) where the offender is on active service on the day of the sentence, forfeiture of pay for a period beginning with the day of the sentence and not exceeding ninety days; (k) fine; (l) in the case of a warrant officer or non-commissioned officer, severe reprimand or reprimand; 16
Administrative Law
(m) where the offence has occasioned any expense, loss or damage, stoppages. It is to be noted that in the Maltese version of Articles 76 and 77, fine is translated as multa not ammenda and is regulated by Article 79. Furthermore, Article 78 sets out field punishments. Even the subjects of military law, that is, the perpetrators of a military offence, are different from persons accused or charged with a criminal offence. The former are ‘persons subject to military law’. This expression is defined by Article 178 of the Malta Armed Forces Act as including officers of the Malta Armed Forces, men37 of the Armed Forces, and any other person who, though not an officer or man of the force, is employed in government service or is in receipt of a pension in respect of service in the regular force. Thus, military offences can only be committed by persons subject to military law, not by civilians. Furthermore, the procedure for adjudicating a military offence is different from that of a criminal offence. Indeed, a charge for a military offence can be dealt with summarily or by court-martial.38 In the former case, it is the appropriate superior authority or the commanding officer of the person charged with a military offence who deals with the offence.39 In the latter case, the court-martial consists of persons subject to military law.40 Civilians, whether judges or magistrates, do not sit in a court-martial. However, it is possible to appeal the sentence of a court-martial to the Court of Criminal Appeal sitting in its superior competence.41 In terms of Article 114 of the Malta Armed Forces Act, a finding or sentence of a court-martial may be reviewed by the President of Malta or by a judge designated by the President for this purpose. Nonetheless, this procedure applies only where no appeal is lodged to the Court of Criminal Appeal or where such an appeal has been lodged either on a finding or sentence and either that finding or sentence has not been appealed before the Court of Criminal Appeal.42 Finally, the Commander of the Malta Armed Forces may reconsider sentences of imprisonment or detention, where remission is justified, 37 38 39 40 41 42
Men includes women. Malta Armed Forces Act, Chapter 220 of the Laws of Malta, Article 83. ibid. ibid., Articles 92-94. ibid., Article 116. ibid., Article 114(3).
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whether in whole or in part.43 In the case of a criminal offence, it is only the courts of criminal jurisdiction which can take cognizance thereof, whether they are courts of original instance or appellate instance. Criminal offences do not admit of an adjudicating authority which is not a court as is the case with a court-martial or a tribunal.
5. Distinction between a Criminal Offence and a Disciplinary Offence Not all offences of a disciplinary nature enjoy the same legal status. There are disciplinary offences where are statutory, that is, they are established by law. Such is the case with the Police Act44 and the Discipline in the Public Service Commission Regulations.45 There are other disciplinary offences which are non-statutory, that is, they are not established by law. Such is the case with regard to collective bargaining where the employer and employees (the latter through their trade union or unions) come together to draw up a collective agreement and list the disciplinary offences and the procedure to be followed when hearing and determining disciplinary procedures including the establishment of a disciplinary board to hear these cases, its composition, powers, procedure, punishments to be inflicted and any appeal mechanism therefrom which might apply. The non-statutory disciplinary offences fall more within the realm of Employment Law. The statutory disciplinary offences fall more within the remit of Administrative Law in so far as the public administration is concerned, though, they are distinguished from administrative offences. The European Court of Human Rights has commented as follows on this distinction: All the Contracting States make a distinction of long standing, albeit in different forms and degrees, between disciplinary proceedings and criminal proceedings. For the individuals affected, the former usually offer substantial advantages in comparison with the latter, for example as concerns the sentences passed. Disciplinary sentences, in general less severe, do not 43 ibid., Article 115. 44 Police Act, Chapter 164 of the Laws of Malta. Disciplinary offences are found in Articles 31 to 33 and in the Third Schedule.. 45 Disciplinary Procedure in the Public Service Commission Regulations, Subsidiary Legislation 0.03. The procedure followed in disciplinary cases in the public service is discussed in Kevin Aquilina, ‘Key Elements to Ensure a Legally Valid Process in Internal Disciplinary Procedures’, Id-Dritt, Vol. XXV, 2015, pp. 3-22.
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appear in the person’s criminal record and entail more limited consequences. It may nevertheless be otherwise; moreover, criminal proceedings are ordinarily accompanied by fuller guarantees.46
6. Distinction between an Administrative Offence and a Disciplinary Offence Although, as stated above, both an administrative offence and a disciplinary offence may, in determinate cases, fall to be regulated by administrative law, the two categories of offences are not identical to each other. The juridical nature of an administrative offence differs from that of a disciplinary offence because in the former case, the accused is normally a third party extraneous to the administrative body which will adjudicate upon the administrative offence whilst in the latter case, the accused is normally an officer of the administrative body concerned. Even the punishments differ in nature. Disciplinary offences can include punishments related to demotion in rank, loss of seniority, postponement of increments, suspension from service, and outright dismissal. Administrative offences do not incur such punishments. In the case of administrative offences, the punishments vary from some sort of pecuniary fine, howsoever called, and some other punishment which does not however involve loss of liberty as is the case with a suspension, reduction in time or withdrawal of an authorisation, permit, permission or some other form of licence, howsoever designated. In Maltese Criminal Law, the expression ‘criminal offence’ has got its own peculiar meaning which distinguishes it from foreign jurisdictions which use different terminology to define a criminal offence such as a ‘crime’. Thus, the term ‘crime’ as used in Maltese Criminal Law excludes contraventions whilst in certain foreign jurisdictions ‘crime’ refers to both crimes and contraventions. What is to be borne in mind is that in Malta, a criminal offence and a crime are neither tautologous nor coterminous; a crime is a more heinous form of a criminal offence as distinguished from a contravention which is a minor offence in nature. This distinction has to be kept in mind also when studying the decisions of the European Court of Human Rights which refer to a 46 Engel and Others v. The Netherlands, European Court of Human Rights (8 June 1976). Application no. 5100/71; 5101/71; 5102/71; 5354/72; 5370/72, paragraph 80.
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‘criminal charge’. The leading Strasbourg Court decision in this respect is the above cited Engel and Others v. The Netherlands. In that landmark decision, the Court held that: The Convention without any doubt allows the States, in the performance of their function as guardians of the public interest, to maintain or establish a distinction between criminal law and disciplinary law, and to draw the dividing line, but only subject to certain conditions. The Convention leaves the States free to designate as a criminal offence an act or omission not constituting the normal exercise of one of the rights that it protects. This is made especially clear by Article 7. Such a choice, which has the effect of rendering applicable Articles 6 and 7, in principle escapes supervision by the Court.47 It went on to define the constitutive elements of a criminal charge as follows: In this connection, it is first necessary to know whether the provision(s) defining the offence charged belong, according to the legal system of the respondent State, to criminal law, disciplinary law or both concurrently. This however provides no more than a starting point. The indications so afforded have only a formal and relative value and must be examined in the light of the common denominator of the respective legislation of the various Contracting States. The very nature of the offence is a factor of greater import. When a serviceman finds himself accused of an act or omission allegedly contravening a legal rule governing the operation of the armed forces, the State may in principle employ against him disciplinary law rather than criminal law. In this respect, the Court expresses its agreement with the Government. However, supervision by the Court does not stop there. Such supervision would generally prove to be illusory if it did not also take into consideration the degree of severity of the penalty that the person concerned risks incurring. In a society subscribing to the rule of law, there belong to the “criminal” sphere deprivations 47
ibid., paragraph 81.
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of liberty liable to be imposed as a punishment, except those which by their nature, duration or manner of execution cannot be appreciably detrimental. The seriousness of what is at stake, the traditions of the Contracting States and the importance attached by the Convention to respect for the physical liberty of the person all require that this should be so ...48 Thus, the European Court of Human Rights has established a threefold classification of a criminal charge: (a) the classification of the alleged breach of domestic law, that is, how does the domestic law categorise that offence; (b) the scope of the violated norm; (c) the nature and severity of the penalty.49 Disciplinary measures are not considered to constitute an administrative act.50 They can of course be applied by the administration against its own employees51 or by a competent organ of the public administration52 against the members of certain professions. Nonetheless, certain disciplinary sanctions are not considered to fall within the definition of an administrative act as contained in Article 469A(2) of the Code of Organisation and Civil Procedure. In fact, this Article specifically excludes in their respect ‘any measure intended for internal organisation or administration’ within the public authority.53 48 ibid., paragraph 82. 49 For an explanation of these criteria see, Dovydas Vitkauskas and Grigoriy Dikov, Protecting the Right to a Fair Trial under the European Convention on Human Rights, Strasbourg, Council of Europe, 2012, pp. 16-12, available at: <http://www.coe.int/t/dgi/hr-natimplement/ Source/documentation/hb12_fairtrial_en.pdf>. 50 An administrative act, according to the Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta, Article 469A(2) ‘includes the issuing by a public authority of any order, licence, permit, warrant, decision or a refusal to any demand of a claimant’. 51 Such is the case under the Disciplinary Procedure in the Public Service Regulations, 2000 (L.N. 186 of 1999, S.L. Const. 03). 52 For instance, the Notarial Profession and Notarial Archives Act, Chapter 55 of the Laws of Malta, Articles 110 to 145 the Commission for the Administration of Justice Act, Chapter 369 of the Laws of Malta, Article 3, the Health Care Professions Act, Chapter 464 of the Laws of Malta, Articles 31 to 41, the Social Work Profession Act, Chapter 468 of the Laws of Malta, Article 9 and the Psychology Profession Act, Chapter 471 of the Laws of Malta, Article 9. 53 The public authority is defined as meaning ‘the Government of Malta, including its Ministries and departments, local authorities and any body corporate established by law’.
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7. Distinction between Environmental Offence
a
Criminal
Offence
and
an
A novel feature of environmental offences is the ‘compromise penalty’, which can be inflicted upon the alleged offender following his/her own express agreement thereto as is the position, for instance, under Article 26 of the Environment Protection Act and Article 38(3) of the Occupational Health and Safety Authority Act. If no such agreement is reached between the would-be offender and the regulator, then the latter cannot inflict an environmental penalty but must have recourse to the criminal action through the Commissioner of Police. In the case of a criminal fine there is no need for the court to obtain the offender’s concurrence before inflicting the said fine.
8. Overlapping of Public Law Offences Due to their variegated nature of Public Law, offences can overlap such that a person may be accused of different offences at one and the same time or at different intervals, e.g. a criminal offence and an administrative offence. Whilst in the case of overlapping criminal offences the matter is by and large settled through the application of the ne bis in idem principle, a vexed problem arises when the overlap is not between criminal offences but between a criminal offence, on the one hand, and any other type of offence, including an administrative offence, on the other. Here the waters are murkier,and the Strasbourg Court still has to define the contours of when to apply or not the ne bis in idem principle in relation to non-criminal offences.
9. Reasons Why Administrative Offences are Resorted to Whilst administrative offences are a distinct and separate category of offences in Public Law with their own peculiar characteristics and nuances, still it is not clear why the legislator resorts to their adoption in statutory law in lieu of other offences (such as criminal offences) or the liquidation of damages for civil wrongs. In the absence of any statutory guidance as to which type of offence is to be incorporated into a statute, it is only possible to attempt to surmise these reasons for the legislative creation of administrative 22
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offences, in lieu of other offences, through a study of statutory law. Possibly the reasons comprise the following: (a) administrative offences are faster to determine as they do not involve recourse to the courts of criminal jurisdiction which take more time to decide pending litigation; (b) there is less formality in relation to the procedure for the infliction of an administrative offence when compared to the imposition of a criminal penalty by a court of criminal jurisdiction; (c) administrative offences allow for a regime which does not involve a formal court setting. On the contrary, they are challenged before tribunals not necessarily presided by the judiciary and which do not necessarily hold their sittings within the court building; (d) administrative offences supplement the tribunal’s budget in so far as the proceeds collected from the fines inflicted by the tribunal can be deposited in the tribunal’s bank account rather than in government coffers; (e) administrative offences are heard by specialized tribunals where the members of the tribunal would be experts in the field, the tribunal is called upon to adjudge whilst in the case of the courts the judiciary would have to employ their own experts due to their lack of expertise in the specialized field concerned; (f) administrative offences do not cater for custodial punishments but punishments which do not deprive one’s freedom. This makes the implementation of their punishments less expensive to government coffers; and (g) administrative offences are nearer to the public administration than to a judicial body in so far as they are inflicted by the public administration, whilst in the case of criminal offences the public administration is detached in their imposition by the courts of criminal jurisdiction; (h) administrative offences are cheaper to determine, impose and 23
id-dritt enforce than criminal offences. Hence, savings may be made to the government’s coffers.
10. Conclusion The above list of advantages for the creation by statute of administrative offences does in no way imply that they are bereft of any defect. For instance, they might be exercised in breach of Human Rights Law, in particular the right to a fair and public trial, bearing in mind that the members of the tribunals appointed to hear those cases might lack Human Rights Law training. Yet, this notwithstanding, administrative offences are here to stay and this is evidenced by the proliferation of these types of offences in the statute book when compared to other Public Law offences; recourse is being had more frequently in statutory legislation to the administrative offence than to the criminal offence or to civil damages. But, overall, it cannot be said that the administrative offence has totally supplanted the other Public Law offences and civil damages. On the contrary, the argument can be made that the legislature is not barking up the wrong tree when it is having recourse to a plethora of Public Law offences and civil damages at one and the same time as all these diverse Public Law offences and civil damages are – at least at the moment of writing – complementary, not antagonistic, to each other. Therefore, the administrative offence has not displaced other forms of Public Law offences and civil damages even though, in certain respects, it still remains rudimentary and undeveloped in so far as there is no universal holistic procedure applicable thereto.
24
Tonio Borg The perils of positivist thinking in Public law
Tonio Borg LL.D, Ph.D, K.O.M. is a former European Commissioner and former Deputy Prime Minister and Minister of Foreign Affairs of Malta. He is a resident lecturer in public law at the University of Malta.
id-dritt
1. Introduction
T
he positivist approach to legal interpretation is based on a particular philosophical idea of law; namely, that law is a command by a superior to an inferior in the interest of society, a strict application of the law is a must and no further interpretation is necessary except the clear wording of the law. Naturally, this approach, laudable though it might seem, can create problems. Laws are created in a contest, historical, social or political. The law drafters cannot create perfect legislation, leading to loopholes and unclear provisions. But, above all, the reasonable interpretation of statutory provisions is necessary in order to prevent unreasonable consequences or conclusions. A purview of Maltese jurisprudence in public law, as well as particular incidents in Malta’s constitutional history, will reveal the dangers of adopting positivist approaches in this sphere of the law. The most spectacular example of such a danger arose in the constitutional crisis of December 1974 which ushered in a republican form of Government. The 1964 monarchical constitution, granted on Independence Day, contained an article which proclaimed the supremacy of the Constitution, subject to certain exceptions; namely, the possibility of amending the Constitution through a three tier form contained in Article 66, and the exceptions made to a host of particular ordinary laws as they stood on the coming into force of the Constitution. These encompassed the main Codes of law, as well as an exemption of pre1962 laws from the right to property contained in Article 37. This provision was the subject of heated legal and political debate in December 1974 when the Government expressed the intention of amending the Constitution without having to resort to a referendum. Agreement had been reached in the House, by a large majority surpassing two-thirds, as to the main features of the amendments which included, apart from the main thrust towards a change from monarchical to Republican government, the automatic composition of the Constitutional Court and other matters. Some provisions which had to be amended required not only a two-thirds majority in the House, which the amendments enjoyed, but also a referendum. To avert the referendum requirement, a legal ploy was excogitated: it was discovered that Article 6 itself, the supremacy clause, was not entrenched. Article 66 provided that an un-entrenched constitutional provision could be amended 26
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by an absolute majority of the members of the House of Representatives. Consequently Article 6 was amended through such majority, the supremacy of the Constitution was put in abeyance, the amendments were introduced, and, once everything had been suitably amended, the door was shut once again and supremacy reasserted, this time entrenched by a two-thirds majority. In order to arrive at such a legal stratagem, Government consulted the Attorney General. It was known that a written advice was given, the same one which was shown to the Opposition in 1974 before it consented to this unorthodox way of amending the Constitution. The written advice by Dr Edgar Mizzi has now come to light. It adopts a positivist approach, which incidentally was accepted by Malta’s legislature. No one contested the means used to change the Constitution. Professor J.J. Cremona, the author of the original Constitution himself, concludes that though there was an interruption in the legal continuity by the unorthodox method used to change the Constitution, such irregularity was cured by general acquiescence1. The argument was simple: the supremacy clause was not entrenched, and consequently could be altered by an absolute majority. In the advice rendered public recently and deposited at the National Public Library, which is dated 9th December 1974,2 a few days before the enactment of the constitutional changes, the Crown Advocate General stated: This is not a casus omissus for section 66 specifically provides not only that section 6 may be altered but also how it may be altered. The case is expressly covered in law and is expressly excluded from entrenchment. ... Some might say that it is a case of a drafting error and could support the view by invoking the paramount importance of the section in question and of the principle which it enunciates, namely the supremacy of the Constitution … they could add the possibility of amending 6 by a mere majority would stultify completely the exacting requirements 1 See JJ Cremona: Birth pangs of a Republic: Section 6 of the Maltese Constitution: Selected Papers Vol. II (1990-2000 (PEG 2002) 129. See also Tonio Borg A Commentary on the Constitution of Malta (Kite) (2016) 31-39. 2 Memo dated 9 December 1974 to the Prime Minister signed by the Crown Advocate General. This memo is evidently a draft before a formal one was typed. The official one could not be found. Dr Mizzi’s son Dr. Henri Mizzi found it in his deceased father’s papers recently and graciously gave me a copy; the original has been deposited by Dr. Henri Mizzi at the National Library (Bibliotheca).
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of subsections (2) and (3) of Section 66. These are of course real difficulties but to ignore the clear wording of subsections (1) and (5) of Section 66 is at least equally difficult. The fact that section 6 is, by the very terms of the Constitution, subject to alteration by an Act of Parliament approved by a mere majority of all the members of the House, remains incontrovertible. The Constitution expressly excludes section 6 from entrenchment. The advice goes on also to make a moral argument: The action by your Government is not only legally possible but also morally justifiable once it is clear that the purpose of the amendment is that of giving to the country, by peaceful means and by avoiding as much as possible cause for animosity, a constitution acceptable to the two parties represented in the House and consequently to the country as a whole. That argument was true. The stratagem, legally unorthodox though it was, calmed the troubled waters then, and ushered in the republican form of government with the least possible political tremors. However, the argument remains that legal continuity was jeopardised, and the idea of constitutional supremacy subjected to political convenience and expediency. There is also no doubt that this written advice was the same one shown to the Opposition. In Kif Sirna Repubblika3, Ugo Mifsud Bonnici, then an Opposition MP, stated: Within the party there were those who wanted to seek the opinion of English constitutional jurists…in fact that is what happened but the advice given was not at all conclusive or unanimous and this explains the reason why the Nationalist Party insisted that the advice of (Crown Advocate General) Edgar Mizzi be reduced to writing and shown to us.4 On this point it is pertinent to point out that there are at least fourteen 3 Ugo Mifsud Bonnici Kif Sirna Repubblika (PIN) (1999)26. 4 ‘Fi hdan il-Partit kien hemm min xtaq li niehdu il-parir ta’ avukati Kostituzzjoanlisti Inglizi …fil-fatt hekk sar izda il-pariri xejn ma kienu konkluzivi jew unanimi u dan jispjega ir-raguni li minhabba fiha il-parti Nazzjonalista insistiet illi il-parir tal-Avukat Edgar Mizzi, l-avukat tal-Istat, jigi mnizzel bil-kitba u muri lilna.’
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Commonwealth countries whose Constitution does not contain a supremacy clause at all. Those which have a Constitution which contains one have had such provision entrenched. There is, however, one country whose Constitution contains a supremacy clause which is not entrenched, and that is Trinidad and Tobago. In that country’s Constitution the amendment mechanism in Article 54, requiring a qualified majority of two-thirds and in some cases four-fifths of the members of the country’s Legislature, lists a number of sections but ignores the supremacy section; namely, Article 2. It is naive to think that a mistake was committed twice: in Trinidad and Tobago in 1962 when the country became independent, and in Malta in 1964 by omitting to entrench the section relating to supremacy of the Constitution. The more plausible explanation is that it was presumed that the supremacy clause is part of the DNA of any written constitution. This position was held by Prof J.J. Cremona, who as Chief Justice in Luis Vassallo v Prime Minister5 stated that the supremacy of a Constitution stems from its very nature, citing Chief Justice Marshall’s dictum in Marbury v Madison 6 that ‘it is a proposition too plain to be contested that the Constitution controls any legislative act repugnant to it.’ I find it remarkable that those Commonwealth countries who do not have a supremacy clause in their Constitutions have decided that their Constitution is supreme; and the Maltese Constitution which has a supremacy clause was amended in 1974 as if it did not have one! One can compare in stark contrast the position in India as regards supremacy and the way the Indian Supreme Court has treated the subject; anything but positivist! The Indian Constitution does not contain an express supremacy clause except as regards human rights; i.e. the Constitution declares the human rights chapter as being supreme vis a vis any measure, legislative or administrative. As to the remaining sections, the Constitution is silent. In Gopalan v. State of Madras7 the Supreme Court of India ruled that such supremacy clause was included as a matter of abundant caution; even without such clause, the human rights chapter would have been considered as supreme. But more interestingly, the Supreme Court has classified the supremacy of the entire Constitution to be basic doctrine which cannot be changed. As Professor Durgas Das Basu states: 5 6 7
(CC) (27 February 1978). (1803) (1 Cranch 137) (1950(SCR)88(100)
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So even though the supremacy of the Constitution is limited to conflict of any measure with the human rights provisions of the Constitution, case law has determined that supremacy of the Constitution applied to all the provisions of India’s supreme law. 8 The positivist approach adopted in Malta in 1974 has created its own problems; for if it is possible to amend the supremacy clause in such a manner, then it can happen again. This time it is true the section is entrenched, but not by the highest tier; i.e. two-thirds majority and a referendum; which means that those provisions such as the five year lifetime of Parliament can be amended without resorting to a referendum but through a two-thirds parliamentary majority by suspending Article 6 once again, which needs only a two-thirds majority to change!
2. The Turbulent Summer of 1998 A second incident, this time in 1998, linked in part to the 1974 amendments, relates to the position of the Speaker in the House. According to Article 52(2) of the Constitution, the Speaker, even if chosen from outside the House, is considered to be a member of the House. When Government was considering moving forward with the constitutional amendments in 1974, with or without the Opposition’s approval on the basis of the positivist interpretation of section 6, such changes still required the approval by an absolute majority of the House.9 Does one count the Speaker in order to establish this majority? At the 1971 General Elections, Government had only won by a one-seat majority in the House: 28 out of 27. If one were to include the Speaker, the total number would be 56, and an absolute majority of that would be 29. It so happened that in January 1974, an Opposition MP10 crossed the floor and Government obtained its 29th seat in the House. Of course, this could have been by pure coincidence. The fact that it was probably not stems from the fact that the constitutional 8 Durga Das Basu Commentary on the Constitution of India Vol I (8th Ed 2007)725. 9 Article 66 of the Constitution provides that where a provision is not entrenched , then an absolute majority suffices to alter such provision. In ordinary matters a simple majority (i.e. 50 per centum plus one of the members voting) is enough. To amend an un-entrenched provision of the Constitution, an absolute majority is required i.e. fifty per centum plus one of all members eligible to vote whether present or not at the time of voting. 10 Mr. Alfred Baldacchino crossed the floor on 30th January 1974.
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amendments of 1974 inserted a rule that the Speaker is considered to be a member of the House except for purposes of establishing a majority required to amend the Constitution under Article 66,11 an oblique admission to the fact that Government was probably given the advice that the Speaker should be counted unless there is an express provision of the Constitution excluding him from such determination. This apparently innocuous amendment raised important constitutional issues in 1998. The Labour Government, having won the October 1996 general elections by a one-seat majority, faced rebellion within its ranks, particularly from Mr. Mintoff’s opposition to Government policy. In July 1998, Mr Mintoff voted against a Government Resolution transferring public land to a private consortium entrusted with the Cottonera Waterfront Project. Prime Minister Alfred Sant declared that Government would consider such the Resolution as a matter of confidence. Mr. Mintoff still voted against such Resolution which, with the Opposition voting against, was defeated in the House. When the Leader of the Opposition at the next sitting drew the attention of the Speaker that Government had lost its majority in the House, the latter gave a Ruling which stated that losing a motion considered to be one of confidence was not equal to a formal motion of no confidence, and that in any case, since the Speaker was a member of the House, the required majority to secure approval of a no confidence motion was 35 and not 34 out of a 69-seat legislature. 12 The Speaker ruled13 that: The Chair refers the entire House to paragraph (a) of sub article (5) of Article 76 of the Constitution which states that if the House of Representatives passes a resolution supported by the votes of a majority of all the members thereof that it has no confidence in the Government, and the Prime Minister does not within three days 11 Proviso to Article 52(2) of the Constitution 12 Article 81 of the Constitution provides that ‘if the House of Representatives passes a Resolution supported by the votes of a majority of all the members thereof that it has no confidence in the Government, the President may remove the Prime Minister from office. Such power however can only be exercised if within three days the Prime Minister does not resign or advice the President to dissolve the House.’ 13 Ruling by Speaker Miriam Spiteri Debono (Eight Legislature) Sitting No 240 13 July 1998).
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either resign from office or advice a dissolution, the President may dissolve Parliament. If one were to accept for one moment that the resolution was a motion of no confidence owing to the political interpretation given to it by Government, if one refers to the words “supported by the votes of a majority of all the members thereof” that motion would still not have been deemed to be approved, since the total number of members of this House is 70 and not 69.14 This positivist interpretation of the Constitution is controversial to say the least. How can one add a non-voting member; i.e. a member who does not enjoy an original vote but only a casting one, in order to determine an absolute majority of members? It is logically evident that by ‘all members’ one is referring to members who are entitled to vote, not those who are not. This absurd result of positivist thinking would lead to the absurd conclusion that in order to form a government, a party needs only a one-seat majority in the House, but in order to be removed from office, there must be a threeseat majority!15 Against this positivist thinking is the general principle that the rules relating to the government’s confidence in the House are the result of time-honoured English conventions, reduced in writing, but still retaining their conventional character16. All parliamentary democracies envisage an Executive which sits in Parliament. This gives Government an advantage compared to the strict separation of the Executive and Legislature in the US Constitution. Under our parliamentary system the Executive practically dominates the House and all legislation put forward by it is as a rule approved. It however contains one hidden disadvantage for Government. If Government loses the confidence of the legislature at any moment in time, 14 ‘Is-Sedja tirreferi il-Kamra ghall-artikolu 76(5)(a) li jipprovdi li “jekk il-Kamra tad-Deputati tghaddi Risoluzzjoni li jkollha voti favur taghha ta’ maggoranza tal-membri kollha taghha li ma ghanshiex fiducja fil-Gvern, u il-Prim Ministru fi zmien tlett ijiem la ma jirrizenja mill-kariga tieghu u lanqas jaghti parir ghax-xoljiment, il-President jista’ jxolji il-Parlament ”; jekk wiehed jaccetta ghal mument li r-Risoluzzjoni kienet mozzjoni ta’ sfiducja minhabba interpretazzjoni politika li taha il-Gvern, jekk wiehed jirreferi ghall-kliem “li jkollha vot favor taghha ta’ maggoranza tal-membri kollha” dik il-mozzjoni xorta ma kenitx tkun ikkonsidrata li ghaddiet, billi n-numru totali ta’ membri ta ‘ dil-Kamra hu 70 u mhux 69.’ 15 See TOM Tonio Borg: A Dangerous Precedent : ‘If the Speaker’s ruling is correct then the President can appoint a Prime Minister only if he is satisfied that there is at least a three seat majority in favour of his appointment …unless of course one conveniently argues that to acquire the confidence of the House a majority of one is enough, but to lose that confidence there has to be a majority of three against the government!’ See also in support of such an interpretation Austin Bencini: Controversy over Speaker’s ruling builds up (TOM) (18 July 1998); for an opposite view, see Edgar Mizzi The Speaker’s Ruling (TOM17 July 1998) and The Big Difference (TOM)( 23 July 1998) 16 See Ian Refalo: Il Gens 10 July 1998.
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even by a single vote, its term of office comes to an end. Tampering with such a cardinal principle distorts and adulterates the very notion of parliamentary government. In the same ruling, the Speaker also rejected the notion that failure to pass a confidence motion amounted to a motion of no confidence. In that particular debate relating to the granting of public land for the purpose of a development at Cottonera, Government, following a first defeat of the motion, declared that it would consider a second motion regarding the same as a matter of confidence. This it did to warn recalcitrant MPs on its own side that voting against the project would be tantamount to a vote of no confidence. It is a politically accepted form of arm-twisting used by several governments with slim majorities in the face of a rebellion within its ranks; however, using such a tactic also means that if the motion is not approved, one has to draw the consequence for such failure as well. One cannot accept the rose without accepting also the thorns attached to it. The Speaker’s ruling amounted to the proverbial heads I win, tails you lose! Finally, it is neither legitimate to argue that the apparent lapsus was intentional in order to safeguard government’s position in times of political turmoil within one’s own party or when the party in Government does not have a clear majority in the Legislature. The need of an absolute majority to sanction a vote of no confidence was not introduced under the 1961 Constitution when Government’s strength in the Legislative Assembly was only 25 seats out of fifty. Indeed, under the 1961 Constitution, such a motion needed only a majority of those present and voting, that is to say, a mere simple majority. In any case, in 1962 following the crossing of the floor by an Opposition MP, Government enjoyed a majority of two seats. The absolute majority requirement was only introduced in the 1964 Independence Constitution.
3. Elastic Preambles The Demicoli case17 today has achieved European, if not world, recognition. The European Court of Human Rights ruled that the House of Representatives in Malta could not preside over proceedings which were criminal in nature for it was not an impartial adjudicating authority considering that the victims 17
Demicoli v. Malta (ECHR )(27 August 1991) (13057/87)
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of slander acted as judges in the final verdict of guilt. Few remember, however, that the Constitutional Court had ruled that the law was in order. In doing so, it resorted to a rather bizarre, dangerous and positivist interpretation. It decided that even though the right to a fair hearing under Article 39 did not contain any exception in favour of parliamentary privilege, including the right of Parliament to conduct criminal proceedings against any individual, the fact that parliamentary privilege was mentioned as an exception to Article 35 (personal liberty) and Article 43 (freedom of expression) allowed the Court to apply an exception to one right to another right which contained no such exception! It stated that: The Court would first like to remark that Article 32 of the Constitution of Malta under Chapter IV entitled Fundamental Rights and Freedoms of the Individual, after listing the said rights and freedoms, continues to state that ”the subsequent provisions of this Chapter ... shall have effect to secure protection to the rights and freedoms aforesaid subject to such limitations to such protection as can be found in such provisions ..” It is clear therefore that according to the Constitution the limitations which the Article 32 refers to, need not necessarily result from the specific provision granting such right or freedom, but may emerge from the other provisions under the same Chapter of the Constitution. (Emphasis added). The dangers of such a pronouncement are self-evident. Each and every human right, depending on its contents and importance, has a specific list of so-called permissible statutory derogations. Those applicable to the right to life are not the same as those applicable to freedom of expression. Public morality and defence are exceptions to the freedom of expression but not to the right to life. The judgment of the European Court of Human Rights reversed this obnoxious decision of the highest court in Malta. It of course applied the European Convention on Human Rights. It ruled that Article 6 had been contravened owing to the lack of impartiality of the legislature acting as an adjudicating authority in a case of a criminal nature.
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4. Re-Trial in Human Rights Cases A similar positivist approach by our highest court has taken place in deciding whether the legal remedy of a new hearing (ritrattazzjoni) applicable in all civil cases, applies to constitutional human rights cases as well. The Rules of Court since 1964 had provided that in human rights cases the provisions of the Code of Organization and Civil Procedure, and therefore all the provisions relating to a new hearing, were mutatis mutandis applicable to such cases, unless in direct conflict with the Constitution. Up to 1985 there was no issue with re-hearings being requested in human rights cases. Indeed, in the Ferro case,18 the Constitutional Court was seized with a request for re-hearing; it did not dismiss the request because the remedy did not exist, but because it came to the conclusion that there were no grounds to sustain such a request on the merits. It was only in 1985 that the Court was seized with re-hearing requests in two politically loaded cases,19 one instituted by the Opposition party, the other by a prominent Government Minister, in which it interpreted the Constitution as excluding the hearing of new cases owing to the fact that the jurisdiction of the courts of constitutional jurisdiction is special and therefore only an express provision of the law could allow re-hearing cases. It appointed the two cases on the same date and dismissed them both simultaneously. A politically convenient solution to a thorny question in pseudo- Solomon fashion. It ruled: Since the jurisdiction granted to it and the First Hall of the Civil Court is a special one, and the functions and the powers of each one of them in the exercise of such jurisdiction are indicated in the said Articles 46 and 95, it is not lawful that one of these courts exercises jurisdictional functions and other powers which are not envisaged in such articles. In 2005 Parliament amended Article 811 of the Civil Procedure Code relating to new hearings, guaranteeing such new hearings in cases of judgments of the Civil Court of the First Hall in its constitutional jurisdiction, but 18 Edward Ferro v. Housing Secretary (Const. Court) (CC) 19 June 1973. 19 Carmel Cacopardo v. Minister for Works (CC) (25 June 1986) (Vol. LXX.I.42) and Joseph Galea noe v. Minister for Works (CC)(25 June 1986) (Vol. LXX.I.48).
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remained silent on courts of appellate constitutional jurisdiction, presumably because Article 811 already referred to ‘judgments given in second instance .’ Wasn’t the Constitutional Court a court of second instance? It seems that the provision was so interpreted. In Jovica Kolakovic v. Attorney General20, the Constitutional Court decided on retrial request in a constitutional matter, rejecting it on the merits. In another case,21 the Court accepted to hear a retrial request but again rejected it on the merits. In 2015, the Constitutional Court reverted to its previous positivist and restrictive interpretation: The Constitution did not envisage the granting of a right to request a new hearing which is an extraordinary right: and the Court does not deem it lawful to grant to itself this extraordinary right to order a new hearing when the Constitution itself does not grant such right. … The Maltese legislator amended Article 811 of the Code of Organization and Civil Procedure but granted the right of a retrial after judgments of the Civil Court First Hall in its constitutional jurisdiction and deliberately excluded this remedy following judgments of the Constitutional Court. It is being said deliberately because the Government of the day was certainly conscious of the abovementioned judgments but still did not consider proposing the extension of the remedy to judgments delivered by this Court. 22 This means that the Constitutional Court was not considered as a court of second instance and appellate jurisdiction. This positivist interpretation is even more legally weird when one considers that re-hearing appeals, as a rule, is limited only to decisions by appellate courts; for if a party to a cause fails to appeal a case, it cannot then request a rehearing of the judgment delivered by the court of first instance. It could never have been the legislator’s intention to limit re-hearing only to cases before the court of first instance, the more so when reference was made in Article 811 to judgments ‘given in second instance’.
20 21 22
(CC) 28 April 2014) 26/10 William Vella pro et noe v. Commissioner of Land et (CC)(30 May 2014) (10/12) Architect Joseph Barbara v Prime Minister (CC) (13 January 2015 (65/07)
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5. Positivism and Juridical Interest A similar trend can be seen in the way the courts have dealt with the issue of juridical interest or legal standing in public law. They have forcefully applied the notion of direct personal juridical interest as understood in civil law to the public law sphere, not only in cases of judicial review of administrative actions but also in constitutional cases.23 In the Constitution, human right cases must be instituted by a person who claims a contravention of the human rights provisions in relation to him. This has been interpreted as full juridical interest even though the European Court of Human Rights has interpreted the stricter notion of “victim” under Article 25 of the European Convention on Human Rights, as allowing persons or non-governmental organisations who do not have a direct personal interest but have sufficient interest to institute an action before the Court. 24 As regards non-human rights cases, the Court, adopting a positivist approach, has ruled that unless a constitutional case falls within the strict parameters of Article 116 of the Constitution, which provides for the so called actio popularis, then juridical interest is required. Since Article 116 refers only to challenging of laws on the grounds other than human rights, then, arguing a contrario sensu, a non-human rights constitutional action is exempted from the juridical interest requirement only if one challenges the validity of a law; if one challenges a decision or order by a public authority, interest is required. The dangers of this pronouncement is that the strict application of the juridical interest doctrine, as expounded by civil law jurists in private law, to constitutional cases would lead to situations where express provisions of the Constitution are rendered un-justiciable. If a Minster is appointed on the advice of the Prime Minister to Cabinet without being elected as a Member of Parliament as required by our Constitution, or if Malta joins a military alliance in breach of the Constitution, no citizen can challenge such appointments; for who could possess such direct personal interest? 23 See Tonio Borg: Juridical Interest in Constitutional Proceedings Ghaqda Studenti Ligi (GHSL) on line 17 February 2017 and Giovanni Bonello When Civil Law trumps the Constitutional Court Id-Dritt Law Journal Vol. XXIX:(GHSL) (2019) p.427 24 See in this regard the strict application and interpretation of juridical interest in the case Simon Busuttil v Attorney General et (CC)(29 October 2018)(86/17) where the apex court in Malta ruled that a member of Parliament who filed an application before the duty Magistrate for a criminal investigation to commence, and which was acceded to, did not then have legal standing before a court of appellate jurisdiction which had the power to revoke such a Magisterial decree
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This was affirmed in two cases. In the first, a number of non-governmental organizations in 1988 challenged Government’s invitation to a fleet of Royal Navy ships to anchor in Maltese ports, alleging that such concentration of warships infringed Malta’s neutrality enshrined in the Constitution. Plaintiffs lost the case on the merits, but graver still, their request was rejected because of lack of juridical interest. Once what was being challenged was not an instrument having the force of law, the issue fell outside the ambit of Article 116. If so, interest had to be provided. This same reasoning was applied years later in 2013 when two Opposition MPs argued that, had it not been for an error committed by the counting agents of the Electoral Commission during the March 2013 General Elections, they would have been elected through the normal procedure and not through a corrective electoral mechanism. The Court ruled that once the two MPs were elected they had no juridical interest to question the method of their election. 25 This judgment is also in direct conflict with judgments26 delivered preWorld War II by the Court of Appeal to the effect that, even though no legal provision existed, an actio popularis was always admissible in electoral cases for voters have a right to see to it, even through judicial means, that their representatives have been regularly elected. It is a pity that when Malta was a colony there was no need to prove any personal interest to challenge the regularity and validity of an election to the Legislature, but post-Independence, one needs to prove such interest! A blind application of civil law in public law produces similar bizarre consequences. In Maltese civil law, vicarious liability is regulated by the Civil Code. An employer, for instance, is liable in tort for the actions of his employees only 25 Claudette Buttigieg v Electoral Commission (CC)( 13 March 2013) (526/13) and Frederick Azzopardi v Electoral Commission (CC)(13 March 2013)(525/13) 26 Giuseppe Micallef Goggi v. Emanuel Armando Mifsud (CA) (11 April 1930) (Kollezz. Vol. XXVII.I 495): ‘It was never put in doubt under the several Constitutions which had effect in these Islands, including the current one, that it is the right of any citizen to propose the popular action in matters relating to elections. This is the right to judicially request the annulment of a political ,election, even though there is no specific legal provision on the matter.’ ‘Non fu mai dubitato sotte le varie Costituzioni che ebbero vigore in queste Isole, compresa la presente, che compete a qualsiasi cittadino l’ azione popolare in materia di elezione; il diritto cioe’ di agire in giudizio per domandare l’annullamento di una elezione politica, quantunque non vi sia un preciso disposto di legge in proposito.’
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as regards “culpa in eligendo”: negligence in choice. In one case,27 regarding the failure of the Commissioner of Police to protect the right of students to stage a silent march in Valletta in 1978, which was disrupted by thugs waiting for the students, the court found that although the Police in charge that day had failed in their constitutional duty to protect the students’ fundamental right to freedom of assembly, the defendant Commissioner of Police was not responsible on the ground that there had been no culpa in eligendo.28 The Constitutional Court thankfully reversed this judgment and found for the student marchers since the Commissioner was responsible by law for the supervision of the Police Corps and should have taken extra precautionary measures once he had been warned by the organisers about threats of disruption of the event.
6. The difference between Compulsory and Forced In 1977 a partial strike by government medical doctors was crushed by locking out and subsequently dismissing such doctors from public service, but graver still, enacting a law whereby such striking public servants could not exercise their profession in private hospitals29 in perpetuity, unless they declared in writing that they would not resort to strike action again and return to their employment with Government. This lifelong prohibition applied even after Government, through dubious means, dismissed the doctors from the public service! The action was, as expected, contested in the courts of constitutional jurisdiction; prohibiting striking government doctors from working in private hospitals was an indirect form of forced labour: if the doctors did not return to work, and pledged to perform the full range of their duties, they could not earn a living with a third party with whom they had no dispute! Government seemed to be saying: you either work for me, or you won’t work for anyone else. Some of them, whose work and profession was intimately linked to hospital, 27 Francis Zammit Dimech et noe v Commissioner of Police (Constitutional Court) (30 November 1987) (Kollezz. Vol. LXXI.I.86) 28 Art 1037. Where a person for any work or service whatsoever employs another person who is incompetent, or whom he has not reasonable grounds to consider competent, he shall be liable for any damage which such other person may, through incompetence in the performance of such work or service, cause to others. 29 According to a practice still applicable today, government consultants were allowed private practice in order to entice the best medical consultants to work in State hospitals.
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had to emigrate and work abroad. 30 This far reaching law was declared to be perfectly valid by our Constitutional Court. It dismissed claims that it infringed freedom to form a trade union, freedom of expression and freedom from discrimination, or that it amounted to forced labour. The Constitutional Court said that, if at all, this was a very indirect form of forced labour and that while the European Convention on Human Rights (which at that time was not part of our legal system, nor could anyone petition the European Court in Strasbourg for breach of his rights in Malta) used the words forced or compulsory labour in Article 4, the Maltese Constitution in Article 35 referred only to forced labour, full stop. The Court quoted the Iversen case31 where the applicant had distinguished between forced and compulsory labour arguing that the concept of compulsory labour was a wider one, covering indirect forms of forced labour, which encompassed his case i.e. that of sending fledgling medical doctors as part of their work with the National Health Service to God-forgotten remote places in Northern Norway. It does not seem that the European Commission of Human Rights accepted this distinction; so, the Court actually referred to a submission by applicant - who incidentally lost the case - without referring to the decision on the merits itself. The Constitutional Court, in cryptic language, then concluded: The challenged amendment, properly speaking, considering its own wording, imposes non-labour in private hospitals to those who elect not to do what it prescribes; and if appellants state, as they are stating, that this brings about force labour for them in Government hospitals, the connotation of what is compulsory for purposes of forced labour, in its intention and raison d’être, is so indirect, apart from other considerations regarding the nature of forced labour, that in the opinion of the Court, such amendment clearly does not fall under the prohibition as formulated in Article 35 of our Constitution. One was not being forced to work; on the contrary one was being forced not to work. These sophistic and byzantine distinctions served only to 30 The industrial dispute was only resolved after a change in Government in 1987. It lasted ten years (1977-87) 31 Iversen v. Norway (Appl No 1468/62 Yearbook VI p 278 et seq.
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shamefully allow a far reaching and obnoxious law to remain on our statute books for a decade.
7. Not all is gloomy: just most of it There have been exceptional cases where the Courts have refused positivist interpretations. The most clamorous example was the Church Schools case.32 In a human rights case filed by the Catholic Church in Malta, it was alleged that a law which precluded Catholic Schools from charging tuition fees, enacted with the rallying political war cry of Either free, or Nothing, was in breach of a number of human rights provisions guaranteeing religious freedom including the right to manage schools belonging to a particular faith or Church. When the case was appointed before the court of first instance, one judge after another abstained for a variety of reasons. One stated that he had given legal advice to one of the Congregations years before the event (it is still not clear what the subject matter of the advice was); others abstained because some relative of theirs attended a Catholic School as a student. It so happened that finally there were only four judges left to try the case; one presiding over the court of first instance and three composing the Constitutional Court as an appellate court. When a preliminary decision on evidence was given by the lower Court, Government appealed to the threemember Constitutional Court. It immediately requested the abstention of one of the judges whose son attended a Catholic School. The Constitutional Court, in a landmark historical judgment33 applying the doctrine of ius necessitatis, ruled that once only three judges were left, there was no room for challenging or abstention; those three judges would not relinquish their duties for if they were to abstain, the Court would not be constituted. At that time the assignment of duties at the Law Courts was a prerogative of the government of the day. It stated: 32 Monisgnor G. Mercieca pro et noe v. Prime Minister et (CC) (22 October 1984) (Vol. LXVIII.I. 42 (137/84). 33 Mgr. Joseph Mercieca v. Prime Minister et (CC) (22 October 1984) (Kollezz. Vol. XLVIII.I. 42) (137/84)
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Malta is a republic founded on work and the respect of the fundamental rights and freedoms of the individual (which should colour the interpretation of the entire Constitution otherwise such statement would be only a futile boast – something presumably not permissible in a serious document such as the Constitution of the country. The Court cannot fathom how in the light of the first subsection of the first section of the Constitution, it can possibly sideline and jettison the best practical safeguard in a democracy, namely that the legislator willed that the Court be practically always constituted and functioning. 34 This remarkable judgment then reserved a final surprise. After the Constitutional Court delivered its justification as to why none of its members would abstain, it then dealt with the merits of the abstention request just the same and decided that this was not justified at law. It could have simply stated that at the beginning and decided the case. Instead it first delivered its statement in favour of the ius necessitatis for posterity and to create a precedent about the non-application of abstention requests in such cases, and then coolly, effectively and calmly dismissed the request for abstention on the merits.
8. Conclusion This cursory look at some of the judgments based on positivist thinking have revealed the dangers of adopting such an approach and interpretation in public law actions; constitutional actions are not about splitting hairs in legal interpretation; they are about interpreting a living instrument which adapts itself to the times but retains its core values, which should not be interpreted in a positivist way. Other Supreme Courts have created judicial doctrines such as the basic doctrine theory whereby the Indian Supreme Court does not allow any changes to the republican form of government, the supremacy of the Constitution and the separation of powers amongst 34 ‘Malta hija repubblika demokratika bbażata fuq ix-xogħol u fuq ir-rispett għad-drittijiet u l-libertaijiet fondamentali tal-individwu (li żgur għanu jlewwen l-interpretazzjoni kollha tal-Kostituzzjoni, għax altrimenti jkun biss ftaħira u tfanfira – ħaġa li mhix presumibbli f’dokument serju bħalma hi l-Kostituzzjoni ta’ pajjiż, il-Qorti ma tistax tara kif, fid-dawl tal-imsemmi l-ewwel inċiż tal-ewwel artikolu tal-Kostituzzjoni, hija tista’ lealment tiskarta, iġġenneb u tarmi l-aqwa salvagwardja prattika tad-demokrazija f’pajjiżna li l-leġislatur ried li prattikament tkun dejjem ikkostitwita u funzjonanti.’
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other things, even if the required majority to amend the Constitution backs such changes.35 Perhaps one would be asking too much for our apex Court to be so adventurous; but a change in mentality and approach is needed that confirms it is a supreme court in matters dealing with delicate relationships between citizen and State, and that the rights of the individual need to be protected in the widest sense possible.
35
Kesavananda Bharati v. State of Kerala (1973) 4 SCC 225 ;AIR 1973 SC 1461
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Ariane Aquilina Five Freedoms, Five Domains: An Analysis of the Implementation, or Lack thereof, of the Five Freedoms and the Five Domains in the Maltese Animal Welfare Act.
Ariane Aquilina obtained the degree of LL.D. from the University of Malta in 2017 after suc-cessfully defending a thesis entitled “Regulating the Keeping of Animals in Zoos: De Facto and De Jure” and was called to the bar in 2018. She is currently studying for a M.Sc. in International Animal Welfare, Ethics and Law at the University of Edinburgh. Ariane Aquilina is involved in the local animal welfare NGO scene. While reading law at the University of Malta, she took an active part in Għaqda Studenti tal-Liġi, fulfilling the roles of both editor and editor-in-chief for Id-Dritt Law Journal, and serving as Publications Officer on the Executive Board 2016/2017.
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1. Five Freedoms, Five Domains The Five Freedoms of animal welfare are a model comprised of freedoms that have had an immeasurable effect within the ambit of animal welfare. The emergence of the Five Freedoms can be traced back to the exponential increase in factory farming which boomed post-World War II, when a growing population demanded a more readily available and cheaper meat supply.1 This increase in demand required an increase in supply, which led to farms using processes to increase production that practically ignored the welfare of the animals being used. In 1964, the publication of Ruth Harrison’s seminal work “Animal Machines”, which exposed the inhumane conditions being experienced by farm animals,2 led to public outrage. As a result, the British Government appointed a committee to investigate livestock farming practices and in 1965 the “Report of the Technical Committee to Enquire into the Welfare of Animals kept under Intensive Livestock Husbandry Systems”, known as the Brambell report, was published. The beginnings of the Five Freedoms can be traced to this report: In principle we disapprove of a degree of confinement of an animal which necessarily frustrates most of the major activities which make up its natural behaviour and we do not consider such confinement or restraint permissible over a long period unless the other advantages thereby conferred upon the animal are likely to be very substantial. An animal should at least have sufficient freedom of movement to be able without difficulty, to turn round, groom itself, get up, lie down and stretch its limbs.3 Based on the recommendations in the Brambell Report, the British Government set up the Farm Animal Welfare Advisory Committee in 1967. This Committee was replaced by the current Farm Animal Welfare Council in 1979. The Five Freedoms as we know them today were developed by the Farm Animal Welfare Council, and while it is unclear when exactly they were set out, the earliest reference to them is considered to be a press 1 I A Robertson, Animals, Welfare and the Law: Fundamental Principles for Critical Assessment (Routledge 2015). 2 P Singer, Animal Liberation (HarperCollins Publishers 2009) 98. 3 Chairman: Professor F W Rogers Brambell F.R.S., ‘Report of the Technical Committee to Enquire into the Welfare of Animals kept under Intensive Livestock Husbandry Systems’ (December 1965) <http://edepot.wur.nl/134379> accessed 3 September 2019, emphasis added.
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Animal Welfare Law release dated 1979.4 The current Five Freedoms are as follows: Freedom 1: Freedom from hunger or thirst by ready access to fresh water and a diet to maintain full health and vigour (hereinafter “Freedom 1”); Freedom 2: Freedom from discomfort by providing an appropriate environment including shelter and a comfortable resting place (hereinafter “Freedom 2”); Freedom 3: Freedom from pain, injury or disease by prevention or rapid diagnosis and treatment (hereinafter “Freedom 3”); Freedom 4: Freedom to express normal behaviour by providing sufficient space, proper facilities and company of the animal’s own kind (hereinafter “Freedom 4”); Freedom 5: Freedom from fear and distress by ensuring conditions and treatment which avoid mental suffering (hereinafter “Freedom 5”).5 It can be observed that each freedom is made up of two parts, the first part being referred to as the freedom and the second part being referred to as the provision.6 The Five Freedoms have inarguably had a major effect on animal welfare in general, and animal welfare law in particular.7 Numerous animal welfare legislation frameworks are based on the Five Freedoms and incorporate 4 - -, ‘Five Freedoms’ (Farm Animal Welfare Council, last modified 16 April 2009) <https://webarchive.nationalarchives.gov.uk/20121010012427/http://www.fawc.org.uk/ freedoms.htm> accessed 3 September 2019. 5 --, ‘Annual Review 2012-2013’ (The Farm Animal Welfare Committee FAWC 2013) [online] <https://assets.publishing.service.gov.uk/government/uploads/system/uploads/ attachment_data/file/317786/FAWC_Annual_Review_2012-2013.pdf> accessed 4 September 2019. 6 S P McCulloch, ‘A Critique of FAWC’s Five Freedoms as a Framework for the Analysis of Animal Welfare’ [2013] 26 J Agric Environ Ethics <https://doi.org/10.1007/s10806-0129434-7 > accessed 24 August 2019. 7 S P McCulloch, ‘A Critique of FAWC’s Five Freedoms as a Framework for the Analysis of Animal Welfare’ [2013] 26 J Agric Environ Ethics <https://doi.org/10.1007/s10806012-9434-7 > accessed 24 August 2019; D J Mellor, ‘Moving Beyond the ‘Five Freedoms’ by Updating the ‘Five Provisions’ and Introducing Aligned ‘Animal Welfare Aims’’ [2016] 59(6) Animals <http://dx.doi.org/10.3390/ani6100059> accessed 3 September 2019.
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them into their text,8 including the animal welfare legislation of countries that are ranked highest in the world in terms of providing legal protection to animals9 such as the UK,10 Austria,11 Switzerland,12 Germany,13 and New Zealand.14 Mellor considers that the large influence of the Five Freedoms is due to four key factors: (1) the appealing “alliterative” nature of the Five Freedoms and the effective use of the terminology of “freedom”, (2) the fact that the Five Freedoms narrow down the term animal welfare from an abstract and general concept to specific and more tangible welfare concerns, such as the physical health of an animal, (3) the fact that these tangible concepts could therefore be interpreted into attainable goals, bolstered by practical advice on how such freedoms could be achieved set out in easy-to-understand provisions, such as “ready access to fresh water”, and (4) the growing prominence of animal rights activists during the same time period.15 The Five Freedoms have been effective in directing public attention to animal welfare concerns and the extensive lacuna in relation to animal welfare knowledge, and in encouraging scientific research to focus on obtaining more knowledge on the functioning of animals, including their welfare.16 However, they do present several issues and are not without 8 R Kagan and J Veasey, Challenges of Zoo Animal Welfare in Kleiman and others (eds), Wild Mammals in Captivity (The University of Chicago Press 2010) 11; I A Robertson, Animals, Welfare and the Law: Fundamental Principles for Critical Assessment (Routledge 2015). 9 - -, ‘Rankings’ (World Animal Protection) <https://api.worldanimalprotection. org/> accessed 7 September 2019. 10 Animal Welfare Act 2006 <http://www.legislation.gov.uk/ukpga/2006/45/contents> accessed 7 September 2019. 11 Tierschutzgesetz 2004 <https://www.ris.bka.gv.at/GeltendeFassung.wxe?Abfrage=Bundesnormen&Gesetzesnummer=20003541> accessed 7 September 2019. 12 Tierschutzgesetz 2005 <https://www.zuerchertierschutz.ch/fileadmin/user_upload/Tierschutzthemen/pdf/Tierschutzgesetz_e.pdf> accessed 7 September 2019. 13 Tierschutzgesetz 1972 <http://www.gesetze-im-internet.de/tierschg/index.html> accessed 7 September 2019. 14 Animal Welfare Act 1999 <http://www.legislation.govt.nz/act/public/1999/0142/ latest/DLM49664.html> accessed 7 September 2019. 15 D J Mellor, ‘Operational Details of the Five Domains Model and Its Key Applications to the Assessment and Management of Animal Welfare’ [2017] 60(7) Animals <http://dx.doi. org/10.3390/ani7080060> accessed 25 August 2019; D J Mellor, ‘Updating Animal Welfare Thinking: Moving Beyond the “Five Freedoms” towards “A Life Worth Living”’ [2016] 21(6) Animals <http://dx.doi.org/10.3390/ani6030021> accessed 26 August 2019. 16 D J Mellor, ‘Updating Animal Welfare Thinking: Moving Beyond the “Five Freedoms” towards “A Life Worth Living”’ [2016] 21(6) Animals <http://dx.doi.org/10.3390/ani6030021>
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their detractors. In 1995, Webster, being a member of both the Farm Animal Welfare Advisory Committee and the Farm Animal Welfare Council after it, and one of the original proponents of the Five Freedoms, was already writing that the text of the Five Freedoms was “very narrow-minded, since it [concentrates] almost exclusively on one aspect of behaviour (comfort seeking) to the exclusion of everything else that might contribute to good welfare.”.17 Green and Mellor state that one of the main problems with the concept of the Five Freedoms is that they “represent idealistic goals which in fact are not attainable during the life of any animal.”.18 While it was probably not the intention of the original Five Freedoms’ authors to propose the eradication of certain natural experiences, the terminology of the Five Freedoms can be confusing to laypersons as well as legislators, as they may purport the idea that experiences such as hunger and thirst could, at some point, be eliminated. In reality, experiences such as hunger and thirst are a natural occurrence that are found even in well-off animals, which do not themselves reflect a bad welfare state, but rather reflect the natural and inevitable processes undergone by animals. It is biologically impossible for these experiences to be eradicated completely,19 and in fact they are actually beneficial to welfare since they inherently motivate the animal to carry out natural functions such as drinking water or eating food, which are essential in maintaining welfare levels.20 The concern however arises when these experiences are prolonged and/or increased in intensity due to internal or external factors. The Five Freedoms were created during a period when the main school accessed 26 August 2019. 17 John Webster, Animal Welfare: A Cool Eye Towards Eden (Blackwell Scientific 1995) 11. 18 T C Green and D J Mellor, ‘Extending Ideas about Animal Welfare Assessment to include ‘Quality of Life’ and Related Concepts’ [2011] 59(6) New Zealand Veterinary Journal <http://doi.org/10.1080/00480169.2011.610283> accessed 25 August 2019. 19 D J Mellor, ‘Updating Animal Welfare Thinking: Moving Beyond the “Five Freedoms” towards “A Life Worth Living”’ [2016] 21(6) Animals <http://dx.doi.org/10.3390/ani6030021> accessed 26 August 2019. 20 D J Mellor, ‘Moving Beyond the ‘Five Freedoms’ by Updating the ‘Five Provisions’ and Introducing Aligned ‘Animal Welfare Aims’’ [2016] 59(6) Animals <http://dx.doi. org/10.3390/ani6100059> accessed 3 September 2019; D J Mellor, ‘Animal Emotions, Behaviour and the Promotion of Positive Welfare States’ [2012] 60(1) New Zealand Veterinary Journal <https://doi.org/10.1080/00480169.2011.619047> accessed 3 September 2019.
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of thought among animal welfarists was that the removal of negative experiences would be enough to provide good welfare.21 However, this concept has changed, and it is nowadays widely accepted that an optimum welfare level consists of ensuring that the animal does not suffer negative experiences, but also has the ability to take part in positive experiences.22 A cursory look at the Five Freedoms will indicate that the wording does not delineate positive experiences as being part of welfare considerations,23 thus proving problematic in light of current thinking.24 Furthermore, the Five Freedoms lack any consideration of an animal’s affective state.25 Put simply, the affective state of an animal involves its mental subjective state in reaction to its experiences, which in turn affects its welfare. For a long time, the concept of animals being able to experience such mental subjective states (or “feelings” in layman’s terms) was frowned upon by the scientific community as constituting an extreme form of anthropomorphism.26 Thus, early animal welfare considerations solely focused on physiological functions and issues.27 However, the concept of the affective state of an animal began to take hold in the early 1990s, became widely accepted by the early to mid-2000s, and eventually became 21 D J Mellor, ‘Animal Emotions, Behaviour and the Promotion of Positive Welfare States’ [2012] 60(1) New Zealand Veterinary Journal <https://doi.org/10.1080/00480169.2011. 619047> accessed 2 September 2019. 22 Vide inter alia: M Dawkins, ‘Behaviour as a Tool in the Assessment of Animal Welfare’ [2003] 106(4) Zoo Biology < https://doi.org/10.1078/0944-2006-00122> accessed 2 September 2019; D Broom, ‘A History of Animal Welfare Science’ [2011] 59(2) Acta Biotheoretica <https://doi-org.ezproxy.is.ed.ac.uk/10.1007/s10441-011-9123-3> accessed 2 September 2019; D J Mellor, ‘Positive Animal Welfare States and Reference Standards for Welfare Assessment’ [2014] 63(1) New Zealand Veterinary Journal <http://dx.doi.org/10.1080/004801 69.2014.926802> accessed 2 September 2019. 23 M Barrows, ‘Welfare Assessment in Zoo Animals’ [2017] 181(6) Veterinary Record <http://dx.doi.org/10.1136/vr.j3583> accessed 2 September 2019. 24 J Webster, ‘Animal Welfare: Freedoms, Dominions and ‘A Life Worth Living’’ [2016] 35(6) <http://dx.doi.org/10.3390/ani6060035> accessed 5 September 2019. 25 T C Green and D J Mellor, ‘Extending Ideas about Animal Welfare Assessment to include ‘Quality of Life’ and Related Concepts’ [2011] 59(6) New Zealand Veterinary Journal <http://doi.org/10.1080/00480169.2011.610283> accessed 25 August 2019. 26 D Fraser, Understanding Animal Welfare the Science in its Cultural Context (Oxford: Wiley-Blackwell, 2008). 27 D J Mellor and N J Beausoleil, ‘Extending the ‘Five Domains’ Model for Animal Welfare Assessment to Incorporate Positive Welfare States’ [2015] 24 Animal Welfare <http:// dx.doi.org/10.7120/09627286.24.3.241> accessed 2 September 2019; D J Mellor, ‘Animal Emotions, Behaviour and the Promotion of Positive Welfare States’ [2012] 60(1) New Zealand Veterinary Journal <https://doi.org/10.1080/00480169.2011.619047> accessed 2 September 2019.
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one of the current pillars of animal welfare science.28 Therefore, the lack of consideration of the affective state of animals in the Five Freedoms means that any framework based solely on them runs the risk of ignoring what is nowadays considered an integral part of animal welfare.29 Moreover, the text of the Five Freedoms is so general that even following them to the letter does not necessarily guarantee the welfare of an animal.30 For example, one of the Five Freedoms states that an animal should have access to appropriate nutrition and fresh water; however it does not delineate how such access should be set up. This means that a person without technical knowledge regarding the aspects of animal welfare could assume that simply providing food to an animal twice a day and providing a bowl of water is enough to tick the box in relation to this freedom. In fact, scientific research has shown that appropriate nutrition involves numerous aspects which include the type and amount of food, as well as the method by which the animal obtains the food or water. Setting down a bowl of water, for example, may work with animals such as dogs or cats, but will not work with other species. It has been shown time and time again that the provision of food can be used as an enrichment technique to provide positive behavioural experiences that are crucial to sustaining a good level of animal welfare.31 One example is when zoos feed tigers by nailing pieces of meat to wooden poles, forcing the tiger to exert its muscles and natural instincts in climbing the pole to obtain the meat, as 28 M Dawkins, ‘Behaviour as a Tool in the Assessment of Animal Welfare’ [2003] 106(4) Zoo Biology < https://doi.org/10.1078/0944-2006-00122> accessed 2 September 2019. 29 T C Green and D J Mellor, ‘Extending Ideas about Animal Welfare Assessment to include ‘Quality of Life’ and Related Concepts’ [2011] 59(6) New Zealand Veterinary Journal <http://doi.org/10.1080/00480169.2011.610283> accessed 25 August 2019. 30 D J Mellor, ‘Animal Emotions, Behaviour and the Promotion of Positive Welfare States’ [2012] 60(1) New Zealand Veterinary Journal <https://doi.org/10.1080/00480169.2011. 619047> accessed 2 September 2019. 31 Vide inter alia: S Howell and J Fritz, ‘The Nuts and Bolts of Captive Chimpanzee Diets and Food as Enrichment: A Survey’ [1999] 2(3) Journal of Applied Animal Welfare Science <https://doi.org/10.1207/s15327604jaws0203_3> accessed 6 September 2019; A Brinch Riber and J A Mench, ‘Effects of Feed- and Water-based Enrichment on Activity and Cannibalism in Muscovy Duckling’ [2008] 114 <https://doi.org/10.1016/j.applanim.2008.03.005> accessed 6 September 2019; P A Rees, An Introduction to Zoo Biology and Management (Wiley-Blackwell 2011); D P Hocking et al, ‘Foraging-Based Enrichment Promotes More Varied Behaviour in Captive Australian Fur Seals (Arctocephalus pusillus doriferus)’ [2015] 10(5) <http://dx.doi. org.ezproxy.is.ed.ac.uk/10.1371/journal.pone.0124615> accessed 6 September 2019; S M Troxell-Smith et al, ‘Zoo Foraging Ecology: Preference and Welfare Assessment of Two Okapi (Okapia johnstoni) at the Brookfield Zoo’ [2017] 4(2) Animal Behaviour and Cognition <https:// doi.org/10.12966/abc.05.05.2017> accessed 6 September 2019;
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opposed to simply throwing the meat into the enclosure. This issue has an effect on animal welfare legislation because legislators may not necessarily have the technical knowledge to understand these nuances and may therefore draft legal provisions that do not take into account the numerous aspects that are not delineated in the terminology of the Five Freedoms. This could create a situation where an animal owner and/or keeper is providing an animal with good welfare conditions according to animal welfare law but is not actually providing good welfare conditions according to scientific knowledge.32 Mellor sums it up as “[the Five Freedoms do] not capture, either in the specifics or the generality of its expression, the breadth and depth of current knowledge of the biological processes that are germane to understanding animal welfare.”.33 One of the ways that England’s Animal Welfare Act34 and Scotland’s Animal Health and Welfare (Scotland) Act35 attempt to get around some of the issues in relation to the wording of the Five Freedoms, is by adjusting them into five welfare needs, as follows: 1. need for a suitable environment. 2. need for a suitable diet. 3. need to be able to exhibit normal behaviour patterns. 4. need to be housed with, or apart, from other animals. 5. need to be protected from pain, suffering, injury and disease.36 32 D J Mellor, ‘Animal Emotions, Behaviour and the Promotion of Positive Welfare States’ [2012] 60(1) New Zealand Veterinary Journal <https://doi.org/10.1080/00480169.2011. 619047> accessed 2 September 2019. 33 D J Mellor, ‘Updating Animal Welfare Thinking: Moving Beyond the “Five Freedoms” towards “A Life Worth Living”’ [2016] 21(6) Animals <http://dx.doi.org/10.3390/ani6030021> accessed 26 August 2019. 34 Animal Welfare Act 2006 <https://www.legislation.gov.uk/ukpga/2006/45/contents> accessed 5 October 2019. 35 Animal Health and Welfare (Scotland) Act 2006 (asp 11) <https://www.legislation. gov.uk/asp/2006/11/contents> accessed 5 October 2019. 36 - -, ‘Animal Welfare Act’ (RSPCA) <https://www.rspca.org.uk/whatwedo/endcruelty/changingthelaw/whatwechanged/animalwelfareact> accessed 6 October 2019; --. ‘Animal welfare’ (British Veterinary Association) < https://www.bva.co.uk/News-campaigns-and-policy/Policy/Ethics-and-welfare/Animal-welfare/> accessed 6 October 2019.
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The adjustment of the wording of the Five Freedoms from negative “freedom(s) from”, requiring an absence of something, into ‘welfare requirements’, renders them easier to enforce namely because it shifts the onus onto those who are responsible for animals to “take positive steps to ensure they care for their animals properly” and provide for these five welfare needs.37 The idea is that the law takes a more proactive approach in attempting to ensure that animals’ needs are met before they enter a negative state of welfare characterised by a lack of a particular welfare requirement. In 1994, Mellor and Reid developed the model known as the Five Domains,38 which has been updated several times to keep up with new scientific knowledge on animal welfare, such as in 2015 when it was revised in order to reflect the inclusion of positive welfare experiences.39 Mellor himself states that the Five Domains are not intended to replace the Five Freedoms, but rather to be used as a “focusing device” in understanding the myriad aspects of an animal’s body and surroundings that need to be considered when assessing animal welfare.40 The Five Domains were not developed to be implemented into animal welfare legislation. Rather they were developed to act as a consolidated basis for animal welfare assessments, and in fact have been implemented in one of the most popular animal welfare assessments, the Welfare Quality Network.41 Even though they were not developed with the intention of being set out in legislative frameworks, they can also be utilised in developing effective animal welfare legislation, as they set out what should be considered in animal welfare and reflect more contemporary knowledge such as positive
37 - -, ‘Animal Welfare Act’ (RSPCA) <https://www.rspca.org.uk/whatwedo/endcruelty/changingthelaw/whatwechanged/animalwelfareact> accessed 6 October 2019. 38 D J Mellor and C S W Reid, Concepts of Animal Well-Being and Predicting the Impact of Procedures on Experimental Animals. in Baker and others (eds), Improving the Well-Being of Animals in the Research Environment 39 D J Mellor and N J Beausoleil, ‘Extending the ‘Five Domains’ Model for Animal Welfare Assessment to Incorporate Positive Welfare States’ [2015] 24 Animal Welfare <http:// dx.doi.org/10.7120/09627286.24.3.241> accessed 3 September 2019. 40 D J Mellor, ‘Operational Details of the Five Domains Model and its Key Applications to the Assessment and Management of Animal Welfare’ [2017] 60(7) Animals <http://dx.doi. org/10.3390/ani7080060> accessed 1 September 2019. 41 - -, ‘Assessment Protocols’ (Welfarequalitynetwork) <http://www.welfarequalitynetwork.net/en-us/reports/assessment-protocols/> accessed 8 September 2019
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welfare experiences42 and affective states43. The Five Domains are set out as follows: The Physical/Functional Domains (1) The Nutrition Domain which includes the availability of appropriate nutrition and food, and the minimisation of the deprivation of food and water and malnutrition (hereinafter “Domain 1”); (2) The Environment Domain which includes environmental opportunity and choice, and the minimisation of negative environmental challenges (hereinafter “Domain 2”); (3) The Physical Health Domain which includes fitness and ableness, and the minimisation of disease and injury (hereinafter “Domain 3”); (4) The Behaviour Domain which includes behavioural expression and the minimisation of behavioural restriction (hereinafter “Domain 4”); The Mental Domain (5) The Mental Domain, which includes the encouragement of positive experiences such as security, playfulness, and contentment, and the minimisation of negative experiences such as distress, frustration, and boredom (hereinafter “Domain 5”).44 In reflecting on the Five Freedoms 25 years after their conception, Webster states that the main issue with the Five Freedoms is that they have 42 D J Mellor and N J Beausoleil, ‘Extending the ‘Five Domains’ Model for Animal Welfare Assessment to Incorporate Positive Welfare States’ [2015] 24 Animal Welfare <http:// dx.doi.org/10.7120/09627286.24.3.241> accessed 4 September 2019. 43 D J Mellor, ‘Animal Emotions, Behaviour and the Promotion of Positive Welfare States’ [2012] 60(1) New Zealand Veterinary Journal <https://doi.org/10.1080/00480169.2011. 619047> accessed 2 September 2019. 44 D J Mellor and N J Beausoleil, ‘Extending the ‘Five Domains’ Model for Animal Welfare Assessment to Incorporate Positive Welfare States’ [2015] 24 Animal Welfare <http:// dx.doi.org/10.7120/09627286.24.3.241> accessed 3 September 2019.
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been interpreted in a manner that their original founders never intended. While the Five Domains are meant to be a comprehensive model to be used to determine the state of an animal’s welfare through inputs, both internal and external, the Five Freedoms are only intended to serve as an indicator of the ideal state of animal welfare45 and to be used as a first step in understanding the “outcome indicators” that may show the level of welfare an animal is experiencing.46 The Five Freedoms are only meant to describe a snapshot of an animal’s state of welfare at a particular time, and are not meant to consider the causes and outcomes of factors that are leading to that state on a long-term basis.47 While the freedoms delineated in the Five Freedoms are crucial to take into account when considering animal welfare, it is clear that on their own they are not enough upon which to base animal welfare protection.48 These limitations need to be considered when implementing the Five Freedoms in animal welfare legislation.
2. The Five Freedoms and the Five Domains in the Animal Welfare Act – are they covered? The Animal Welfare Act does not specifically mention the Five Freedoms or the Five Domains. In fact, there are few instances within the Animal Welfare Act where specific obligations are actually set out regarding the general welfare of animals, and animal owners’ obligations in relation to the animals that they own or keep. Throughout the rest of the Animal Welfare Act there are some other, more detailed obligations set out, such as in article 26(2) which states that if animals “fall ill or are injured” while they are being transported they shall “receive first-aid treatment as soon as possible” and shall “be given appropriate veterinary treatment and, if necessary, undergo 45 J Barber, D Lewis, G Agoramoorthy, and M F Stevenson, Setting Standards for Evaluation of Captive Facilities. in Kleiman and others (eds), Wild Mammals in Captivity (The University of Chicago Press 2010) 22. 46 J Webster, ‘Animal Welfare: Freedoms, Dominions and ‘A Life Worth Living’’ [2016] 35(6) <http://dx.doi.org/10.3390/ani6060035> accessed 5 September 2019. 47 J Webster, ‘Animal Welfare: Freedoms, Dominions and ‘A Life Worth Living’’ [2016] 35(6) <http://dx.doi.org/10.3390/ani6060035> accessed 5 September 2019. 48 S P McCulloch, ‘A Critique of FAWC’s Five Freedoms as a Framework for the Analysis of Animal Welfare’ [2013] 26 J Agric Environ Ethics <https://doi.org/10.1007/s10806-0129434-7 > accessed 24 August 2019.
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emergency slaughter in a way which does not cause them any unnecessary suffering”. There are also provisions that ban certain activities outright due to the toll on the welfare of the animals participating in them, including article 31, which bans animal fights, and article 31A, which bans the use of animals in circuses. However, one may notice a pattern within the majority of the provisions of the Animal Welfare Act, whereby various articles completely neglect to set out substantive provisions and instead concentrate on giving the Minister responsible for animal welfare the power to make regulations on several issues. This system is important and practical when attempting to regulate certain uses of animals that, due to ever-changing requirements, need to be constantly updated and require a number of technical provisions that are more effectively set out in subsidiary legislation49 which is easier to update, such as the transport of animals. Nevertheless, it is perturbing that even the articles regulating more general aspects of animal welfare leave much of their substance to be set out in subsidiary legislation. In particular, article 7, concerning the keeping of animals, focuses completely on granting power to the Minister to make regulations, and does not set out general obligations. Moreover, article 8, regarding the care of animals, sets out some general provisions but also leaves it up to subsidiary legislation made by the Minister to regulate some of the most important matters related to animal welfare This situation presents several issues, and is important to take note of, especially considering the fact that “poorly designed legislation can exacerbate rather than solve problems”.50 One main issue is the possibility that regulations on certain matters may not be promulgated. For example, Part X of the Animal Welfare Act deals with the use of animals in competitions. Sub-article (1) of article 30 discusses the prohibition on entering animals into competitions if their body is found to contain certain substances, and article 31 prohibits the organisation of animal fights. However, the rest of the provisions are left in the hands of regulations. Article 27 in fact states that “competitions which test the speed or strength of an animal shall not be organised, nor shall an animal be entered for such competitions, unless the competitions are held in accordance with regulations made under this article”. 49 G Doonan, M Appelt and C Inch, ‘Role of Legislation in support of Animal Welfare’ [2009] 50(3) The Canadian Veterinary Journal <https://www.ncbi.nlm.nih.gov/pmc/articles/ PMC2643446/> accessed 4 October 2019. 50 Ibid.
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The glaring problem here is that, to date, no regulations on the hosting of animal competitions have been published. This leaves a vacuum regarding whether such animal competitions technically can or cannot be organised and where the animals involved only have the undetailed and rather vague provisions found in article 8 to protect their welfare, which, when considering the myriad uses of animals in competitions, may not be enough to secure the welfare of these animals, as discussed further below. Another problem arises when considering that even where subsidiary legislation exists, it may still neglect to set out even general provision on animal welfare standards to be followed. An example of this in Maltese legislation are the Keeping of Wild Animals in Zoos Regulations.51 While it should be evident that the activity of keeping exotic animals kept in zoos needs to be carried out within a detailed framework that protects the welfare of such animals, the Keeping of Wild Animals in Zoos Regulations completely neglect to set out substantive welfare requirements. Furthermore, while it is important to have specialised subsidiary legislation in relation to certain activities, it is not feasible to expect specific regulations to be drafted and published in relation to each and every species and/or, activity for which animals are used. Apart from being impractical, an attempt to create such a wide range of legislation may backfire in spreading the law too thin and thereby weakening it and in creating a complicated system of legislation which is difficult to interpret and enforce.52 This lacuna in detailed provisions on the general aspects of animal welfare means that the implementation of the Five Freedoms and the Five Domains in the Animal Welfare Act is even more crucial. The setting out of general provisions on animal welfare in line with the Five Freedoms and the Five Domains would ensure that the enforcers of the Animal Welfare Act will have the opportunity to rely upon these provisions in ensuring the welfare of the animals found in Malta if more specific regulations have not yet been published. This leads us to consider whether the general provisions in the Animal Welfare Act actually protect the welfare of animals, and whether the Five Freedoms, and even the Five Domains, are fully covered under these 51 Subsidiary Legislation 439.08 The Keeping of Wild Animals in Zoos Regulations <http://www.justiceservices.gov.mt/DownloadDocument.aspx?app=lom&itemid=11047&l=1> accessed 5 October 2019. 52 J Vapnek and M Chapman for the Development Law Service FAO Legal Office, ‘Legislative and Regulatory Options for Animal Welfare’ [2010] FAO Legislative Study 104 <http://www.fao.org/3/i1907e/i1907e00.htm> accessed 4 October 2019.
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general provisions. Before discussing the Five Freedoms and the Five Domains within the Animal Welfare Act, it is important to discuss a particular issue, this being the definition of the term “animal welfare”. The term “animal welfare” is found throughout the Animal Welfare Act, such as in sub-article (2) of article 3, which asserts that the State recognises “that it has the duty to promote the welfare of animals”, and sub-article (3) of article 8, which states that, “any person who keeps any animal or who agrees to look after an animal shall be responsible for its […] welfare”. Nonetheless, there is no definition of the term “animal welfare” provided for in the Act itself. This should not come as a surprise, considering that the definition of animal welfare has been the subject of international debate and has, over the years, been updated numerous times, with various definitions being postulated by different authors.53 This dynamic nature of the definition of animal welfare does not lend itself well to legislation. Bearing in mind that such a definition would need to be continuously updated, the setting out of a detailed definition may backfire.54 However, it is certainly advisable that a general understanding of animal welfare be set out in the legislation that governs the area in a manner that details general principles of animal welfare that must be considered with any and each species, but at the same time provides the opportunity for more technical criteria to be particularised in a prompt manner that allows for the law to keep up with scientific findings. This consideration regarding the definition of animal welfare is essential, in particular when considering sub-article (3) of article 8 which states that a person who keeps an animal or agrees to look after one is responsible for the animal’s “health and welfare”. To the untrained eye, it may seem that the inclusion of the words “health” and “welfare” is enough to ensure the full protection of these aspects of an animal’s life and existence. However, the reality is that there are two aspects to legislation – the legislation itself which sets out provisions that should be followed, and the enforcement of 53 M S Dawkins, ‘Behaviour as a Tool in the Assessment of Animal Welfare’ [2003] 106 Zoology <https://doi.org/10.1078/0944-2006-00122> accessed 1 October 2019; D M Broom, ‘A History of Animal Welfare Science’ [2011] 59(2) Acta Biotheoretica <http://dx.doi. org/10.1007/s10441-011-9123-3> accessed 1 October 2019. 54 J Vapnek and M Chapman for the Development Law Service FAO Legal Office, ‘Legislative and Regulatory Options for Animal Welfare’ [2010] FAO Legislative Study 104 <http://www.fao.org/3/i1907e/i1907e00.htm> accessed 4 October 2019.
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it, which is crucial in ensuring that law does not remain a paper tiger but effectively regulates the matters at hand.55 For proper enforcement to be carried out, the law cannot hope to rely on such broad and wide terms as “health” or “welfare” without providing even a vague indication as to what the intention behind the use of the terms are. The main provisions detailing general obligations on animal welfare in the Animal Welfare Act are set out in sub-articles (2), (3), and (4) of article 8, as follows: (2) Animals shall not be caused any unnecessary pain, suffering or distress and no animal shall be abandoned. (3) Any person who keeps any animal or who agrees to look after an animal shall be responsible for its health and welfare. (4) Any person shall take such steps as are reasonable in all the circumstances to ensure that the needs of an animal for which he is responsible or which he agrees to look after shall be met to the extent required by good practice and in pursuance to the good health and well-being of the animal. For the purposes of this sub-article, animal needs include the provision of suitable environment, provision of a healthy diet, allowance for the animal to exhibit normal behavioural patterns, provision of suitable housing, segregation from other animals where necessary and protection from pain, suffering, injury and disease. Keeping in mind the problems related to the use of such general terms as “health” and “welfare”, and therefore putting aside sub-article (3) of article 8 for a moment, it may be concluded that the full ambit of the Five Freedoms and the Five Domains is not clearly provided for in the Animal Welfare Act. Sub-article (2) of article 8 focuses on banning the cause of any unnecessary pain, suffering or distress to any animal. The Animal Welfare Act does not provide a definition of “pain”, “distress”, or “suffering”, which brings into play the already mentioned issue of using general definitions 55 --, ‘Charity reveals the Difficulties of enforcing Animal Welfare Law’ [2016] Veterinary Record <https://doi.org/10.1136/vr.i6532> accessed 4 October 2019.
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without providing for what such words are mean in the context of animal welfare. “Pain” as a term correlates to Freedom 3, which is the freedom from pain, injury or disease by prevention or rapid diagnosis and treatment, and Domain 3 relating to health. On the other hand, the term “distress” is included in the wording of Freedom 5, which is the freedom from fear and distress by ensuring conditions and treatment which avoid mental suffering. While it is not directly mentioned in the matrix used by the developers of the Five Domains,56 the term distress also correlates to Domain 5 relating to the mental state of an animal. “Suffering” as a term does not feature either in the wording of the Five Freedoms or the Five Domains matrix, and due to the broad nature of this term, it falls victim to the problems of interpretation as delineated above. Interestingly, the term “ill-treatment” is defined in article 2 of the Animal Welfare Act, however it is not utilised in article 8. The other terms found in the Five Freedoms and the Five Domains do not feature in this sub-article. On one hand, one could argue that the inclusion of the terms “suffering” and “distress” fully cover the Five Freedoms and the Five Domains, because a lack of any one of the Five Freedoms or aspects of the Five Domains may contribute to suffering and distress. However, the same argument in relation to the inclusion of terms that are too ambiguous in legislation applies here, where the lack of inclusion of specific provisions creates legislation that is difficult to interpret, enforce, and potentially defend in court.57 For example, one does not need to have specialised knowledge on animal welfare in order to understand that a lack of fresh water affects an animal in a negative manner and is likely to cause suffering or distress. However, consider a situation where an officer tasked with enforcing the Animal Welfare Act is faced with an animal that for all intents and purposes is not showing obvious signs of suffering and distress, but is not being provided with an appropriate amount of fresh water. By relying on general terms and not on detailed provisions (such as specifically setting out that an animal needs an appropriate amount of fresh water) the Animal Welfare 56 D J Mellor and N J Beausoleil, ‘Extending the ‘Five Domains’ Model for Animal Welfare Assessment to Incorporate Positive Welfare States’ [2015] 24 Animal Welfare <http:// dx.doi.org/10.7120/09627286.24.3.241> accessed 5 October 2019; D J Mellor, ‘Operational Details of the Five Domains Model and Its Key Applications to the Assessment and Management of Animal Welfare’ [2017] 60(7) Animals <http://dx.doi.org/10.3390/ani7080060> accessed 5 October 2019. 57 --, ‘Charity reveals the Difficulties of enforcing Animal Welfare Law’ [2016] Veterinary Record <https://doi.org/10.1136/vr.i6532> accessed 4 October 2019.
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Act is putting a burden on the officers that are tasked with enforcing it to prove that this lack of fresh water is directly affecting the animal. This may sound easy but in reality throws up a slew of issues regarding how such an officer would go about proving this matter. Nonetheless, a series of questions inevitably follow: 1. Will the officer entrusted with such enforcement be able to prove that the animal is in a state of suffering and distress, despite not showing obvious signs of these conditions? 2. How will the officer carry out a test in order to prove that the animal is indeed showing signs of suffering and distress? 3. How will the officer prove that the animal’s behaviour is directly linked to the lack of fresh water? Considering that the study of animal behaviour is complex and requires years of training and a basic general knowledge of species’ behaviour, will the officer be able to explain these findings to a court, even if the officer does manage to prove all of the above points? All of these issues could be avoided if the Animal Welfare Act were to directly state that any animal must be provided with an appropriate amount of fresh water. Sub-article (4) of article 8 is more detailed than sub-article (2). It states that a person must take reasonable steps to ensure that the needs of an animal that he is looking after are fulfilled , and further clarifying that such needs include the provision of a “suitable environment”, a “healthy diet”, “allowance for the animal to exhibit normal behavioural patterns”, “suitable housing”, “segregation from other animals where necessary”, and “protection from pain, suffering, injury and diseases”. Putting aside for a moment the term “suffering”, and the problems it creates as delineated above, the wording of sub-article (4) of article 8 of the Animal Welfare Act does in fact cover some aspects of the Five Freedoms as well as the Five Domains. The provision of a “suitable environment” and “suitable housing” is an integral part of ensuring Freedom 2, being the freedom from discomfort, and Domain 2, being the domain relating to environment. The provision of a “healthy diet” correlates to Freedom 1, being the freedom from hunger 63
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and thirst, and Domain 1, being the domain relating to nutrition It should be noted that an assumption is being made whereby the term “healthy diet” also includes the provision of fresh water. This must be noted since it is not generally good practice to word legislation in a manner that requires such suppositions.58 The “allowance for the animal to exhibit normal behavioural patterns” and the requirement to provide “segregation from other animals where necessary” correlate to Freedom 4, being the freedom to express normal behaviour, and Domain 4, being the domain relating to behaviour. The segregation of an animal may also affect other freedoms and domains in ensuring that such an animal is protected from physical attack from conspecifics, relating to Freedom 3 and Domain 3, and the triggering of mental distress, relating to Freedom 5 and Domain 5. The protection from “pain, […] injury and diseases” correlates to Freedom 3, being the freedom from pain, injury or disease, and Domain 3 relating to health. Keeping in mind the asides delineated above, it can be said that the majority of the Five Freedoms and the Five Domains are covered under subarticle (4) of article 8. However, the author argues that the wording here is still too general in nature. Taking as an example the term “suitable housing”, even within the main Animal Welfare Act, general provisions on what suitable housing should entail should be delineated in order to facilitate the interpretation and enforcement of the provision. The model of the Five Domains is more helpful in this context than the Five Freedoms, as the matrix that sets out the Five Domains59 is more detailed and can be utilised in providing a model to establish such provisions. A subsequent example would be that of “suitable housing”, where the Five Domains indicate that in ensuring the protection of Domain 2 regarding the environment, there are conditions that should be removed from, and conditions that should be made available within the housing of an animal, such as a thermal environment, which would allow the animal to feel comfortable, and the provision of fresh air.60 Notably, Freedom 5 being the freedom from fear 58 J Vapnek and M Chapman for the Development Law Service FAO Legal Office, ‘Legislative and Regulatory Options for Animal Welfare’ [2010] FAO Legislative Study 104 <http://www.fao.org/3/i1907e/i1907e00.htm> accessed 4 October 2019. 59 D J Mellor and N J Beausoleil, ‘Extending the ‘Five Domains’ Model for Animal Welfare Assessment to Incorporate Positive Welfare States’ [2015] 24 Animal Welfare <http:// dx.doi.org/10.7120/09627286.24.3.241> accessed 5 October 2019; D J Mellor, ‘Operational Details of the Five Domains Model and Its Key Applications to the Assessment and Management of Animal Welfare’ [2017] 60(7) Animals <http://dx.doi.org/10.3390/ani7080060> accessed 5 October 2019. 60 D J Mellor and N J Beausoleil, ‘Extending the ‘Five Domains’ Model for Animal Welfare Assessment to Incorporate Positive Welfare States’ [2015] 24 Animal Welfare <http://
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and distress and Domain 5 relating to the mental state of an animal, are not mentioned in sub-article (4) of article 8.
3. The Way Forward Considering all the above, the question arises as to whether the Animal Welfare Act requires a review and update in its wording. In the author’s opinion such an update is required for several reasons. Clear and definite legislation is extremely important in any sector, however it is indispensable when faced with an area such as animal welfare, that in general and across jurisdictions tends to suffer from a lack of various resources.61 A strong legislative framework would allow for officers that are already over-extended to carry out their work as set out in legislation in a more expedient and efficient manner, without having to jump through various hoops because of poorly-worded provisions. Furthermore, it seems that the Five Freedoms, while not completely covered, are more represented in the Animal Welfare Act than the Five Domains. This is not an ideal situation because, as discussed above in this monograph, the Five Freedoms lack provisions on certain aspects of animal welfare that are now considered to be integral to ensuring that an animal enjoys good welfare, such as the inclusion of positive welfare standards and the consideration of affective states and behaviours. The Animal Welfare Act needs to be updated to better represent the Five Domains matrix, specifically to better ensure the protection of the welfare of animals. One solution to this issue would be the amendment of article 8 of the Animal Welfare Act along the lines of promulgating a statement that any person taking care of an animal should follow general welfare principles that are set out in a schedule to the Animal Welfare Act. This schedule can then be used to delineate more detailed general provisions and include the requirements that are discussed in the matrix of the Five Domains model. dx.doi.org/10.7120/09627286.24.3.241> accessed 5 October 2019. 61 J Vapnek and M Chapman for the Development Law Service FAO Legal Office, ‘Legislative and Regulatory Options for Animal Welfare’ [2010] FAO Legislative Study 104 <http://www.fao.org/3/i1907e/i1907e00.htm> accessed 4 October 2019.
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So, for example, while the general principle can assert that animals must be provided with suitable housing, the more detailed provisions to it can set out the requirements for this, such as access to enrichment opportunities. The technical details of such enrichment would then be set out according to species-specific needs in subsidiary legislation, but what is important is that the requirement to provide enrichment is specifically set out in the main act to fill in where subsidiary legislation falls short. In such a case, what is important is that a provision is included in the Animal Welfare Act, whereby the schedule that sets out general principles may be amended through a legal notice. Legal notices are easier to amend than an act, as they do not require a bill and the process that goes along with the publication of a bill to be published, and therefore these general principles can be updated as required in a timely manner. What is certain is that the importance of the animal welfare legislation should not be underestimated. Animals are a crucial part of everyday human life, in ways that go beyond simply being kept as pets and being used for food or entertainment.62 As living beings they should be protected from suffering, and strong legislation is crucial in providing this protection. Our law recognises sentience of animals in sub-article (2) of article 3, following the example set out by the Treaty on the Functioning of the European Union, which states that “…in formulating and implementing [policies] the Union and the Member States shall, since animals are sentient beings, pay full regard to the welfare requirements of animals”.63 One of the aspects of sentience is the capacity to experience circumstances in a subjective manner. The possibility that the wording of the Animal Welfare Act makes its enforcement more difficult and less effective, and therefore decreases the amount of protection afforded to animals, goes against the very principles it sets out. Jeremy Bentham was clear in enunciating that the capacity of animals to suffer entitles them to protection under the law: It may come one day to be recognized, that the number 62 J Vapnek and M Chapman for the Development Law Service FAO Legal Office, ‘Legislative and Regulatory Options for Animal Welfare’ [2010] FAO Legislative Study 104 <http://www.fao.org/3/i1907e/i1907e00.htm> accessed 4 October 2019. 63 Treaty on the Functioning of the European Union 2007, article 13 <https://eur-lex. europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12012E/TXT:EN:PDF> accessed 5 October 2019.
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of the legs, the villosity of the skin, or the termination of the os sacrum, are reasons equally insufficient for abandoning a sensitive being […] the question is not, Can they reason? nor, Can they talk? but, can they suffer?64
64 J Bentham, An Introduction to the Principles of Morals and Legislation in Two Volumes, a new Edition corrected by the Author (Volume II, William Pickering 1828) 235-236 <https://books.google.com.mt/books?id=pEgJAAAAQAAJ&pg=PA235&redir_esc=y#v=onepage&q&f=false> accessed 5 October 2019.
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Paul Edgar Micallef Act XVI of 2019 – a missed opportunity to improve market regulation in Malta?
Dr Micallef is a senior visiting lecturer at the University of Malta. This paper reflects only his opinion and is based on the situation as it was on 10 April 2020.
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1. Introduction
I
n 2017, I wrote an article entitled ‘An effective regulatory enforcement and sanctions post the Federation of Estate Agents case: the issues’, where I considered the issues arising following the judgement of the Constitutional Court in the names Federation of Estate Agents vs. Direttur Ġenerali (Kompetizzjoni), l-Onorevoli Prim Ministru u l-Avukat Ġenerali [‘the Federation of Estate Agents judgement’].1 In that article I suggested what steps could be taken to address the issues raised in the Federation of Estate Agents judgement.2 When I wrote that article, Government had not as yet published any legislative measures to address the issues raised.3 The first proposals by Government to address the issues raised were published in a public consultation issued on the 10 August 2018 (the ‘August 2018 Public Consultation’), which consultation included a draft law with the amendments that Government then was proposing to the Competition Act and the Consumer Affairs Act.4 Subsequently, Bill Number 80 entitled ‘The Competition Act and Consumer Affairs Act and other Laws (Amendment) Act, 2019 (‘Bill Number 80’) was published on the 26 March 2019 and became law on the 31 May 2019 following the enactment of Act XVI of 2019 entitled ‘The Competition Act and Consumer Affairs Act and other Laws (Amendment) Act’.5 According to the ‘Objects and Reasons’ of Bill Number 80, the purpose of the amendments was to address the concerns raised by the Constitutional Court on the imposition of administrative penalties by nonjudicial bodies in the Federation of Estate Agents judgement of the 3 1 Paul Edgar Micallef, ‘An Effective Regulatory Enforcement and Sanctions Regime Post the Federation of Estate Agents Case: The Issues’ (2018) <http://lawjournal.ghsl.org/viewer/211/download.pdf> 92-116. 2 ibid 112 - 116. 3 My earlier article was written in late 2017 and therefore based on circumstances as they were at that time. The article was subsequently published in Volume XXVIII of Id-Dritt in May 2018. 4 ‘An Act to amend the Competition Act, Cap. 379 and the Consumer Affairs Act Cap. 378 and other Laws, to extend the competence of the Civil Court (Commercial Section) and to make ancillary and consequential provisions thereto’ (Government of Malta, 2018) 5 Bill 80 of 2019 - An Act to amend the Competition Act, Cap. 379 and the Consumer Affairs Act, Cap. 378 and other Laws, to extend the competence of the Civil Court (Commercial Section) and to make ancillary and consequential provisions thereto, and Act XVI of 2019 - An Act to amend the Competition Act, Cap. 379 and the Consumer Affairs Act, Cap. 378 and other Laws, to extend the competence of the Civil Court (Commercial Section) and to make ancillary and consequential provisions thereto.
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aforesaid public consultation.10 The amendments introduced by Government as reflected in Bill Number 80 in the main remained unaltered when the Bill was approved by Parliament and subsequently published as Act XVI of 2019 on the 31 May 2019.11 Government through the amendments in Act XVI of 2019, decided to address the concerns raised in the Federation of Estate Agents judgement by amending Chapter 379 and requiring that the DG Competition in relation to the laws he enforces, must apply to the Civil Court for a ruling to determine if there has been an infringement of competition law, and if the Court agrees that there has been a breach, for the Court to decide on the sanction to be imposed. In this context Government decided to introduce similar measures in relation to the DG Consumer Affairs and the laws enforced by that DG, but not in relation to other non-judicial bodies which at law have similar enforcement powers to those previously available to the DG Competition to impose administrative fines.12 In the amendments it introduced, Government went beyond the issues raised in the Federation of Estate Agents judgement by also requiring that both the DG Competition and the DG Consumer Affairs apply to the Civil Court if the DG in question considers that there is an act or omission which is in breach of the law enforced by that DG, and which act or omission should, in the opinion of the DG, be curbed. Hence for example, whereas previously the DG Consumer Affairs could issue a compliance order requiring the modification or deletion of a contractual term considered by him to be unfair in terms of the Chapter 378, subsequent to the amendments under Act XVI of 2019, the DG Consumer Affairs must apply to the Civil Court for the issue of a compliance order to ensure conformity with the law.13 Similarly, if the DG Competition considers that there is an infringement of Articles 5 or 9 of Chapter 379, and consequently, that it is necessary to stop any resultant anti-competitive practices, the DG is now required to apply to the Civil Court for a ruling determining the appropriate regulatory measures and, where applicable, any consequential sanctions where applicable.14 10 See Parliamentary debates during the second reading of Bill Number 80 held on the 8 April 2019. 11 See Permanent Committee for the Consideration of Bills discussion during the sitting of the 6 May 2019 <https://parlament.mt/en/13th-leg/adjunct-committee-for-the-consideration-of-bills/?type=committeedocuments>. 12 Such non-judicial bodies include the Regulator for Energy and Water Services and the Malta Communications Authority and the Electoral Commission amongst others. 13 The same procedure now applies where the DG Consumer Affairs wishes to curb acts or omissions relating to other aspects of consumer law which he enforces such as unfair commercial practices. 14 Articles 5 and 9 are the core substantive provisions of Chapter 379 and relate re-
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This situation is in contrast to the previous regime whereby both DGs were empowered to issue orders requiring compliance with the laws they enforced and, where necessary, to impose administrative fines. The former regime had its imperfections, and needed substantial amending. This consideration is demonstrated by the fact that in the case of competition law for a period of eight years, few enforcement orders were issued curbing anti-competitive practices and then only a few thousand euros were actually collected in administrative fines imposed for infringements of competition law requirements.15 This was hardly the hallmark of a pro-active competition watchdog curbing anti-competitive practices effectively and in good time. Matters were not that much better in case of the enforcement of consumer protection laws by the DG Consumer Affairs with few sanctions being imposed in the same span of time.16 It is of concern to note that notwithstanding the wide remit of both DGs, which covers most commercial activities, the regulatory measures taken by either DG over the years is low.17 This situation however does not justify the amendments introduced under Act XVI of 2019 which render the taking of any regulatory measures by either DG to curb malpractices entirely dependant on a court decision. Such amendments may actually exacerbate matters in so far as timely and effective enforcement is concerned given that now either DG must apply and wait for a court ruling in order to stop or punish malpractices. If anything, the enactment of Act XVI of 2019 should have been preceded by an in-depth analysis to see why the regulatory activities of both DGs following the establishment of the MCCAA in 2011 was relatively muted. A glance at the low number of regulatory decisions issued by both DGs, the number of contestations before the now defunct Consumer and Competition spectively to prohibited agreements and practices, and to abuse of a dominant position in the market. 15 See the response to PQ number 27947 given on 17 October 2016 whereby the Minister responsible for competition when asked about the number of administrative fines imposed and paid since 2011, stated that during this period two fines were imposed and paid, one of €1000 and another of €2000. In response to PQ number 10169 given on 3 June 2019, the Minister replied that subsequent to the Federation of Estate Agents judgement no more fines were imposed. See also: Ivan Camilleri, ‘Competition watchdog left powerless to implement decisions’ Times of Malta (30 August 2016) <https://www.timesofmalta.com/articles/view/20160830/ local/competition-watchdog-left-powerless-to-implement-decisions.623542>. 16 See the response to PQ 10170 where the Minister responsible for competition listed the number of administrative fines imposed up to 3 June 2019. 17 See response to PQ 10172 whereby the Minister responsible for competition and consumer protection gave a year-by-year break-down of the regulatory decisions issued by each DG.
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Appeals Tribunal (‘CCAT’) and, most revealing of all, the low number of fines collected by either DG, indicate that the former procedure was in need of an overhaul and necessitated the introduction of measures to provide for a more robust regulatory regime.18 The amendments introduced by Act XVI of 2019 may however have the reverse result of undermining timely and effective market regulation once all cases where regulatory measures need to be taken, must first be referred to the Civil Court for a decision by that Court authorising or otherwise the taking of the required regulatory measures, and where applicable determining what sanctions are to be imposed if there is a breach of the law. All this may lead to more lengthy proceedings than was the case under the former regime in addressing abusive market practices to the detriment of timely market regulation, once now the DG concerned, after making his investigations and reaching his conclusions that the law may have been flouted, must then initiate court proceedings and obtain a court ruling that there is a breach of the law and the imposition of any sanctions and, or orders to put a stop to the malpractice. Under the former regime it was up to the DG concerned to decide whether to act and what measures to impose. Whilst such regulatory decisions by either DG could be contested before the former CCAT, the DG concerned had the possibility of taking regulatory measures of his own initiative and issue an order to stop a malpractice in its tracks.19 This subsequent to the enactment of Act XVI of 2019 is no longer the case. Whilst the concerns raised in the Federation of Estate Agents judgement were certainly no simple matter to solve, the question arises whether the legislative measures introduced under Act XVI of 2019 address those concerns, and equally important whether they provide for an efficient and effective regime able to curb market abuse in good time. It is in the light of these considerations that the impact of the amendments introduced by Act XVI of 2019 on market regulation in Malta is evaluted in this article.
18 See response to PQ 101173 whereby the Minister for justice listed on a year-by-year basis, the appeals filed before the CCAT commencing from 2011 when the MCCAA came into being. 19 See Part XI ‘Compliance orders’ of Chapter 378 notably articles 94 to 96 thereof and Article 12A of Chapter 379 of the Laws of Malta, as worded prior to the enactment of Act XVI of 2019.
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2. The events leading to Act XVI of 2019 The need to amend the enforcement powers of the DG Competition arose following a constitutional application before the First Hall of the Civil Court (constitutional jurisdiction) by the Federation of Estate Agents (‘the Federation’) contesting the commencement of investigations by the DG Competition under the Competition Act.20 In its application the Federation argued that investigations by the DG in relation to a possible breach of Article 5(1) of the Competition Act (‘Chapter 379’) and of Article 101(1) of the Treaty on the Functioning of the European Union (‘TFEU’) constituted a breach of the fundamental rights of the Federation under Article 39(1) of the Constitution of Malta (‘the Constitution’) and, under Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Liberties (‘the European Convention’). The Federation said that if the DG Competition decided that the Federation had acted in breach of the aforesaid provisions, then the DG was empowered under Chapter 379 to impose an administrative fine of up to ten per cent of the turnover of the undertakings making up the Federation in the preceding business year. The Federation argued that the power of the DG to impose what it described as ‘severe fines’, rendered the nature of such administrative fines as criminal and therefore such infringements as tantamount to criminal offences. The Federation said that under the Constitution and under the European Convention a person, including a legal person such as the Federation, who is being investigated of having committed a criminal offence can only be tried before an independent and impartial court, and that consequently the provisions under Chapter 379 empowering the DG Competition to impose such fines were in breach of both the Constitution and of the European Convention.21 It is pertinent here to note that when these constitutional proceedings were filed, the DG Competition had not arrived at any conclusions, and more specifically had not imposed any fines, but was still in the process of investigating if there was a breach of competition law.22 20 The constitutional application was filed on the 11 November 2013 against the DG Competition, the Prime Minister and the Attorney General. 21 See judgement dated 21 April 2015 given by the First Hall in the names Federation of Estate Agents vs. Direttur Ġenerali (Kompetizzjoni) et at page 3 et seq. 22 Regrettably, many commentators including some MPs during the debate in Parliament on Bill number 80 were under the mistaken impression that the DG Competition had actually issued a decision imposing a 1.2 million euro fine on the Federation, when this was not the case. See the parliamentary debate during the second reading of Bill Number 80 held on the 8 April 2019 where at least one MP said that such a fine had been imposed.
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The First Hall concurred with these arguments by the Federation, deciding that though the alleged infringement in relation to which the Federation was being investigated was classified as being of an administrative nature, the nature and severity of the penalty that could be imposed rendered the infringement as being criminal in nature. The First Hall referred to Article 39(1) of the Constitution which provides that a person accused of a criminal offence must be given a fair hearing within a reasonable time before an independent and impartial court, noting that the DG Competition was not a court for the purposes of Article 39(1). The First Hall decided that the then applicable enforcement provisions of Chapter 379 which empowered the DG Competition to impose administrative fines were in breach of Article 39(1) of the Constitution and of Article 6(1) of the European Convention.23 The judgement of the First Hall was subsequently appealed by the DG Competition and the Attorney General before the Constitutional Court. This Court confirmed the judgement of the First Hall other than with regard to the alleged breach of Article 6 of the European Convention, whereby the Court, contrary to what the First Hall had decided, held that there was no breach of the European Convention.24 The Federation of Estate Agents judgement of the 3 May 2016 meant that Government had to consider what legislative measures to take to address the issues raised in that judgement. The gravity of the impact of this judgement on the enforcement powers of the DG Competition came to the fore a few months after the aforesaid judgement when the DG Competition in October 2016 issued a decision relating to the energy sector by deciding that Falzon Group Holdings Limited (‘Falzon Group’) had made pressure on M&N Camilleri Petrol Station to enter into a resale price maintenance agreement in breach of Article 5(1)(a) of Chapter 379, given that the said agreement had as its object the prevention, restriction of distortion of competition by indirectly fixing the selling price of diesel. The DG however decided not to impose any administrative fines in the light of the Federation of Estate Agents judgement, thereby leading to a situation where an undertaking was found to have acted in breach of competition law, but was not punished.25 23 ibid footnote 21 above, the Federation of Estate Agents judgement of the 21 April 2015 given by the First Hall at pages 27 et seq. The First Hall in particular referred to Articles 12A, 13, 13A and 21 of the Competition Act. 24 See the Federation of Estate Agents judgement of the Constitutional Court given on the 3 May 2016 at pages 42 et seq. 25 See Decision of the Office for Competition dated 4 October 2016 Case Comp-MCCAA 3/2015 at page 73 et seq. <https://mccaa.org.mt/media/1169/decision_4_10_16_non_ confidential_version-2.pdf>. See also the reply by the then Minister responsible for competi-
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At this juncture, Government should have taken remedial measures in very short order given that effectively the Federation of Estate Agents judgement as interpreted by the DG Competition, meant that unless the law was amended, the DG Competition did not have the necessary enforcement tools to curb any alleged infringements of competition law. Whilst it is not contested that the enactment of the necessary amendments required some time and careful thought given the nature of the constitutional issues involved, the possibility of at least adopting some provisional solution at law to ensure that the DG Competition could still ensure effective compliance with competition law does not appear to have been actively pursued at the time. One option then would have been for Government to amend Chapter 379 whereby the DG Competition could apply for the issue of a court order determining if there has been a breach of the applicable law and if in the affirmative, the sanction to be imposed. Such measures could have been introduced strictly as a short-term solution to ensure that the DG Competition was not at any stage bereft of the necessary tools at law to ensure compliance with competition law. In the interval Government could have initiated a wide-ranging exercise to consider what changes could be implemented to address matters in a comprehensive manner. Regrettably, none of this happened and instead for a period of three years the DG Competition effectively had no powers under competition law to stop and punish anti-competitive practices. Initially, it appears that the first response of Government to address the issues raised by the Federation of Estate Agents judgement was to amend the Constitution.26 Though no public consultation was made on the amendments which Government then was considering in this context, it appears that the amendments under consideration in order to address the issues raised by the Federation of Estate Agents judgement necessitated amendments to Article 39(1) of the Constitution, which amendments in turn required a twothirds majority vote of the members of Parliament and therefore the support tion to a PQ number 28519, where the Minister explained that because of the Federation of Estate Agents judgement decisions by the DG Competition imposing fines could not be imposed. ‘House of Representatives – Parliamentary Questions Website’ Parlament ta’ Malta (7 November 2016) <http://pq.gov.mt/PQWeb.nsf/7561f7daddf0609ac1257d1800311f18/c1257d2e0046dfa1c125806b00327f5b!OpenDocument> 26 Member of Parliament (‘MP’) Clyde Puli who in 2017 was the Opposition spokesman, in an article he wrote in The Times of Malta stated that Government had contacted the Opposition proposing amendments to article 39(1) of the Constitution. See: Clyde Puli, ‘Safeguarding consumers’ rights’ Times of Malta, (18 January 2017) <https://www.timesofmalta.com/articles/ view/20170118/opinion/Safeguarding-consumers-rights.636839>.
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of the Opposition in Parliament given that Government did not then enjoy a two-thirds majority.27 It appears however that this particular route was not pursued by Government, since the Opposition was not prepared to support amendments to the Constitution in order to address the issues raised by the Federation of Estate Agents judgement. The spokesman for the Opposition in explaining the stance of his party in opposing the amendments to the Constitution argued that if a law is declared to be unconstitutional then it is that law which should be amended and not the Constitution. The same spokesman also voiced his concern about what he described as being ‘the repercussions’ of such an amendment in that it would extend to all criminal offences.28 Effectively, this stance by the Opposition brought to a close any proposals to address the issues raised by the Federation of Estate Agents judgement by amending the Constitution. The next development occurred on the 10 August 2018 when Government finally issued a public consultation containing its proposals to amend the Competition Act, the Consumer Affairs Act and other laws to address the concerns raised by the Federation of Estate Agents judgement.29 The salient measures proposed in this consultation included the substitution of the CCAT with the Civil Court (Commercial Section) as the competent forum to determine appeals from regulatory decisions taken by either DG; the right of a further appeal from decisions of the Court of First Instance to the Court of Appeal on both points of law and of fact; the automatic suspension of a decision taken by either DG imposing a fine once an application contesting that fine has been filed before the Court; the application of a settlement procedure to all competition law infringements including abuse of dominance cases and other types of restrictive practices; and the requirement in relation to competition law that inspections of business premises require a priori a warrant issued by the Court of Magistrates.30 Significantly, Government also proposed that amendments be made to Chapter 378 since Government considered that the Federation of Estate Agents judgement was also relevant to the regulatory proceedings that could be instituted by the DG 27 See Article 66(2) of the Constitution which lists Article 39 as one of the articles of the Constitution which requires the vote of at least two-thirds of all the members of Parliament. 28 Clyde Puli, ‘Safeguarding consumers’ rights’ Times of Malta, (18 January 2017) <https://www.timesofmalta.com/articles/view/20170118/opinion/Safeguarding-consumers-rights.636839>. 29 ‘An Act to amend the Competition Act, Cap. 379 and the Consumer Affairs Act Cap. 378 and other Laws, to extend the competence of the Civil Court (Commercial Section) and to make ancillary and consequential provisions thereto’ (Government of Malta, 2018) 30 ibid. 1 - 3 which provide a résumé of the salient measures proposed.
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Consumer Affairs.31 Notwithstanding the impact of the proposed measures on the effective regulation of the market, the public response to the August 2018 Public Consultation was poor with only five respondents, two of which were foreign respondents.32 Of note in the Government response to the submissions made by the public to the August 2018 Public Consultation was the statement by Government that in the light of other recent judgements by the Constitutional Court a few weeks after the issue of the said consultation, a number of provisions contemplated in the proposed amendments would have to be redrafted.33 No details then, however, were given as to which proposed provisions as stated in the August 2018 Public Consultation would need to be redrafted and the precise reasons for doing so. On the 26 March 2019, Bill Number 80 entitled ‘An Act to amend the Competition Act, Cap. 379 and the Consumer Affairs Act and other Laws, to extend the competence of the Civil Court (Commercial Section) and to make ancillary and consequential provisions thereto’ was published in the Government Gazette. The Bill as indicated in the Government Response to the August 2018 Public Consultation provided for some significant changes to the measures originally proposed in the draft law published as part of public consultation made the previous August. As a result of these changes to original proposals by Government, in the case of infringements of either competition law or of consumer law, the DG concerned was now required to institute court proceedings against the person suspected of non-compliance, applying to the Civil Court for a decision that an infringement has been committed and if in the affirmative, determining the sanction to be imposed. The requirement onerous on either DG to apply to the Civil Court was not limited to those instances where the DG deemed it necessary that some form of punitive sanction be imposed, but also extended to those instances where either DG considered it necessary that an order requiring compliance with the law be issued against a non-compliant person. This was in contrast to the previous regulatory regime where either DG was empowered to issue such orders. These changes in Bill Number 80 were with some minor amendments approved by Parliament and subsequently published as Act XVI of 2019 in the Government Gazette on the 31 May 2019. 31 ibid. 3. 32 See Annex A to the ‘Government response to the Consultation on (An Act to amend the Competition Act, Cap. 379 and the Consumer Affairs Act Cap. 378 and other Laws, to extend the competence of the Civil Court (Commercial Section) and to make ancillary and consequential provisions thereto)’ 33 ibid. 12.
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3. The issues consequential to the changes introduced by Act XVI of 2019 The legislative amendments introduced under Act XVI of 2019 give rise to various issues.34 These include the omission by the legislator to provide for a solution which also addresses the possible infringement of Article 39(1) of the Constitution by public authorities other than the DG Competition and the DC Consumer Affairs, where such other authorities exercise their power at law to impose punitive sanctions; the failure to address the three year hiatus between the 3 May 2016 when the Federation of Estate Agents judgement was given and the enactment of Act XVI of 2019 during which period the DG Competition was bereft of the power to impose or to apply for the imposition of punitive sanctions; and the consequences following the migration of the regulatory powers including enforcement powers from the DG Competition and the DG Consumer Affairs to the Civil Court. These issues are considered below separately.
4. Measures to address the concerns vis-à-vis other public authorities? One glaring omission subsequent to the enactment of Act XVI of 2019 is that this law does not provide a comprehensive solution with regard to the declared purpose of Bill Number 80 to address the concerns raised by the Constitutional Court on the imposition of administrative penalties by non-judicial bodies. The ‘Object and Reasons’ to Bill Number 80, referred to two judgements of the Constitutional Court namely the Federation of Estate Agents judgement, and Thake nomine judgement. However Act XVI of 2019 fails to provide any legislative amendments in order to address the concerns expressed by the Constitutional Court in the Thake nomine judgement in relation to the alleged non-conformity of the applicable norms under the Financing of Political Parties Act (Chapter 544) enforced by the Electoral Commission which on the basis of that judgement, were declared by the Constitutional Court to be in breach of Article 39(1) of the 34 The list of issues discussed in this paper is not exhaustive and factors only the main issues which I believe must be addressed.
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Constitution.35 Moreover, the concerns about the imposition of administrative fines by non-judicial bodies go beyond the Federation of Estate Agents and the Thake nomine judgments, since such concerns also relate to a myriad of other public authorities apart from the DG Competition or the Electoral Commission. This is evident from the reply given by the Minister for Justice to a parliamentary question (‘PQ’) whereby the Minister provided a list of constitutional court judgments involving the contestation of the power of different public authorities to impose administrative fines.36 Furthermore, the non-conformity of the powers to impose punitive sanctions of public authorities other than the DG Competition was highlighted by the First Hall in its judgement in the Federation of Estate Agents case where that Court had referred to other public authorities such as the Malta Communications Authority and the Malta Resources Authority which authorities, as was the case with the DG Competition, have the power by law to impose punitive sanctions.37 Notwithstanding the evident need to address matters comprehensively, the legislator in enacting Act XVI of 2019 choose to introduce legislative solutions only in so far as these impact the role and enforcement powers of the DG Competition and DG Consumer Affairs within the MCCAA, ignoring that there are various other public authorities in Malta which by law have the power to impose punitive sanctions on noncompliant persons. This omission by the legislator was highlighted both by the Consumer Association following the publication of Bill Number 80 and during the debate in Parliament whilst Bill Number 80 was being given a second reading.38 The piecemeal approach taken by the legislator in addressing the concerns raised by the Constitutional Court only in relation to the enforcement powers of the DG Competition and DG Consumer Affairs raises the spectre of more constitutional cases by impacted persons objecting to the imposition of punitive measures by other public authorities. 35 See Constitutional Court judgement in the names Thake Rosette nomine vs. Kummissjoni Elettorali decided 8 October 2018 at page 111 et seq. Reference was made in particular to articles 22 and 44 of Chapter 544. 36 See reply to PQ number 8456 given by the Minister responsible for justice, <http://pq.gov.mt/PQWeb.nsf/7561f7daddf0609ac1257d1800311f18/c1257d2e0046dfa1c1258391003cc8e8!OpenDocument>. 37 ibid footnote 21, the Federation of Estate Agents judgement of the First Hall of the 21 April 2015, 35. 38 See: ‘Amendments to the Competition Law –CA’s comments’ Consumers Association Malta (6 April 2019) <http://camalta.org.mt/amendments-competition-law-cas-comments/> and remarks by MP Chris Said during the second reading of Bill Number 80 on the 8 April 2019.
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Irrespective of whether one agrees or not with the measures introduced under Act XVI of 2019 whereby the DG Competition and the DG Consumer Affairs are required to apply to court for the issue of any regulatory measures including punitive sanctions, the legislator will probably at some stage be confronted with the situation whereby a decision has to be taken on whether to continue addressing the issue of non-conformity with Article 39(1) of the Constitution on a piecemeal approach by amending separately the various applicable laws empowering the different public authority to impose punitive sanctions, or else consider the enactment of legislative measures which address the concerns raised by the Constitutional Court holistically, which would then entail amending the Constitution. The logical and practical approach is to adopt a comprehensive solution providing for norms which strike a balance between on the one hand the effective and efficient exercise of regulatory powers and on the other hand the rights of a person to a fair hearing. During the debate in Parliament on Bill Number 80, it was suggested that one measure that could be considered was to amend the applicable provisions of the Constitution to reflect the wording of article 6 of the European Convention. In this regard, it was pointed out that the Constitutional Court in the Federation of Estate Agents judgement whilst deciding that there was a breach of article 39(1) of the Constitution, conversely also held that there was no breach of article 6 of the European Convention.39 This suggestion could serve as the basis of a solution which would have the merit of addressing the concerns raised in a comprehensive manner.
5. The three-year hiatus of a DG Competition lacking enforcement powers One worrisome consequence as a result of the overdue enactment of Act XVI of 2019 on the 31 May 2019 is that for a period of three years, the DG Competition was powerless to impose any meaningful dissuasive sanctions.40 This point was made in the course of the debate on Bill Number 80 where Government was strongly criticised for waiting three years to enact 39 See remarks by MP Chris Said during the second reading of Bill Number 80 on the 8 April 2019. 40 At no stage did the Constitutional Court question the enforcement powers of the DG Consumer Affairs. Therefore, in practice there was nothing to stop the DG Consumer Affairs from exercising its powers to impose punitive fines post the Federation of Estate Agents judgement.
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amendments to the law to address the concerns raised in the Federation of Estate Agents judgement.41 Some months earlier the Consumer Association in its response to the August 2018 Public Consultation had been even more specific on this point, noting that in practice the DG Competition during the interim period had no effective tools to curb acts or omissions in breach of competition law.42 The negative impact of the delay in enacting the necessary laws was amply demonstrated a few months after the Federation of Estate Agents judgement, in a decision taken by the DG Competition involving an alleged breach by Falzon Group a leading operator in the energy sector, where the DG concluded that this operator had acted in breach of competition law, but because of the issues raised in Federation of Estate Agents judgement, decided not impose administrative fines.43 Moreover, Falzon Group subsequently instituted a constitutional lawsuit contesting this ruling by the DG Competition on the grounds that the DG in concluding his investigations and issuing a decision contravened the fundamental rights of the Group as protected by the Constitution and the European Convention. Significantly, the First Hall in a preliminary judgement did not uphold a plea by the DG Competition that the investigations undertaken by the DG did not constitute proceedings of a criminal nature given that the DG had declared that he was not imposing any fine on Falzon Group. In this preliminary judgement the Court referred extensively to the Federation of Estate Agents judgement, holding that the investigations initiated by the DG could still be equated with criminal proceedings.44 The Falzon Group ruling by the DG Competition heralded a period of close to three years characterised by lack of active regulatory enforcement coupled with the non-imposition of dissuasive sanctions in so far as noncompliance with competition law is concerned. During this three-year hiatus, the outcry against this state of affairs was subdued, other than for the concerns 41 ibid footnote 39, remarks by Said during the second reading of Bill Number 80. 42 See paragraph 1.1. of the response of the Consumer Association to the August 2018 Public Consultation, see ‘Amendments to Competition Law – CA Malta’s comments’ Consumers Association Malta (6 April 2019) <http://camalta.org.mt/amendments-competition-law-ca-maltas-comments/>. 43 ibid footnote 25, the decision of the Office for Competition in the Falzon Group case, at page 74. 44 See preliminary judgement of the 8th November 2018 by the First Hall in the names Falzon Group Holdings Limited et vs. Direttur Ġenerali (Kompetizzjoni) et. At the time of writing, this constitutional case was still pending.
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raised by the Consumer Association, The Times of Malta and a couple of MPs.45 In particular, the private sector was conspicuously silent throughout this period, this notwithstanding that abusive anti-competitive practices if unchecked could cause considerable harm to business, consumers and the market in general. The lack of any such significant outcry that such a state of affairs was allowed to subsist for such a long period is of concern when one considers the importance of the role of the MCCAA, through the DG Competition and DG Consumer Affairs, as the principal guardian of effective market regulation.
6. The migration of regulatory powers from the DGs to the Civil Court The focus of the amendments under Act XVI of 2019 is tied to the migration of the regulatory powers to impose sanctions and to issue orders to ensure compliance with competition law and consumer law from the DG Competition and the DG Consumer Affairs on the one hand onto the Civil Court on the other. This migration gives rise to various concerns related to the timely imposition of corrective measures to curb malpractices and to ensure compliance with the law. The paramount consideration which stands out in this regard is that whereas previously either DG could of his initiative issue an order to ensure compliance with the law or impose a fine, now in either case the DG in question must apply to the Civil Court, convince that Court that there are valid grounds for the issue of the fine or order being requested, and then wait for a court decision. All this means that when compared to the 45 See for example reports carried in the issues of The Times of Malta on the 12 October 2016 and 22 February 2018 both by journalist Keith Micallef entitled respectively ‘Competition Office reform delay creates fines loophole’ and ‘Competition Authority two years in limbo’. Keith Micallef, ‘A watchdog with no teeth - Belated action will enable Competition Office to impose fines’ Times of Malta 12 October 2016 ‘<https://www.timesofmalta.com/articles/view/20161012/ local/a-watchdog-with-no-teeth-belated-action-will-enable-competition-office.627731>; and Keith Micallef, ‘Competition authority still in limbo 2 years after judgment rendered it toothless’ Times of Malta (23 January 2018) <https://www.timesofmalta.com/articles/view/20180223/ local/competition-authority-still-in-limbo-2-years-after-judgment.671390>. The Consumer Association in its response to the August 2018 Public Consultation raised similar concerns. See: ‘Amendments to Competition Law – CA Malta’s comments’ Consumers Association Malta (6 April 2019) <http://camalta.org.mt/amendments-competition-law-ca-maltas-comments/>. In a PQ MP Chris Said asked about the measures being taken by Government in the aftermath of the Federation of Estate Agents judgement, see: ‘House of Representatives – Parliamentary Questions Website’ Parlament ta’ Malta (3 October 2018) <http://pq.gov.mt/PQWeb.nsf/7561f7daddf0609ac1257d1800311f18/c1257d2e0046dfa1c125833c004a7e1a!OpenDocument>.
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previous regime, more time will be taken to stop or punish malpractices in the market since now, not only must the DG in question decide that there are valid grounds to proceed, but in order to do so that DG needs a Court decision. One can argue that both Chapter 378 and Chapter 379 contemplate measures which at least on paper can be taken in the short term to deal with malpractices whose impact on the market is immediate. Specifically, under both laws, it is possible for the respective DGs to apply for the issue of an interim order by the Court to address cases of urgency. However, even in this context, the law provides for time constraints that may impact the taking of corrective measures in good time. Hence, whereas under the previous regime the DG Consumer Affairs could in advance of a final decision, order interim measures to remedy a situation which could give rise to immediate and serious harm to the collective interests of consumers. In doing so the DG was required to give ‘a reasonable opportunity’ to the person against whom the interim measures were being contemplated. This person could contest the interim measures taken by the DG before the CCAT. However, any such appeal did not suspend any interim measures taken.46 Conversely, under the new regime the DG Consumer Affairs must apply to the Civil Court for the issue of interim measures. The person against whom the interim measures are being requested, in turn has eight days to reply. The Court is then required to decide the application ‘with urgency’. Any interim measure issued by the Court is enforceable upon its delivery and no appeal is possible.47 This means that under the new regime at least eight days, probably more, will pass before any interim measure can be ordered by the Court, this irrespective of the immediacy of the impact that an alleged malpractice may have on the market. This is in contrast to the former regime where the DG Consumer Affairs had more latitude in the taking of interim measures as he was not bound by a fixed period during which the person investigated could respond given that the DG was required to give the person concerned ‘reasonable opportunity’ to respond. In theory, such reasonable opportunity if justified by the urgency of the specific circumstances could be less than the eight days period now applicable. Under Chapter 379, the situation is in most respects similar since in urgent cases involving serious and irreparable harm to competition the DG Competition must apply to the Civil Court for the issue of an interim order. The person against whom the interim measure 46 cle 14B. 47
Consumer Affairs Act (Chapter 378 of the Laws of Malta prior to Act XVI of 2019), Artiibid. as amended, Article 12E.
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is requested has eight days in which to reply and the Court is then required to decide the application with urgency.48 Under the previous regime in cases of urgency, which involved a risk of serious and irreparable damage to competition, the DG Competition was of his own initiative empowered to order interim measures on the basis of a prima facie finding of infringement of Articles 5 or 9 of Chapter 379.49 It is suggested that a more flexible regime should be considered giving the Civil Court more leeway to issue interim measures in short order. This is the case, for example, with the issue of a prohibitory injunction where the Court can in urgent cases reduce the period of reply conceded by law to a person against whom a prohibitory injunction is being requested.50 An issue of some concern is that the amendments introduced under Act XVI of 2019 in migrating the authority to impose fines from the DGs to the Civil Court, do not distinguish between the quantum of the fine that may be imposed, and that therefore the sanction irrespective of whether a thousand euro may be imposed or conversely a million euro, must in all instances be referred to the Civil Court for its decision. This consideration fails to factor the fact that one of the cardinal elements underlying the Federation of Estate Agents judgement was precisely the severity of the fine that could be imposed by the DG Competition. It appears that the legislator in enacting the amendments to both Chapter 379 and Chapter 378, considered that the respective DGs should in absolute terms be bereft of any authority to impose any fine irrespective of the amount involved. One questions whether this was too drastic a measure and if instead some latitude should have been given to enable either DG to impose fines not exceeding a pre-established maximum in relation to relatively minor instances of non-compliance. As things stand, either DG requesting the imposition of a sanction must in all instances apply to the Civil Court, hardly the ideal way of dealing effectively with relatively minor infringements. Act XVI of 2019 provides for the abolition of the former CCAT and instead empowers the Civil Court as the competent adjudicative forum with the role not of an appellate forum as was the case with the CCAT, but as already discussed, with the new role of effectively deciding if there has been a breach of the law, and if there has been of the sanctions to be 48 49 50 875.
Competition Act (Chapter 379 of the Laws of Malta), Article 15. ibid. Article 15 prior to the amendments under Act XVI of 2019. Code of Organisation and Civil Procedure (Chapter 12 of the Laws of Malta), Article
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imposed, thereby assuming functions that were previously onerous on both DGs.51 Irrespective of whether one agrees with the migration of the regulatory powers from both DGs to the Civil Court, one questions whether the abolition of the CCAT was necessary. From a reading of the Federation of Estate Agents judgement one of the issues relating to the non-conformity of the previous regime with the Constitution was that the CCAT was not a court for the purposes of Article 39(1) of the Constitution more so as it was composed of a judge and two lay members who were not members of the judiciary.52 Rather than doing away with the CCAT, one measure which could have been considered was to modify the composition of the CCAT by empowering the presiding judge to decide issues relating to punitive measures on his own, whilst however retaining the lay members in so far as decisions relating to non-punitive issues are concerned. One point, which was not sufficiently discussed during the amendments to Chapter 379 and to Chapter 378, was the importance of having in place expert adjudicative fora. Rather than abolishing the CCAT, measures should have been considered as to how its role could be enhanced given the complexity of issues relating to competition and consumer affairs whereby it is imperative that the competent adjudicative forum have access to expert persons hailing from different professions who can provide an informed opinion.
7. Conclusion There are two specific aspects to consider when evaluating Act XVI of 2019. The first aspect relates to the impact on market regulation in so far as the roles of both DGs are concerned. Act XVI of 2019 provides for measures, which in relation to effective competition law and consumer law enforcement are debateable. The Constitutional Court in the Federation of Estate Agents judgement questioned the powers of the DG Competition to impose punitive fines on non-compliant undertakings. In that judgement, however, the Court did not question the faculty of the DG Competition to issue orders requiring compliance with competition law as distinct from the power to impose fines if there is non-compliance. Yet, notwithstanding one of the new salient measures under Act XVI of 2019 requires that the DG Competition must in the case of the issue of such compliance orders apply 51 See the August 2018 Public Consultation at pages 1 and 2. 52 See the Federation of Estate Agents judgement of the Constitutional Court given on the 3 May 2016 at page 44 et seq.
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to the Civil Court and await the judgement of that Court before proceeding any further. The fundamental rights protected under Article 39(1) of the Constitution relate to the right of a person charged with a criminal offence to be afforded a fair trial within a reasonable time before an independent and impartial court established by law. Nowhere in this provision is there any reference to a fair trial before a court if the person in question is required to comply with an order requiring him to desist from an anti-competitive practice. If anything, the right to a fair trial before a court would arise if that person does not comply with such an order and as a result is then liable to punitive sanctions. The legislator should reconsider the changes introduced under Act XVI of 2019 by affording both DGs the power to issue such orders, without the need to seek a court judgement. As things stand with the changes under Act XVI of 2019, remedial measures to address malpractices whose negative impact is immediate, may not always be taken in good time this to the detriment of consumers and of competition. The other aspect relates to the wider picture concerning the impact on the enforcement by non-judicial bodies in general. The measures under Act XVI of 2019 impact only the powers of the DG Competition and DG Consumer Affairs, ignoring that according to the ‘Objects and Reasons’ of the Bill Number 80 the concerns raised by the Constitutional Court were not only with regard to the imposition of administrative penalties by the DG Competition, but also to non-judicial bodies in general.53 This failure by the legislator will possibly lead to other constitutional lawsuits contesting the enforcement and punitive powers of other non-judicial bodies. If this situation is to be avoided, then a comprehensive solution is required factoring amendments to the article 39(1) of the Constitution. Otherwise, Government may be faced with a situation whereby it will have to amend a multitude of sector specific laws on an ad hoc basis in response to constitutional lawsuits contesting the enforcement powers of diverse public authorities. To answer the question posed in the title to this paper, the amendments introduced in Act XVI of 2019 are regrettably a missed opportunity and do not serve to provide for a more effective, efficient and perhaps most important of all timely market regulation. The inclusion of a requirement that the DGs must invariably now seek a court order not only to impose sanctions but to issue orders to prohibit practices that are of detriment to fair competition and, or to consumers, is a step in the wrong direction. The measures 53 As observed earlier the Objects and Reasons of Bill Number 80 even refers to Thake nomine judgement which relates to the enforcement powers of the Electoral Commission.
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introduced appear to ignore the factual realities of the regulatory regime as it was between 2011 and 2019, where in practice few successful regulatory interventions took place and even fewer sanctions were imposed. The focus of any change to the law should have addressed the causes underlying the inefficiencies characterising regulatory intervention rather than adding a tier of regulatory clearance for either DG in order to curb malpractices. There is some irony in the fact that the process that initially lead to the amendments in question was heralded by a lawsuit based on the very remote possibility that DG Competition could impose 1.2 million euro fine, this when in the preceding five years the amounts in total actually recovered by the same DG amounted to a mere three thousand euro. Much emphasis has been made on the importance of safeguarding fundamental human rights as protected by Article 39(1) of the Constitution and rightly so. Conversely, not much has been said about the need to ensure that there is in place an effective regulatory regime which can curb malpractices in good time. In most EU Member States, the national competition regulators have the power to impose fines and to issue orders to prohibit malpractices in good time. The exercise of these powers is subject to judicial oversight, whereby the person under investigation has the right at law to contest any measures before the competent adjudicative fora. The same should apply in the case of Malta if there is to be in place a regulatory regime which is empowered to take effective and timely measures to ensure compliance. In a previous article, I wrote on this subject prior to the enactment of Act XVI of 2019, I had suggested that amendments to the Constitution should be a matter of last resort but should not be excluded outright.54 Now, with the benefit of hindsight looking also at the wider picture and the possible impact on the enforcement powers of other non-judicial bodies, I believe that amending Article 39(1) of the Constitution is unavoidable if there is to be a comprehensive solution to the concerns raised by the Constitutional Court in the Federation of Estate Agents judgement. The practicable solution is to amend article 39(1) of the Constitution to reflect the provisions under article 6 of the European Convention, this in the light of the consideration that the Constitutional Court had in the Federation of Estate Agents judgement decided that there was no breach of the European Convention.55 54 Paul Edgar Micallef, ‘An Effective Regulatory Enforcement and Sanctions Regime Post the Federation of Estate Agents Case: The Issues’ (2018) <http://lawjournal.ghsl.org/viewer/211/download.pdf> 112-116. 55 This measure was suggested by MP Chris Said during the second reading on Bill Number 80 during the sitting of the 8 April 2019.
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The fundamental requisite that must be safeguarded is that a person under investigation once confronted with a regulatory ruling has the possibility to contest such a ruling before an independent adjudicative forum before it is enforceable. The inclusion of such a measure would be in line with the underlying spirit of the law intended to balance on the one hand the need to curb malpractices in good time in the interest of the general public wellbeing and on the other hand the protection of fundamental human rights.
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Ryan Dalli The Liquidator: A straightforward job, or a gateway to personal liability?
Dr Ryan Dalli is a Master of Advocacy graduate practicing in the Corporate sectors and mainly specialises in mergers and acquisitions, commercial transactions, and corporate insolvency. He is also currently reading for an LL.M. in European Business Law at the University of Malta.
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1. Introduction
T
he current economic climate – a time where numerous business ventures are being forged, and most take the form of a company, a partnership or a similar commercial entity vested with legal personality, and possibly even vested with limited liability. However, due to shifting market interests as well as numerous ideas never getting off the ground and forever remaining mere concepts, the need to eventually ‘clean up’ and liquidate these entities is becoming ever more apparent. This, therefore, necessitates the inclusion of a person who shall deal with this matter in the fairest and most efficient way possible, and this is where the role of a liquidator comes into the fray. While much concern has been given to the duties and personal liability of the partners and the officers (most noticeably the board of directors) of an entity, little thought is ever given to a liquidator. This paper will identify the significant obligations and duties of a liquidator within the sphere of Maltese Law, as well as evaluate the premise of personal liability of a liquidator should he not fully adhere to said duties and obligations. Before delving into the matter any further, it is important to note that this paper will not focus on the different modes of winding up, although a simple explanation will be given below, but rather have a focus on the role of a liquidator, particularly on the implications that such role presents to the appointed individual. In addition, this paper will have a particular focus on the provisions as contained within the Companies Act 19951 (the ‘Act’) and limiting the scope to a liquidator’s role within the dissolution and winding up of a company. Also, a small comparative analysis with English Law will be made due to the obvious similarities between the provisions contained therein and those contained within Maltese Law. One might also take into consideration the fact that since the Act came into force, the role of a liquidator has not only been expounded upon by virtue of the amendments implemented to the Act, but also by certain European Union legislation, significantly the Regulation on Insolvency Proceedings (Recast)2 (the ‘Regulation’). The provisions of the Regulation will not be the subject of this paper, yet these will be taken into consideration. 1 2
Companies Act, Chapter 386 of the Laws of Malta. Regulation (EU) 2015/848 on insolvency proceedings (recast).
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2. Dissolution and Liquidation Before delving into the matter further, it is important to note that the process of dissolution is distinct, although related, to the winding up procedure. Essentially, the dissolution precedes the winding up, and is very much characterized by the decision to terminate the company. This may be done either on the grounds which are listed in the law or within the statute of the company itself. On the other hand, winding up (which is the actual process of the liquidation) correlates to the completion of the affairs of the company and signifies the payment of debts and liabilities of the company, including any other distribution to the shareholders themselves (if any excess capital exists). During the process of winding up, the company still retains a separate legal personality, which subsists until its name is struck off the Register of Companies3. Furthermore, it should be noted that the Act caters for situations where the name of a company may be restored to the Register, thus reopening the winding up,4 and, to a certain extent, signifies a temporary resurrection of the company, albeit quite an exceptional procedure.5 The Act stipulates that a company may be dissolved and consequently wound up either voluntarily or by virtue of a court-regulated procedure. It may be of benefit to note that there are several instances when the court may proceed to terminate the company,6 but the company may only be wound up voluntarily by virtue of an extraordinary resolution.7 The various options will be expounded upon below.
2.1 Court Dissolution and Subsequent Winding Up The court may dissolve and subsequently wind up a company where an extraordinary resolution has been passed to do so, or if the business of the company is suspended for an uninterrupted period of twenty-four (24) months, or the company is unable to pay its debts, or the number of members or directors of the company has been reduced to below the 3 Companies Act, Chapter 386 of the Laws of Malta, Article 4(4). 4 ibid Article 300B. 5 581/2013 Vella Falzon Nicolai Av Dr. Noe vs The Registrar of Companies et, First Hall (Civil Court) 14 November 2013. 6 7
Chapter 386 of the Laws of Malta, Article 218. ibid Article 214.
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minimum as prescribed by the Act for a period exceeding six months, or where the court is of the opinion that there are grounds for sufficient gravity to warrant the procedure in question. The court may also proceed to dissolve and subsequently wind up the company upon the occurrence of an event as prescribed in the company’s statute. By virtue of Act I of 2018, the Code of Organisation and Civil Procedure8 and the relevant Subsidiary Legislation contained thereunder, were amended so as to confer that jurisdiction of matters related to the Act to the Civil Court (Commercial Section),9 which includes any procedure appertaining to the dissolution and winding up.10 Winding up by the court necessitates, as is usual with most court procedures, that it is initiated by virtue of an application. Such application may be filed by the company itself following a decision in the general meeting, by the board of directors, any debenture holder, any creditor, a contributory,11 the Registrar of Companies or the Official Receiver.12 Following said application, the court may decide to dismiss the matter or alternatively proceed to issue a winding up order and include any provisional order it may deem fit.13 Until such decision is taken as to whether to issue the winding up order, the court may appoint a so-called Provisional Administrator to administer the affairs of the company as the court itself may specify. Upon the issuance of a winding up order by the court, a liquidator must be appointed by the court to wind up the affairs of the company. The liquidator may be nominated by the contributories or the creditors of the company. Nominations are typically made at meetings of the contributories or creditors and the court will give preference to the nomination made by the creditors, depending on whether the company is in a solvent or insolvent state at the time.14 After making a winding up order, the liquidator will proceed with the process of winding up, including collecting any necessary amounts as might be applicable in terms of the contributories, namely the unpaid share 8 Chapter 12 of the Laws of Malta. 9 S.L. 12.19, Civil Court (Establishment of Sections) Order 2003, L.N. 396/2003, regulation 5A. 10 Companies Act , Chapter 386 of the Laws of Malta, Article 218. 11 Defined within Articles 215-217 of the Act; loosely may be defined as any person liable to contribute to the assets of a company in the event of dissolution, more specifically the possible past and present members of the companies. 12 Companies Act, Chapter 386 of the Laws of Malta, Article 218. The Official Receiver is a court appointed official for the purposes of the Act and his powers are encapsulated within art 225-226. 13 ibid Article 219. 14 ibid Article 230.
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capital,15 and fixing and ordering any proof of debts which might be owed to creditors,16 and this until the affairs of the company have been completely wound up.17 During the course of a court winding up, the aforementioned Official Receiver may opt to appoint a committee consisting of not more than five creditors of the company to assist the liquidator in his function (the ‘Liquidation Committee’).
2.2 Voluntary Dissolution and Subsequent Winding Up As explained above, the dissolution and the consequent winding up may also be done voluntarily. This would mean that this procedure is initiated by the members of the company via an extraordinary resolution. Once this is taken, the members of a company may still resolve to have the winding up done by virtue of the abovementioned court procedure, yet as will be explained below, this is not a requisite. Upon taking such extraordinary resolution, the company (more specifically its officers) shall deliver notice thereof to the Registrar of Companies within fourteen (14) days18 and as from that date, it shall cease to conduct business except in so far as may be necessary.19 From this point onward, filing (or omitting to file) a singular document, termed the Declaration of Solvency, would determine whether the mode of winding up will be a members’ voluntary winding up or a creditors’ voluntary winding up. As the name implies, this is a document filed to the Registrar of Companies, by the board of directors, declaring that such board believes that the company will be able to pay off its debts in full within a period not exceeding twelve months.20
15 16 17 18 19 20
ibid Article 251. ibid Article 255. ibid Article 264. ibid Article 265. ibid Article 267. ibid Article 268.
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2.2.1 Members’ Voluntary Winding Up & Creditors’ Winding Up Upon the filing of the Declaration of Solvency, the mode of winding up shall be that of members’ voluntary winding up. If the aforementioned Declaration of Solvency is not filed within the stipulated time frame as mandated by the Act, the mode of winding would be that of a creditors’ voluntary winding up. It is to be said, that although a company may be in a solvent state, any omission to file the Declaration of Solvency would still render the mode of winding up to be a creditors’ voluntary winding up. The main difference between the two modes of winding up would essentially come down to who takes the decisions during the winding up process, specifically whether it would be the members taking the decisions or creditors deciding upon any matters which are envisaged in the Act. However, it would seem that the most important decision which both groups need to take is the appointment (and possible removal) of a liquidator, since at the end of the day the majority of decisions are taken by the liquidator himself. Maltese courts have emphasised that during a voluntary winding up, caution, attention and vigilance are particularly important from the perspective of a liquidator,21 which is quite understandable due to the lack of court supervision. Furthermore, one should note that Maltese law on liquidation heavily borrows influence from English Law, specifically the English Insolvency Act of 1986. So much so, that under English law, similarly to Maltese law, the modes of winding up are either by court, 22 or by virtue of a voluntary winding up procedure,23 which similarly deposes the possibility of both a members’ voluntary winding up,24 as well as a creditors’ winding up.25 Again, in terms of the two different modes of voluntary winding up, the resolutive condition would again be whether the directors of the company opt to file a Declaration of Solvency.26
21 973/2012 Mizzi Associated Enterprises (C 1372) vs Kenneth Dimech proprio et nomine, First Hall (Civil Court) 31 October 2016. 22 Insolvency Act 1986, Chapter VI (UK). 23 ibid Chapter II. 24 ibid Chapter III. 25 ibid Chapter IV. 26 ibid Article 90.
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3. A Brief Overview of the Role of the Liquidator Many are of the opinion that a liquidator is merely entrusted with the distribution of the assets of the company being wound up. This is not really the case as his role is much more diverse than one would be led to believe. That being said, his main function is to ‘get in, realise and distribute a company’s assets for the benefit of its unsecured creditors’.27 Maltese Courts have precisely outlined that a liquidator is to take custody of the company’s patrimony, investigate all the claims advanced against the company by its creditors, decide any questions which arise, make a plan of how to distribute the assets of the company, and finally, distribute said assets once the plan has been approved.28 Under Maltese Law, a liquidator is required to hold the profession of an advocate, a certified public accountant, a certified public accountant and auditor or must otherwise be registered with the Registrar of Companies as a fit and proper person to exercise the function of a liquidator. In addition, the Act holds that the abovementioned persons may still be prohibited from holding the office of a liquidator if, within the four (4) years preceding the date of dissolution, they have held any office in connection with the company or they had any other connection with the company.29 Interestingly, the article concerning said restriction also includes ‘a person in accordance with whose directions or instructions the directors of the company are accustomed to act,’ which seems to be somewhere along the lines of the definition given to shadow directors by Maltese commentators.30 The Act also imposes other conflict-based restrictions on a liquidator, such as the prohibition precluding a liquidator from making any disposition of the assets of the company in favour of certain persons such as his spouse, partners, a commercial partnership in which he is involved in or a company within which he is appointed as a director. Upon the appointment of a liquidator, the powers of the company’s officers effectively cease.31 This is due to the fact that, upon said appointment, 27 Simon Passfield, Appointment of Liquidator, (2016). 28 989/2008 Mallia Jesmond vs Il-Palma Agricultural Supplies Co. Limited (C10770), First Hall (Civil Court) 7 July 2015. 29 Companies Act , Chapter 386 of the Laws of Malta, Article 305. 30 Prof. Andrew Muscat, Principles of Maltese Company Law (2nd Edition, Malta University Press 2019) p.504. 31 Companies Act , Chapter 386 of the Laws of Malta, Article 295.
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a liquidator is essentially vested with the entirety of the administration of the company, so much so that Maltese commentators on the issue have basically outlined that the only power which is essentially left to the company officers correlates to the proof of notice of any meeting pursuant to Article 297 of the Act.32
4. The Duties and Powers of the Liquidator Once a person assumes the role of a liquidator, he also begins to bear a number of very important duties, irrespective of the mode of winding up. It is to be said that, similar to a director of a company, it is commonly accepted that, ‘upon appointment a liquidator becomes an agent of the company; fiduciary duties obviously flow from this’.33 Thus, a liquidator is very much entrusted with fiduciary duties as contemplated under the Civil Code34. The appointment of a liquidator will only be effective upon the delivery of a notice of appointment to the Registrar of Companies.35 The liquidator is entrusted to take control of any property (including any rights) to which he is of the belief that the company being wound up is entitled to.36 The Act includes a list of powers which are granted to the liquidator during a court winding up; these powers essentially give the liquidator full control over the affairs of the company, including the taking of judicial decisions on behalf of the company (as well as the judicial representation required thereto), carrying on the business affairs of the company, effecting any payment to be made to the creditors in accordance with their ranking,37 as well as doing all such things as may be necessary for the winding up. Hence, these may be considered as very extensive powers.38 32 Prof. Andrew Muscat, Principles of Maltese Company Law (2nd Edition Ma;ta University Press 2019) p.681. 33 Top Brands Ltd & Ors v Sharma & Ors [2014] EWHC 2753 (Ch). 34 Civil Code, Chapter 16 of the Laws of Malta. 35 Companies Act, Chapter 386 of the Laws of Malta, Article 235. 36 ibid Article 238. 37 Fascinating is that the court is deemed to be a creditor in a court dissolution which normally has first ranking as a creditor as can be seen in the 6/1995/3 Konkors ta’ Kredituri ta’ Da Vinci Ltd. Vs X, First Hall (Civil Court) 13 November 2000. 38 Companies Act , Chapter 386 of the Laws of Malta, Article 238.
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Said powers are however subject to scrutiny by the court and the Liquidation Committee (if one has been appointed). These powers shall be subject to the control of the court, and any contributory or creditor may apply to court in respect of their exercise. Perhaps linked to the above, it would also seem that in a court winding up, great emphasis is given to both creditors and contributories involved to give direction to the liquidator, through various meetings appertaining to the same. The liquidator is granted the ability to refer certain matters to the court so that he may rely on the court’s direction on the issue (and in turn limiting his liability). Such guidance might be of great importance, as any person who feels aggrieved by an action taken by the liquidator may also apply to the court for its reversal, modification or confirmation.39 Two of the more obvious duties of the liquidator in a court winding up is to keep proper records in terms of the meetings conducted as well as to keep the proper accounts of the company being wound up40. It would seem that an optional power is also given to the liquidator in the possible instance where a report which is to be drawn up by the Official Receiver denotes any sort of fraud committed by the company,41 as the liquidator may take part in the examination either personally or be represented by an advocate.42 The Act also envisages the possibility of granting the liquidator certain powers which are traditionally conferred upon the court such as those appertaining to conducting meetings, drawing up of lists of contributories, making payments and deliveries, as well as fixing the time by which debts and claims may be proved.43 That being said, the Act does stipulate that the same powers are subject to the control of the court. The Act mandates that rectification of the register of members requires special leave of court and any calls to be made require either special leave of court or the sanction of the Liquidation Committee. Taking the above into consideration, in a nutshell the role of a liquidator under Maltese law is very much similar to the same role under English Law, whereby in terms of a court winding up, the liquidator has the function, ‘to 39 ibid Article 239. 40 ibid Article 240 & Article 242. 41 The Official Receiver is a government appointed official who is considered as the default liquidator until the role is fulfilled. One of his duties is to draw up a report in respect of Article 227 of the Act to which he may make a further report if he considers that any fraud is committed. 42 Companies Act , Chapter 386 of the Laws of Malta, Article 260. 43 ibid Article 263.
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secure that the assets of the company are got in, realised and distributed to the company’s creditors and, if there is a surplus, to the persons entitled to it.’44 With respect to voluntary winding up, it would seem that the liquidator is much less restricted in terms of his duties and powers. This may be seen within the context of the respective provision 288, which provides in many instances that the powers allocated to the court in that specific mode of winding up, are to be exercised by the liquidator. However, these powers are still subject to some discretion as some may require the sanction of an extraordinary resolution, either made by the company or by the creditors, and these include the payment to creditors in terms of their ranking and the power to make compromises or arrangements with any creditors. In a voluntary winding up, a liquidator is entrusted to deliver to the Registrar of Companies a notice of such appointment.45 Noteworthy, Maltese courts have stipulated that in a voluntary winding up, a liquidator is not merely entrusted with the submission of the necessary documentation to the Registrar of Companies, but must ensure the necessary diligence in the process, so much so that one of his main priorities should be transparency and making sure that the entirety of the process is conducted in accordance with the law.46 In a voluntary winding up, a liquidator is tasked with paying the company’s debts and adjusting the rights of the contributories.47 In a members’ voluntary winding up procedure, a liquidator, should he be of the opinion that the company will be unable to pay its debts, is entrusted with the duty to summon a meeting of the creditors where he shall lay before them a statement of the assets and liabilities of the company and effectively convert the voluntary winding up to a creditors’ winding up.48 Where a voluntary winding up continues for a term longer than twelve (12) months, the liquidator must summon a general meeting and another general meeting for each subsequent twelve (12) months, within three (3) months of the expiration of said twelve (12) month term, in order to present an account of his affairs including any receipts and proof of expenditure. Such meeting may also be requested by the members of the company holding ten percent (10%) of the 44 Insolvency Act 1986, s 143 (UK). 45 Companies Act , Chapter 386 of the Laws of Malta, Article 290. 46 1050/2016 Hal Mann Construction Limited (C 9762) vs The Registrar of Companies et, First Hall (Civil Court) 30 March 2017. 47 Companies Act , Chapter 386 of the Laws of Malta, Article 165. 48 ibid Article 272 & Article 276.
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voting rights,49 (which might seem similar to the procedure under Article 129 of the Act, where shareholders wish to call a general meeting). Upon fully winding up the affairs of the Company, a liquidator is entrusted to make an account of the winding up, explain how the winding up took place and how the distributions of the property of the company are to be made and, importantly, draw up a scheme of distribution attesting to the amount due in respect of each share from the remaining assets of the company and, where applicable, cause the accounts of the company to be audited. The scheme of distribution must be presented in a final general meeting, and within seven (7) days of said meeting, the liquidator must transmit the documents to the Registrar of Companies.50 The name of the company will be struck off the Register by the Registrar of Companies within three (3) months of receipt of the documents, unless within these three (3) months, a creditor or any person having an interest applies to court via an application in order to defer the date of striking off.51 A creditors’ voluntary winding up is somewhat similar to a members’ voluntary winding up in terms of the duties and obligations of a liquidator. As stated prior, one of the salient differences is that a liquidator is to be appointed by the creditors of the company during a meeting which is convened by the board of directors of the company.52 Furthermore, a Liquidation Committee may be appointed53 so as to assist the liquidator with the process. Similarly, the liquidator is entrusted to hold meetings after twelve (12) month periods within three (3) months expiration of the twelve (12) month periods, in a similar manner as stated above, yet these meetings are to be held between creditors,54 rather than members. Additionally, another very similar provision, the liquidator may be requested to hold a meeting by creditors representing at least ten percent (10%) of the value of creditors in the company, or alternatively by members holding ten percent (10%) of the voting rights within the company.55 The final general meeting, along with the submissions to the Registrar of Companies, are to be made in the same manner as a members’ voluntary winding up; however, a liquidator is also obliged to hold an additional meeting between the creditors of the company 49 ibid Article 273. 50 ibid Article 274. 51 ibid Article 275 – this ability is also granted to any other person who appears to the court to have an interest in the matter. 52 ibid Article 279. 53 ibid Article 280. 54 ibid Article 283. 55 ibid.
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wherein he shall also lay a copy of the same documents which are to be presented in the final general meeting.56 The provisions regarding the delay in the striking off are also replicated within a creditors’ voluntary winding up.
5. Liability of the Liquidator – Analysis of the Act As one will note in terms of the Act, most of the provisions referring to liability on the part of the liquidator are largely linked to penalties for breach of his duties, and the same are issued by the Registrar of Companies. The penalties are contained within the Eleventh Schedule of the Act and the amounts vary depending on the omission on the part of the liquidator. They might be considered somewhat hefty when a comparison is made to those having to do with the ongoing maintenance of the company, such as submitting an Annual Return or failure to submit the Beneficial Ownership Form as contained within SL 386.1957, yet this is understandable due to the possible repercussions. However, one may evaluate the same in a different light, and considering the current landscape of the corporate world, specifically investments in the millions being made in start-ups, it might even be considered as minimal in comparison. Said penalties range between four hundred sixty-five Euro, eighty-seven cents (€465.87) and two thousand, three hundred twenty-nine Euro, thirty-seven cents (€2,329.37) and some of these come with the possibility of a further daily penalty for every day the default on the part of a liquidator continues. These penalties correlate to the above-mentioned duties and seem to be strictly attached to voluntary winding up procedures. This might seem reasonable, due to the fact that, as one would imagine, in a court winding up a liquidator would be subject to court discretion and court supervision. As noted above, a liquidator is to summon a creditors’ meeting if he is of the opinion that the assets of the company are insufficient to cover its debts, and failure to do so would render the liquidator liable to a penalty.58 Another penalty will be incurred, during a members’ voluntary winding up as well as a creditors’ voluntary winding up, upon the omission of holding the requisite meeting should the winding up continue for more than twelve (12) months 56 ibid Article 285. 57 S.L. 386.19, Companies Act (Register of Beneficial Owners) Regulations 2018, L.N. 374/2017. 58 Companies Act, Chapter 386 of the Laws of Malta, Article 272.
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and any subsequent further twelve (12) month period.59 Failure to provide the Registrar of Companies with the mandated documents and forms at the end of a voluntary winding up would also render a liquidator liable to a penalty.60 Another penalty is also incurred upon failure to call the final meetings in the modes of voluntary winding up. Since it is up to a liquidator to notify the Registrar of his appointment, a penalty would also be incurred for any failure to do so.61 Additional penalties shall also be borne by a liquidator should he fail to adhere to the periodic reporting obligations,62 as well as any failure to keep the proper books for the period specified in the Act after the liquidation of the company, specifically for a period of ten (10) years.63 However, a liquidator is also faced with more serious exposure to personal liability in terms of the Act, besides the aforementioned penalties. The Act creates certain offences and contemplates personal liability of a liquidator in circumstances in which officers of a company would also be exposed to such liability. One of the most significant provisions contained within the Act which imposes liability on a liquidator is Article 312. This Article states that where in the course of winding up, regardless of the mode chosen, it appears that a person who has acted as an officer of the company, or liquidator of the company in question, or has been concerned with the company (which includes any person who has participated in the promotion, management or formation of the company), is found to have misapplied or retained or became accountable for any money or property of said company or is found to be guilty of any improper performance or any breach of duty in relation to the company, the court may, by virtue of an application filed by the Official Receiver, the liquidator, a creditor or a contributory, examine the conduct of said person. Upon examination, the court may compel the person liable to either repay, restore or account for the money or property or any part of it (including any interest rate which is established by the court) or alternatively to contribute a sum to be allocated to the company’s assets by way of compensation for the improper performance or breach of duty. Noteworthy, is that the court deciding upon the matter is granted a certain degree of discretion in applying the provisions of this Article.64 59 60 61 62 63 64 2018.
ibid Article 273 & Article 283. ibid Article 274 & Article 284. ibid. ibid Article 322. ibid Article 324. 268/2016 Catherine Grech Mallia vs Paolo Buffa et, First Hall (Civil Court) 30 January
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It would also seem, as will be explained further below, that certain cases have contemplated the possibility of fraudulent trading under Article 315 of the Act on the part of a liquidator. This type of action is considered as quite precarious in nature due to the fact that it contemplates unlimited and direct liability with respect to any person involved in the business of the company, arguably the shareholders and the representatives of the company.65 In addition, the second sub-article of Article 315 imposes criminal liability on such persons.66 Article 315 of the Act is discussed further below. Another provision worth mentioning is that relating to ‘Disqualification Orders’. The Act explains that a Disqualification Order is an order whereby a person, without special leave of court, shall not be able to act, among other capacities, as a liquidator.67 Pursuant to Article 320, upon the application of the Attorney General or the Registrar of Companies, the Disqualification Order may be issued against a person if found guilty of an offence under the Act, other than an offence which is punishable by a fine, or any person who has infringed any requirement under the Act whereby the consequence of such infringement would be that said person would become liable to contribute assets of the company or where he becomes personally liable to the debts of the company. One would notice that one of the grounds upon which a disqualification order may be issued is the failure to comply with Article 312. Contravening a Disqualification Order would amount to the possibility of incurring a fine of up to forty-six thousand and five hundred and eighty-seven euro and forty-seven cents (€46,587.47) or imprisonment for a term of up to three (3) years,68 thus it would seem that this would amount to a criminal sanction. In addition to the abovementioned provisions, there have been other instances where claims were brought forward against a liquidator under other provisions of the Act such as those under Article 308, which relates to fraud by officers of the company with respect to the property of the company.69 English judgements70 on the issue seem to consider a liquidator 65 9/2009 G. Molton Company Limited vs Dr. Borg Raymond et, Court of Magistrates (Civil) 21 March 2011. 66 501/15 Dr. Kenneth Grima nomine vs Dr. Renald Micallef propio et nomine, First Hall (Civil Court) 31 May 2018. 67 Companies Act , Chapter 386 of the Laws of Malta, Article 320 (4). 68 ibid Article 320 (6) 69 501/2015 Dr. Kenneth Grima Nomine vs Dr. Renald Micallef proprio et nomine, First Hall (Civil Court) 31 May 2018. 70 Powertrain Ltd [2015] EWHC B26 (Ch) (02 November 2015).
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as actually being an officer of the company, thus possibly being liable to other provisions as contained within Chapter V of Sub-title III of Title II of Part V of the Act. Interestingly as well, the articles found within the English Insolvency Act 1986 relating to ‘Malpractice before and during a Liquidation’,71 are similar to the articles found within the Act regulating ‘Offences antecedent to dissolution or in course of winding up’.72 That being said, there are some differences on the matters which should be pointed out. The comparative analysis with English law will be discussed further below.
6. Liability of the Liquidator – Judgements, Commentaries and Comparative Analysis Maltese judgements have explored the theme of personal liability of the liquidator in quite some detail and have been able to provide comprehensive explanations of the relevant provisions. The importance of the judgements which evaluated such actions cannot be undermined. It would also seem that Maltese courts tend to refer to British jurisprudence, as well as British commentators on the issue, due to the fact that as mentioned prior, the relevant provisions of the Act were somewhat modelled on the provisions contained within the English Insolvency Act of 1986. The Maltese judiciary does emphasise the fact that a liquidator, even in a members’ voluntary winding up, is bound by the legal obligation to do all acts which are necessary so as to properly wind up the business of the company and to conduct the relevant distribution73. Special consideration is to be made in terms of determining the assets of the company in an autonomous and objective manner, as any omission thereof would lead to negative consequences, especially on third parties.74 One might first analyse certain actions which may be brought against 71 Insolvency Act 1986, Chapter X. 72 Companies Act , Chapter 386 of the Laws of Malta, Chapter V, Sub-title III, Title II, Part V. 73 780/2014 Ax Holdings (C3595) et vs the Registrar of Companies, First Hall (Civil Court) 24 March 2015. 74 1050/16 Hal Mann Construction Limited (C 9762) vs The Registrar of Companies et, First Hall (Civil Court) 30 March 2017.
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a liquidator in terms of fraudulent trading provisions. Certain judgements, especially the recent judgement of Samchrome FZE vs Danko Koncar et,75 have attempted to answer the question of whether it would be possible to institute such type of action against a liquidator. In order to resolve this question, the honourable court in the aforementioned judgement referred to a Maltese commentator on the issue,76 whereby said commentator denoted that this action may be claimed against, ‘any other person, as long as they are knowingly parties to the fraud’,77 and further commented that it would seem that this action may be claimed against any person who perpetually participates in fraudulent trading, including a liquidator. Upon further examination of Maltese judgements on said article, it would seem that this action is mainly applied against the directors and more limitedly against the shareholders; however, pursuant to a comparative analysis, this is not its sole scope. With respect to this, Maltese courts note that this action under Article 315 of the Act is modelled upon Article 213 of the English Insolvency Act 1986, although it has been noted that while there is a striking resemblance, the action as stipulated under English law may only be filed by the appointed liquidator.78 That being said and with reference to the above, it would seem that English courts believe that such an article is deemed to be so far-reaching, that it even has an application of an extra-territorial nature,79 thus supporting the stance taken by Maltese courts that the terms ‘any person’ may apply to anyone who was responsible for the fraudulent conduct envisaged. With respect to wrongful trading provisions,80 Maltese courts are of the opinion that it is the board of directors which might be found liable by virtue of said provisions,81 and rightly so as this relates to the continuance of trade when one is aware of the insolvent state of the company; in fact, the court pointed out that such action may only be filed by the appointed liquidator. Perhaps more interesting is the examination of Article 312 of the Act. The 75 842/2014 Samchrome FZE vs Danko Koncar et, First Hall (Civil Court) 31 May 2018. 76 Specifically Prof. Andrew Muscat, Principles of Maltese Company Law (2nd edn, Malta University Press 2019) p. 360. 77 842/2014 Samchrome FZE vs Danko Koncar et, First Hall (Civil Court) 31 May 2018. 78 ibid. 79 Re Paramount Airways Ltd [1993] Ch 223 (also known as Powdrill v Hambros Bank (Jersey) Ltd) – the term ‘extra-territorial’ presents its natural meaning and may thus be applied to any person wherever resident. 80 Companies Act, Chapter 386 of the Laws of Malta, Article 316. 81 842/2014 Samchrome FZE vs Danko Koncar et, First Hall (Civil Court) 31 May 2018 .
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Courts pointed out that this article is modelled on Article 212 the English Insolvency Act 1986,82 hence making an examination of the English provision very much useful so as to aid in the interpretation of its Maltese counterpart. Under English law, the claim is referred to as a ‘misfeasance claim’, which therefore confers a wrongful exercise of a lawful obligation and a breach of duty. English courts have described such an action as ‘a summary remedy against liquidators and other.’83 Furthermore, in terms of their commentary on the action, they have acknowledged that ‘s.212 refers expressly to breach of fiduciary duties in the context of wrongdoing by a liquidator. Being procedural in nature, s.212 does not create new or additional obligations or duties, rather it provides the route of recourse for breach of established obligations and duties identified therein.84’ Interestingly enough, upon further analysis of the English provision, it would seem that it is commonly perceived that a liquidator owes a duty to the creditors as a whole and not to mere individual creditors. Thus, although an individual creditor may pursue such recourse, the action must be instituted in the names of creditors as a whole rather than in an individual capacity.85 It would also seem that it is necessary that under English Law, before a claim of this nature is brought against a liquidator, he must necessarily be removed from office.86 The English courts also emphasise that if any compensation is ordered, said compensation must exhibit a connection between the sum ordered and the actual loss incurred;87 thus, there seems to be some sort of limit in terms of liability incurred under Section 212 of the English Insolvency Act 1986. That being said, should a liquidator be found liable under the said English provision, there is a strong element of court discretion which is involved in determining the amount to be compensated.88 Upon examination in terms of Maltese law, the emphasis of Article 312 seems to be on the delinquent conduct performed. In fact, an important remark which has been made is that for a person to be able to avail himself of such an action under Maltese law, the illegal behaviour of the accused must be serious.89 Maltese Courts also expect the liquidator to be proactive 82 83 84 85 86 87 88 89
ibid. Core VCT Plc (In Liquidation), Re, Chancery Division [2019] EWHC 540 (Ch), 15 Mar 2019. Top Brands Ltd & Ors v Sharma & Ors [2014] EWHC 2753 (Ch). (Oldham and others v Kyrris and another [2003] EWCA Civ 1506. ‘Misfeasance claims in corporate insolvency: overview’ [Thomson Reuters] [2019]. Joint Liquidators of CS Properties (Sales) Ltd [2018] CSOH 24. Stone and Rolls Ltd (In Liquidation) v Moore Stephens (A Firm) [2009] UKHL 39. 842/2014 Samchrome FZE vs Danko Koncar et, First Hall (Civil Court) 31 May 2018.
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and take the necessary initiative during the winding up process. Specifically, they tend to criticise any passive position which is taken by a liquidator, and comment that he must strictly take decisive and concrete decisions in the winding up process.90 That being said, the conduct of a liquidator must be taken into consideration on a case by case basis, due to the fact that taking on a passive role and awaiting for certain things to unfold would not necessarily render the liquidator liable under Article 312 as can be seen in the Liquidation proceedings of Il-Palma Agricultural Supplies Co Ltd (C-1077)91 where the court even went as far to say that if a liquidator is liable to certain penalties under the Act (which in this case was the failure to hold the necessary meetings as well as the omission to submit the necessary documentation to the Registrar of Companies), the court should still not find the said liquidator liable under Article 312. Thus, it would seem that Maltese Courts would expect quite a serious act or omission in order to find a liquidator liable under the aforementioned provision. It would seem important to take into consideration that the action provided under Article 312 may only be instituted by the Official Receiver, a liquidator, a creditor or by a contributory.92 An important inference to be made is that according to the Maltese Courts, upon strict analysis of the wording of the provisions in question, it would seem that such article is written in the past tense,93 and on this basis, Maltese Courts have concluded that this action may only be claimed against a person who had occupied the role of the liquidator, and not the person who currently occupies the said role.94 The application of the English counterpart of this provision seems to correlate in this circumstance. Hence, it would seem that this limitation might create some issues, due to the fact that certain judgements note that Article 312 is an action by which a liquidator might be sanctioned,95 in which case the prior removal of the liquidator, possibly under the provisions of Article 289 of the Act which require a valid reason to be shown, is required.96 The removal of the defaulting liquidator and his replacement by a new liquidator must 90 989/2008 Mallia Jesmond vs Il-Palma Agricultural Supplies Co. Limited (C10770), First Hall (Civil Court) 7 July 2015. 91 ibid. 92 842/2014 Samchrome FZE vs Danko Koncar et, First Hall (Civil Court) 31 May 2018. 93 973/12 Mizzi Associated Enterprises (C1372) vs Dimech Kenneth proprio et nomine, First Hall (Civil Court) 31 October 2016. 94 842/2014 Samchrome FZE vs Danko Koncar et, First Hall (Civil Court) 31 May 2018.. 95 780/2014 Ax Holdings (C3595) et vs the Registrar of Companies, First Hall (Civil Court) 24 March 2015. 96 501/15 Dr. Kenneth Grima Nomine vs Dr. Renald Micallef proprio et nomine, First Hall (Civil Court) 31 May 2018.
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necessarily take place because it is unlikely that the defaulting liquidator would agree to this himself. Over the years, Maltese courts have also referred to certain precautions which a liquidator should take so as to warrant against any liability. For example, as part of the process, courts emphasise that the liquidator is to determine the consistency of all the assets of the company, where special attention must be given to any immovable assets,97 wherein even certain judgements mandate the necessity of Public Registry searches so as to properly determine if there are any guarantees involved. English courts have also commented that a liquidator must ensure that any contract which is entered into during winding up clearly denotes that he is acting as an agent of the company and not in his own personal capacity98 (similarly to the Maltese approach in terms of mandate and fiduciary obligations).
7. Conclusion It would seem that a liquidator is entrusted with a number of varying duties as well as various possibilities for contingent liability. It is also to be mentioned, that although not expressly mentioned above, there is even the possibility of liability in terms of the aforementioned fiduciary duties, which would not necessarily constitute an action under the Act, but it may constitute a claim for damages under the Civil Code. One may also envisage the possibility of the liquidator being found liable for misappropriation99 under the Criminal Code (Chapter 9 of the Laws of Malta). One might also mention the fact that the Regulation provides for certain duties which are to be observed by a liquidator, such as the duty to cooperate with courts100; thus, there might even exist a situation where a liquidator might be subject to liability on an international aspect. Hence, the importance of being diligent and analysing the situation prior 97 780/2014 Ax Holdings (C3595) et vs the Registrar of Companies, First Hall (Civil Court) 24 March 2015. 98 Stead Hazel & Co v Cooper [1933] 1 KB 840. 99 Criminal Code, Chapter 9 of the Laws of Malta, Article 293. 100 Regulation (EU) 2015/848 on insolvency proceedings (recast), Article 43.
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to being appointed as liquidator is imperative for said liquidator to avoid any liability. In this respect, it is considered good practice to request such information as audited accounts of prior years, management accounts and a trial balance in order to have a full and fair view of the company itself. Also, liquidators nowadays have even implemented the practice of being provided with indemnity for anything which does not result from their own incompetence or wrongdoing. Thus, it would seem that although it is not common in Malta for a liquidator to be held liable in terms of the Act, it is very much possible. From an examination of the above, one might note that a misconduct could have dire consequences in terms of personal liability. The importance given to the role of a liquidator under the Act cannot be stressed enough, and it is obvious that it is a misconception that such role is merely an obligation put on the company in order to complete the winding up process. Any individual who wishes to take on such role should also bear in mind that a specific action, namely that contemplated in Article 312 of the Act provides an opportunity for the liquidator’s abilities to be scrutinised, and if such abilities are not up to the standard required by law, personal liability may ensue.
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Luke Mizzi Emma-Marie Sammut Can Directors and Shareholders be held liable for acts committed by the Company?
Luke Mizzi (LL.D) (LL.M) (Lond) is an Associate at GTG Advocates and forms part of the Corporate and Financial Services team. After graduating with a Doctor of Laws from the University of Malta in 2016, Luke was admitted to the Maltese Bar in 2017. In 2019, Luke completed a Master of Laws in International Finance and Banking Law from the University College London (UCL). Emma-Marie Sammut is a fourth year student at the University of Malta, reading for a Bachelors in Law. She presently works for GTG Advocates as a legal trainee. Emma was previously Għaqda Studenti tal-Liġi’s Publications Officer for the term 2018/19, and went on to become Vice President the following year, for the term 2019/20.
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1. Introduction
G
ood corporate governance is a fundamental pillar of company law. There are several mechanisms in place to ensure that those entrusted with the administration of the company and the members of such company act with the utmost due diligence and respect to the statutory obligations in place. Directors and members alike must act in good faith and exercise those actions that are considered to be in the best interest of the company. This article will give a brief explanation on the notion of the corporate veil and how it is employed in instances where the law, or the courts, require that the separate identity of the company and its members is to be ignored, effectively putting aside the principles established in Salomon vs Salomon.1 This will be the foundation for the discussion relating to the duties of the directors in relation to the management of the company, as well as in protecting the interests of the company. Moreover, a director’s position renders him liable to be subject to creditors and shareholders alike and, therefore, is held at a higher esteem in terms of responsibility than any other member of the company. Indeed, a director’s liability comprises effective and thorough due diligence, attention and care in respect to any activities pertaining to the assets and dealings of the company. Moreover, if the circumstances so warrant, the lifting of the corporate veil may also apply in instances where shareholders act in bad faith. However, such instances are foreign to the current statutory mechanisms in place. Instances where shareholders may be held liable for their actions may only find their basis elicited through case law. The courts would adjudicate as the circumstances of the case so dictate.
2. The Corporate Veil: Explained The landmark English judgment of Salomon vs Salomon2 established the principle of separate judicial personality and today, represents a fundamental pillar of company law principles. Notwithstanding, this doctrine has created several problems and has often been the subject of abuse by parties who 1 2
Salomon vs A Salomon & Co Ltd [1896] UKHL 1, [1897] AC 22. Ibid.
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use the corporate form to protect them from any wrongdoings. The law, by way of exception, occasionally ignores the separate identity of the company and its members. This is known as the lifting of the corporate veil. Professor Muscat broadly classifies two exceptions when the corporate veil is lifted and refers to them as statutory exceptions and judicial exceptions.3 Statutory inroads are easily established. It is through legislation, which in some way directly or indirectly affects companies, that a clear picture of instances in which the corporate veil may be lifted is provided. However, the circumstances in which a Maltese court is prepared to lift the corporate veil and depart from general principles are more difficult to identify and categorise.4
2.1. Statutory Inroads The Companies Act5 may be regarded as the main body of legislation which specifically caters for those instances in which the ‘veil’ may be lifted. Such laws, however, do not aim to neutralise the separate personality of the company, but instead seek to penalise any wrongdoings on behalf of the company’s ‘constituents’. The provisions, in fact, mainly relate to the management of the company and not to its shareholders. Statutory inroads, therefore, may be viewed as providing an exception to the rule that a mandatary should not be held responsible for the acts of the principal.
2.1.1. Number of shareholders falls below two A company is not validly established unless the Memorandum of Association is entered into and subscribed to by at least two persons. Nonetheless, an exception exists in the case of single member companies, where a single member would satisfy the specific requirements. If the number of members falls below two for a period longer than six months, 3 Andrew Muscat, ‘Principles of Maltese Company Law’, Malta University Press (ed. 2 Vol II) (2019) 333,334. 4 Ibid. 5 The Companies Act (Chapter 386 of the Laws of Malta).
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the company may be subject to being dissolved or wound up by the court.6 If within those six months, the remaining member continues to carry out business activities, that member may be held unlimitedly and jointly and severally liable with the company for those obligations contracted within that six-month period, until the date the company is dissolved or until the situation is rectified. Liability arises only if it can be proven that the remaining member was aware that he was the sole member of the company. In such an instance, the ‘veil’ is to be lifted and the sole member is to be held liable.7 Despite this, however, the separate legal personality of the company would successfully remain intact. It is not the company being put into liquidation which gives rise to an exception to separate legal personality, but if the number of members is reduced to below two for six months and the sole remaining member continues to trade, knowing that the company lacks the statutory requirement for members. This requirement of knowledge was added by virtue of Act IV of 2003. Prior to this, a member was to be held liable even without knowledge of the company’s membership deficit. Moreover, it is to be noted that the liability of the sole member does not substitute that of the company. Rather, the sole member becomes jointly and severally liable together with the company as a legal entity in its own right.
2.1.2. Fraudulent trading If any business of the company has been carried out with the intention of defrauding creditors, or for any fraudulent purpose, the court may hold any person who was knowingly party to that fraud responsible, without any limitation for the liability of debts of the company.8 A wrongdoer may be held liable not only for contractual obligations undertaken by the company, but also for any form of obligation, including liability in tort and statutory claims against the company, whether it was liquidated or not. Such liability is not restricted to debts and liabilities of the company incurred before or after the fraud. However, liability is not 6 7 8
Ibid, Article 214(2)(b)(i). Ibid, Article 214(4). Ibid, Article 315.
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automatic but upon application. Despite this, liability may be invoked against any person, including directors, managers and shareholders. This provision was considered to be quite difficult to use in practice because it can only be invoked in the process of a winding up, and the onus of proving fraud is quite high. Essentially, this remedy does not really involve an exception to the principle of the separate legal personality of the company. The company continues to be regarded as a separate juridical person and to be liable for its obligations independently of the liability attached to the wrongdoer. Nevertheless, the wrongdoer is considered to be personally responsible for his actions. Prior to the introduction of the Companies Act, there nevertheless existed a remedy. This is the criminal sanction; a person knowingly participating in a fraud, whether as a principal or as an accomplice, would be committing a criminal offence under the Criminal Code. At first glance, therefore, the provision in the Companies Act may not have been required, but in reality, the civil sanction is far wider.
2.1.3. Wrongful trading9 An action for wrongful trading may only take place when the company enters into insolvent liquidation. The action is exclusively brought forward by the liquidator against the directors, and thus, the action is narrower in scope than the action for fraudulent trading. The creditors may, nevertheless, instigate the liquidator to bring forward this action. The court may declare the director liable to contribute towards the company’s assets, as long as it is proven that the directors knew, or ought to have known, that there was no reasonable prospect for an insolvent liquidation to be avoided. Evidently, this approach sheds light on the nature of directors’ fiduciary duties not only towards shareholders but also towards creditors as stakeholders, in view of the limited liability of the company. Directors will only be liable unless they show that they took every reasonable step to protect the interests of the creditors. If they do not show that they took such steps, then it is in this instance that the court would issue an order condemning the directors to make a contribution to the assets of the company. 9
Ibid, Article 316.
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Liability for wrongful trading may be incurred even if the company ceases trading as soon as it is realised that insolvent liquidation is inevitable. Examples of conduct capable of attracting liability include: failure to preserve the assets of the company; concluding transactions at an undervalue; payment of excessive remuneration, and so forth. The law also provides for both a subjective and an objective test when deciding the director’s liability: his personal skill and knowledge and the knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions.10 Any director, moreover, acting in good faith is afforded some protection. The court will not grant an application for wrongful trading against such a director, or directors, if it is satisfied that the person concerned took every step he ought to have taken with a view to minimise potential losses to the creditors. As can be seen, Article 316 of the Act is a powerful tool in the creditor’s arsenal. One need not prove fraud or dishonesty, as the onus of proof falls upon the director to prove that he has taken every step to minimise any potential losses. The Price Club11 case is a brilliant example of the provision in action, wherein the Court held the directors responsible for trading when the company in question was practically insolvent, seriously prejudicing the interest of creditors.
2.1.4. Group of companies The Companies Act is not the only body of legislation providing for statutory inroads. The Income Tax Act12 also aids in this endeavour. Both Acts allow the separate judicial personality of companies to be set aside for the purpose of viewing a group of companies as one single entity, for financial or fiscal reasons. Where a company holds a subsidiary relationship, that is, it is the parent company and holds a relationship with other subset companies, that company is regarded as a single entity and must also submit group accounts. 10 Ibid, Article 316(4)(a)-(b). 11 Dr. Andrew Borg Cardona v. Victor Zammit, Christopher Gauci u Wallace Fino, Civil Court, First Hall (2007). 12 The Income Tax Act, Chapter 123 of the Laws of Malta.
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Apart from the obligation of each company to prepare audited financial statements personally, the parent company must also prepare its accounts. These consolidated accounts will provide a true and fair view of the assets, liabilities and financial position of the group of undertakings as a whole. Similarly, Article 16 of the Income Tax Act makes an exception to separate personality because in certain limited circumstances, the Act allows the surrender of group relief. The losses made by individual companies within a group, which normally will not go beyond that company, can under limited conditions be utilised by other companies within the group.
2.1.5. Miscellaneous Statutory Inroads Other statutory inroads, as per the Companies Act, include instances such as: (i) premature trading – where transactions are entered into before the company has come into existence, all persons carrying out business in the name of the company, shall be jointly and severally liable for the dealings; (ii) misstatements in prospectus13 - the Act also imposes joint and several liabilities on those persons who are responsible for, or who have authorised, the issue of a prospectus for any damage sustained by a person subscribing to those shares on the basis of the prospectus, when it contains untrue statements; (iii) unlawful distributions14; (iv) liability of past directors and shareholders in relation to the redemption or purchase by the company of its shares15; and (v) restriction on the reuse of company names.16 13 14 15 16
Companies Act, Article 94. Ibid, Article 204. Ibid, Article 217. Ibid, Article 317.
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2.2. Judicial Inroads The court has, upon occasion, been asked to disregard the separate personality of a particular company in circumstances where the law itself does not provide for such a course of action. There are several court judgments, both in Malta and the UK, that can illustrate the judicial inroads. In the UK, efforts to lift the corporate veil have been constrained by the Salomon17 case, which had destroyed the possibility of regarding the oneman company as a mere alias of, or agent for, the principal shareholder. Nevertheless, the Maltese courts have been receptive to the argument that disregarding a company’s separate judicial personality is necessary to achieve principles of justice. Basing itself on largely UK doctrine, the Maltese Courts have developed a well-structured doctrine for the allowance of judicial inroads.
2.2.1. Fraud The concept of fraud, in this context, is wider than that given to it in a Criminal law context. It encompasses fraud and improper conduct, which goes beyond a deliberate attempt to deceive. The court has often been faced with situations in which it decided to lift the corporate veil to issue judgements in line with good faith principles. Most of these cases have involved an attempt at evading contractual obligations by hiding behind a corporate personality. The court confirmed its willingness to lift the corporate veil in situations of bad faith in the landmark judgement of Herrera vs Tabone18. The Court stated that the principle of separate legal personality is not a universally applicable principle, and that the Court has the ability to look beyond what is at the surface in order to achieve justice. Essentially, the courts have held that the principle of good faith overrides that of separate legal personality. 17 18
Salomon vs A Salomon & Co Ltd [1896] UKHL 1, [1897] AC 22. Dr Jose Herrera et vs Tancred Tabone et noe, Court of Appeal (1992).
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Moreover, in Supermarkets Limited vs Le Cram Developments Co. Ltd19, the defendants attempted to argue that a judgement issued against them in their personal capacity was to have no effect on the company they formed part of. The Court remarked that when determining whether a company was in good faith, one must look at the conduct of the representatives of that company. Therefore, where bad faith exists and the circumstances so warrant, the court may lift the corporate veil, ascribing responsibility to persons beyond the company itself. Bad faith, however, can never be presumed and must be proven by the party alleging it.
2.2.2. The Single Economic Unit The ‘single economic entity’ principle has often been viewed as an exception to the Salomon principle. The UK Courts, in the 1970s and 1980s, put forward a justification for the disregarding of the separate judicial personality of related companies based on the ‘the requirements of justice’, and went on to regard related companies as single economic entities. This notion is inherently vague and provides neither the courts nor professional advisers with any clear guidance. It was first accepted by Lord Denning in the case of DHN Food Distributors Limited vs Tower Hamlet London Borough Council20, where a holding company conducted business on land owned by one of its wholly-owned subsidiaries. When the Council compulsorily acquired the land, the holding company entered a claim for compensation in respect of the disturbance caused to it. The claim was upheld, with Lord Denning holding that the Court could look to the economic entity of the whole group and treat the business as being carried on by that group: [t]his group is virtually the same as a partnership in which all the three companies are partners. They should not be treated separately so as to be defeated on a technical point. They should not be deprived of the compensation which should justly be payable for disturbance. The three companies should, for present purposes, be treated as one.21 19 Supermarkets Limited vs Le Cram Developments Co. Ltd Court of Appeal (2002). 20 DHN Food Distributors Limited vs Tower Hamlet London Borough Council [1976] 3 ALL ER 462. 21 Ibid
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However, in the Adams vs Cape Industries Plc22 case decided in 1990, the UK Courts went on to reject the notion. Here, the defendant was part of a group of companies and attempted to take advantage of its corporate structure to avoid the risk that any member of the group would be subject to United States law and, thus, liable for any injury caused by asbestos. The Court of Appeal rejected the argument that the plaintiff company should be regarded as comprising part of a single economic entity. In this case, the Court opined that ‘it would be technical for [it] to distinguish between the parent and subsidiary company... economically [the plaintiff] said, they were one. But [the Court is] concerned not with economics, but with law. The distinction between the two is, in law, fundamental and cannot here be bridged.’23 Economic integration of companies, according to some commentators, should result in ‘enterprise liability’, meaning that the separate personality of each making up the company is to be ignored and the enterprise should be held responsible as a whole. However, this was not the position adopted by the Maltese Courts in Pisani vs Borg Bartolo.24 The Court held that although the term ‘group of companies’ denotes the existence of a number of affiliated companies, this does not mean that this ‘group’ is to have a separate existence. A group of companies cannot be seen as a separate juridical person as it is merely a descriptive term.
3. Definition of a Director A director is generally someone who manages the company. Shareholders, on the other hand, are individuals that have an equity stake in the company. From a Maltese perspective, the Companies Act does not define who a director is, however, a description of what a director is may be found under Article 2: “director” includes any person occupying the position of director of a company by whatever name he may be called carrying out substantially the same functions in relation to the direction of the company as those carried out by a director. 22 Adams vs Cape Industries Plc [1990] Ch 433. 23 Ibid. 24 Pisani vs Borg Bartolo, Civil Court, First Hall (1989).
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Thus, a person is held to be a director where he has been formally appointed to the board as a first director or as a subsequent director, in accordance with Articles 69(1)(g) and 139 of the Companies Act, whether appointed as an executive or a non-executive director (a ‘de jure’ director), and also where, although not formally appointed as aforesaid, he carries out substantially the same functions in relation to the direction of the company as those carried out by a director (a ‘de facto’ director). The definition would also appear to encapsulate any person appointed as an alternate director, where the Articles of Association of the company expressly allow for such an appointment.25 Under Maltese law, it is a long-standing principle that directors have a fiduciary relationship towards a company and are required to act in good faith as a bonus paterfamilias.26 A director’s duties are generally embodied in sources such as the memorandum or articles of association of a company, the Companies Act, as well as several bodies legislation imposing specific duties on directors. The instances wherein personal liability may attach to a director derive from the duties attributed to directors by law, which are primarily two: 1. The general duties of a director arising from a director’s juridical position under general principles of Maltese law; and 2. The administrative duties of a director arising under specific provisions of Maltese laws.
3.1. Duties of Directors In the performance of their directorship, directors are under a duty to exercise care, diligence and skill. This duty is laid down in the context of the broader requirement that directors of a company are to promote the well-being of the company and are responsible for its general governance, for its proper administration and management, as well as for the general supervision of its affairs. 25 Daniela Gauci, ‘Duties and Liabilities of Directors of Companies In Distress’, University of Malta (2015) 36. 26 Andrew Muscat, ‘Principles of Maltese Company Law’, Malta University Press (ed. 2 Vol II) (2019).
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3.1.1. General Duties Article 136A of the Companies Act encapsulates the general duties which directors owe to the company. For ease of reference, such article is replicated below: 136A. (1) A director of a company shall be bound to act honestly and in good faith in the best interests of the company. (2) The directors of a company shall promote the well-being of the company and shall be responsible for: (a) the general governance of the company and its proper administration and management; and (b) the general supervision of its affairs. (3) In particular, but without prejudice to any other duty assigned to the directors of a company, or to any one of them, by the memorandum or articles of association or by this Act or any other law, the directors of a company shall: (a) be obliged to exercise the degree of care, diligence and skill which would be exercised by a reasonably diligent person having both (i) the knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by or entrusted to that director in relation to the company; and (ii) the knowledge, skill and experience that the director has; (b) not make secret or personal profits from their position without the consent of the company, nor make personal gain from confidential company information; (c) ensure that their personal interests do not conflict with the 126
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interests of the company; (d) not use any property, information or opportunity of the company for their own or anyone else’s benefit, nor obtain benefit in any other way in connection with the exercise of their powers, except with the consent of the company in general meeting or except as permitted by the company’s memorandum or articles of association; (e) exercise the powers they have for the purposes for which the powers were conferred and shall not misuse such powers.27 Four main principles may be extracted from Article 136A. These principles, according to Professor Andrew Muscat, comprise the ‘duty of loyalty’28 of directors. Firstly, directors must act in the best interests of the company, and secondly, directors must act honestly and in good faith. English authors Gower and Davies believe that the grounds for ‘good faith’ should be tested on common sense principles, and the respective court must ask itself whether it is proved that the directors have done what they honestly believed to be right.29 In essence, this aims to preclude the courts from doubting the board of directors’ decisions as to where the best commercial interests of the company lie. Such a notion was discussed in the English case of Charterbridge vs Lloyds Bank30, where the Courts held that the test is ‘whether an intelligent and honest man in the position of a director of the company could, in the whole of existing circumstances, have reasonably believed that the transactions were for the benefit of the company’. Directors are required to act bona fide in what they consider, and not what a court may consider, is in the interests of the company due to their faith and reasonable skill31. This principle was reiterated in Re Smith vs Fawcett.32 Nevertheless, directors may breach such a duty, even if there is no conscious dishonesty on their end, if they fail to consider whether a proposed action is 27 Companies Act, Article 136A. 28 Andrew Muscat, ‘Principles of Maltese Company Law’, Malta University Press (ed. 2 Vol II) 568, 570. 29 Gower and Davies: Sweet; 9th Revised Edition (2012). 30 Charterbridge vs Lloyds Bank [1970] 1 Ch 62. 31 Andrew Muscat, ‘Principles of Maltese Company Law’, Malta University Press (ed. 2 Vol II) (2019) 587. 32 Re Smith vs Fawcett Ltd [1942] Ch 304 [1942] 1 All ER 542.
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indeed in the best interests of the company, as noted in Re W & M Roith Ltd.33 Farrar and Hannigan opine that what should be taken into consideration is the directors’ subjective opinion as to the interests of the members as a general body, balancing the short-term interests of the present members against those long-term interests of future members.34 Thirdly, the directors must use their powers for the purpose for which these powers have been conferred and not for an improper purpose. The main sources of the powers of directors are the Companies Act and the company’s memorandum and articles of association. Indeed, Article 137(3) of the Companies Act states that the business of a company ‘shall be managed by the directors who may exercise all such powers of the company… as are not by this Act or by the memorandum or articles of the company, required to be exercised by the company in general meeting’.35 The memorandum and the articles, in practice, generally set very few parameters within which the powers of directors are to be exercised and, in turn, the powers of directors are thus usually limited only by the provisions of the Companies Act.36 Directors must act intra vires and cannot do anything which is illegal, ie: ultra vires to the company’s objects. They must not, without the authorisation garnered through a general meeting, do any act or enter into any transaction which is beyond the powers conferred on directors by the articles. Directors are under the obligation to follow what is embodied within the Companies Act, as well as the memorandum and articles. If the directors engage in any such activity, they may be liable in damages on a joint and several basis for a breach of duty37, aside from the consequences specified in the Act. Fourthly, a director must not have a conflict of duty or of interest. A director who may be interested in a contract or proposed contract that the company may enter into, is under the obligation to declare the nature of his interest to the other directors.38 If he fails to do so, such a director would be liable to a penalty as specified by the Act. The director must flag out a conflict of interest immediately, even if such an interest or conflict may be premature, as 33 Re W & M Roith Ltd [1967] 1 W.L.R. 432. 34 Farrar’s Company Law: Fourth (4th) Edition, Butterworths Law; 4th Revised Edition (1 July 1998). 35 Companies Act, Article 137 (3) 36 Andrew Muscat, ‘Principles of Maltese Company Law’, Malta University Press (ed. 2 Vol II) (2019) 592. 37 Companies Act, Article 147. 38 Companies Act, Article 145.
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otherwise he would be in breach of his duties. Moreover, a director may not, without the shareholders’ consent, carry on business on his own account or on account of others, if such a business is in competition with the company.39 Although the general duties of directors are broad in their scope of application, the consensus is the same: the duties of directors in their dayto-day management of the company or any other actions relating to the company hinge on the notion of ‘good faith’. Indeed, this may be seen in cases such as Grech vs Chetcuti40, wherein a resolution taken by a board of directors was deemed to be null and void, as the directors were acting out of personal interest.
3.1.1.1. Duty of Care, Diligence and Skill The Companies Act requires directors to exercise the degree of care, diligence and skill which would be exercised by a reasonably diligent person, reaching both an objective and subjective standard respectively. These standards are: a) the knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by, or entrusted to, that director in relation to the company (the objective standard); and b) the knowledge, skill and experience that the director has (the subjective standard).41 Therefore, a director is required to meet the higher of the two standards and thus, a director must meet the objective standard. The subjective standard operates in a way which increases the level of care, diligence and skill expected from a particular director depending on that director’s specific personal knowledge, skill and experience.
39 Ibid, Article 143. 40 Mary Grech et. vs Joseph Chetcuti pro et noe. in rappresentanza tas-socjeta’ J.B.Limited, First Hall Civil Court (5 October 2004). 41 Companies Act, Article 136A (3)(a)(i)-(ii).
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3.1.2. Specific Duties Additionally, various pieces of legislation also impose specific duties on directors. From a high-level perspective, these may be classified into six categories: 1. The duties relating to the keeping of statutory registers, including the list of members and directors, and minute books, these being the meeting minutes; 2. The duties relating to the filing of returns and documents. On an annual basis, a company must file an annual return with the Company Registry and a tax return, and on a quarterly basis, a VAT return; 3. The duties relating to board and general meetings. The directors of the company meet and make decisions by means of board meetings; 4. The duties relating to record keeping and financial statements, that is, the keeping of trade books; 5. The duties relating to the liquidation of the company. If the company has its asset base depleted to a particular degree, it is the duty of the directors to inform the shareholders to liquidate the company; 6. The miscellaneous duties. In particular, if the company is listed on the Malta Stock Exchange, the special duties became more onerous. A director, thus, must comply with its rules and the principles of good corporate governance, including the Insider Dealing and Marketing Abuse Offences Act.
3.3. Liability of Directors In English law, the directors are considered to be the trustees or agents 130
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of the company. At common law, directors are fiduciaries and as such, are subject to a number of fiduciary duties.42 Essentially, as held in Great Eastern Railway Co vs Turner43 and Kuwait Asia Bank EC vs National Mutual Life Nominees Limited44 respectively, they are considered to be trustees of the company’s property and monies, and agents in the transactions they enter into on behalf of the company. Meanwhile, under Maltese law, directors have generally been regarded as mandataries and agents. Professor Cremona observes that in their internal dealings with the company, directors should be classified as mandataries of the company and that in their dealings with third parties they should be considered as agents thereof.45 In Musu’ vs Vella46, the Maltese Commercial Court, as early as 1890, recognised that ‘amministratori ed i membri di un comitato di direzione’ of a società anonima were to be regarded as mandatories, and that if they acted outside the parameters of their mandate, they were to be held personally liable in damages. Moreover, in Dr Ian Refalo noe et vs Albert David Boweck et47, the Civil Court stated that ‘...id-diretturi għandhom jitqiesu bħala aġenti jew mandatarji tal-kumpanija li tgawdi personalità ġuridika u indipendenti mill-membri li jikkomponuha.’ In this case, however, it should be noted that the Court held the terms ‘agent’ and ‘mandatory’ to be one and the same. However, later judgments affirmed that agency is a species of mandate, as per Article 49 of the Commercial Code.48 Nonetheless, the existence of an agency, like that of a mandate, gives rise to legal consequences both between the agent and his principal, as well as between the principal and the third party. It is suggested that the juridical nature of agency and that of mandate are so closely linked that it is unnecessary to distinguish between the character of a director as a mandatary in his internal dealings with the company and that of an agent in his dealings with third parties.49 42 Farrar and Hannigan (supra n.3) 378. 43 Great Eastern Railway Co vs Turner [1872] 8 Ch. App. 149. 44 Kuwait Asia Bank EC vs National Mutual Life Nominees Limited [1990] BCLC 868. 45 Professor F Cremona, ‘Notes on Commercial Partnerships’, 113. 46 Francesco Saveria Musu’ vs Vincenzo di Saverio Vella et, Vol. XII. 527 (1890). 47 Dr Ian Refalo noe et vs Albert David Boweck et First Hall, Civil Court (18 March 1983). 48 The Commercial Code (Chapter 13 of the Laws of Malta). 49 Andrew Muscat, ‘Principles of Maltese Company Law’, Malta University Press (ed. 2 Vol II) (2019) 566.
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Moreover, through Act XIII of 2004, Articles 1124A and 1124B were included within the provisions of the Civil Code to introduce the prospect of fiduciary obligations. In turn, such provisions have rendered directors to be regarded as fiduciaries of a company. Fiduciary obligations arise in virtue of law, contract or quasi-contract, unilateral declarations including wills, and trusts, assumption of office or behaviour whenever a person, dubbed ‘the fiduciary’: (a) owes a duty to protect the interests of another person. In turn, it shall be presumed that such an obligation where a fiduciary acts in or occupies a position of trust is in favour of another person; or (b) has registered in his name, holds, exercises control or powers of disposition over property for the benefit of other persons, including when he is vested with ownership of such property for such purpose; or (c) receives information from another person subject to a duty of confidentiality and such person is aware or ought, in the circumstances, reasonably to have been aware, that the use of such information is intended to be restricted.50 A principle duty of the director is to protect the interests of the company. A director often holds or exercises control or powers of disposition over property of the company and, in such a case, he would qualify as a fiduciary also under the second limb of the definition, and is in receipt of information from the company subject to a duty of confidentiality, which would qualify him as a fiduciary also under the third limb of the definition. Moreover, a director may incur personal liability if, though not initially bound by a contract entered into on behalf of a company, he/she goes on to assume liability for the company’s contractual obligations. Such an instance may be seen in Anchor Bay Leisures Limited vs Edgar Urpani et51, where the defendant, Urpani, entered into contract on behalf of the defendant company with the plaintiff. At a later stage, when the defendant company failed to pay its dues to the plaintiff, Urpani issued a cheque under his own name which was ‘referred to drawer’. By issuing the cheque, Urpani assumed the liability for the obligations of the defendant company. Therefore, Urpani 50 51 2011).
The Civil Code (Chapter 16 of the Laws of Malta), Article 1124A. Anchor Bay Leisures Limited vs Edgar Urpani et, First Hall, Civil Court (29 September
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and the defendant company, were held in solidum and, were both to pay the relative amount to the plaintiff.
3.3.1. The Creditors & Insolvency Maltese company law recognises that directors owe a duty to take into account the interests of the creditors of the company, in an instance where the company under their management and control is in financial distress. This may be seen from Article 316 of the Companies Act, whereby in cases of wrongful trading, the directors are under the obligation to ensure that every step is taken to minimise the potential loss to the company’s creditors, especially where the company has no reasonable prospect of avoiding dissolution due to its financial state or is subject to an impending reality of being unable to pay its debts.52 It is unlikely that general principles of law could be relied upon, in the absence of fraud or breach of the criminal law, to impose duties on directors towards creditors. Given that directors act on behalf of the company, their actions vis-à-vis third parties are generally regarded to be one of the same with the action of the company itself. Professor Muscat opines that it would be an odd occurrence of the courts were to equate the interests of the creditors with the interests of the company.53 Nonetheless, Maltese judgments have recently started to occasionally refer to a duty of directors to take into account the interests of the creditors when the financial position of the company is in a parlous state. For example, in the case of Dr Andrew Borg Cardona vs Price Club Holdings Limited et54, the Civil Court remarked that the financial situation of a company may require the interests of creditors to be taken into consideration. Even if, legally speaking, a director is only an agent of a company and his duties are towards the company he represents, the obligation of the director to consider creditors’ interests is of utmost importance. The Civil Court made an impressive revelation in Maltacom plc vs Mark 52 53 54
Companies Act, Article 316. Andrew Muscat, ‘Principles of Maltese Company Law’, Malta University Press 580. Writ number 25/2003, First Hall, Civil Court (12 October 2007).
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Gaffarena et55, where the Court held the company directors personally liable for their failure by their insolvent company to pay its bills to the plaintiff company. Moreover, in All Invest Company Limited vs X et56, the Court recognised a duty owed to the creditors of the company by the directors, when the company was approaching insolvency. Quoting the English Case of Gwyer & Associates Ltd vs London Wharf (Limehouse) Ltd57, the Court held that directors have a fiduciary responsibility vis-à-vis creditors when the company is close to bankruptcy. After taking all of the above into consideration, could directors, furthermore, be held personally liable to creditors on the basis of the rules on tort? Can directors who have failed, in the management of the company, to exercise prudence, due diligence and attention of a bonus paterfamilias or who have breached a duty imposed by law, be held liable under the principles of the Civil law of tort for damages which creditors have suffered as a result of failing to recover what is due to them from the company because of insolvency? As aforementioned, as directors act on behalf of the company, it is unlikely the court would hold directors personally liable towards creditors in these circumstances. However, this position would be different if the directors’ conduct were to amount to fraud or involve a breach of Criminal law. In such instances, the courts would be entitled to impose a direct liability on directors vis-à-vis affected creditors of the company. The question of the liability in tort is also related to the broader question of the potential liability of a company in tort. The prevailing view is that a company may be held liable in tort, as discussed in Albert Mizzi noe. vs Rev Prof George Schembri.58 However, if a company is to be held liable in tort, it alone should be held liable. On the other hand, if a court were to regard a company as being incapable of committing a tort, then liability should be imposed on the directors themselves.59 Despite all of the above, it is to be noted that the Companies Act’s 55 Maltacom plc vs Mark Gaffarena et, Court of Appeal, Inferior Jurisdiction (28 November 2008). 56 All Invest Company Limited vs X et , First Hall, Civil Court (17 March 2014). 57 Gwyer & Associates Ltd vs London Wharf (Limehouse) Ltd [2003] 2 BCLC 153. 58 Albert Mizzi noe. vs Rev Prof George Schembri, Vol. LXXVI. ii. 210. 59 Andrew Muscat, ‘Principles of Maltese Company Law’, Malta University Press 583.
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provisions on fraudulent preferences60, fraudulent trading61, wrongful trading62 and the remedy against delinquent directors63 should afford to creditors of the company ample protection against misconduct or serious mismanagement by the directors, without the need for the courts to develop duties and remedies based on general principles.
3.3.1.1. Tort & Fiduciary Obligations Cautious directors may refrain from taking business risks for fear of contracting personal liability under the wrongful trading provisions. Keay64, vis-à-vis the importance of directors being able to take business risks as well as the protection of creditors, opines that it is important to strike an appropriate balance between the two extremes of taking into account creditors’ interests only after a company is insolvent, and that of considering the creditor’s interests at the first sign of financial distress. In this regard, the former part of Keay’s consideration would give creditor’s very little possibility of protection. The latter part, meanwhile, may possibly interfere with the directors’ decision-making, as they may become overly cautious in their business strategies.65 The Act provides several mechanisms through which the company, as well as the body of creditors, may sue the directors for a breach of duty. However, the Act offers no remedy to the individual creditor who suffers a loss as a result of a director’s conduct in the management of the company’s affairs. In this regard, would a creditor be successful in bringing an action based in tort against the directors of his debtor company’s for their failure to use prudence, diligence and the attention of a bonus paterfamilias in the management of the company’s affairs, inevitably holding them personally liable for payment of a debt of the company or damages? Maltese judgements seem to be divided on this matter. In cases such 60 Companies Act, Article 122. 61 Ibid, Article 315. 62 Ibid, Article 316. 63 Ibid, Article 312. 64 Andrew Keay, ‘The director’s duty to take into account the interests of company creditors: When is it triggered?’ (2001) 25 MULR 315, 319. 65 Companies Act, Article 315.
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as Briffa vs Abela66, the Court upheld a demand for a director to be held personally liable in solidum with the company under his management for a debt owed by it on the basis that he had committed fraud. Indeed, ‘ma [kienx] hemmx dubju li f’ċerti determinati sitwazzjonijiet d-direttur ikun personalment responsabbli għall-ħsara bl-aġir delittwuż minnu stess kommess’. The Court, citing Palmer67, supported the concept of personal liability on behalf of directors who were party to fraud or the commission of any other tort towards the injured party. Previous judgments such as Bugeja vs Vella Gatt68 reveal that the Maltese Courts are partial to holding a director personally liable for debts of the company under his management by reason of fraud committed by him. Moreover, the case of Galea vs Hili69 established that liability in tort also arises where the director, although not personally committing the tort or ‘l-aġir dilettwuż’ - allows another to commit it. However, cases such as Theuma vs Cachia70 and Hi-Timber Company Limited vs Baldacchino71 reject the notions established in the abovementioned cases. In both instances, the demand for a declaration of the joint and several liability of the defendant directors, with the defendant company for the debts of the latter, were based on claims of personal liability due to the fact that the directors had continued to trade, knowing that the company was in a bad financial situation. The Court, instead of framing the action in tort, framed the action under Article 316 of the Companies Act,72 and went on to reject the claim on the basis that an action for wrongful trading could only be made after the company has gone into insolvent liquidation. 66 Anthony Briffa pro et noe vs Vincent Oliver Abla pro et noe, First Hall, Civil Court (28 March 2003). 67 Palmer’s Company Law, 21st Edn (1968) 572. 68 John Bugeja vs Giuseppe Maria Vella Gatt pro et noe, Court of Appeal (Commercial) (31 January 1977). 69 Victor Galea vs Marin J. Hili noe, Commercial Court (1 October 1996). 70 Brian Theuma vs Chris Cachia pro et noe, First Hall, Civil Court (14 October 2004). 71 Hi-Timber Company Limited vs Joseph Baldacchino et, First Hall, Civil Court (15 December 2005). 72 (1) The provisions of this article shall apply where a company has been dissolved and is insolvent and it appears that a person who was a director of the company knew, or ought to have known prior to the dissolution of the company that there was no reasonable prospect that the company would avoid being dissolved due to its insolvency. (2) The court, on the application of the liquidator of a company to which this article applies, may declare the person who was a director referred to in sub-article (1) liable to make a payment towards the company’s assets as the court thinks fit. (3) The court shall not grant an application under this article if it is satisfied that the person who was a director knew that there was no reasonable prospect that the company would avoid being dissolved due to its insolvency and accordingly took every step he ought to have taken with a view to minimising the potential loss to the company’s creditors.
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Furthermore, it is also dubious as to whether the creditors of the company would be successful in a claim against the directors for a breach of fiduciary obligations towards them. Directors do not owe any fiduciary duties to creditors. Although the Court, in All Invest Company vs X73, in quoting the Gwyer74 case, opined that ‘id-diretturi għandhom dmirijiet fiduċjarji fil-konfront tal-kredituri meta l-kumpanija tkun waslet fl-għatba tal-insolvenza’, the reference to fiduciary obligations should be interpreted as a reference to the general duty of directors to act in the best interests of the company - a duty which, in itself, is of a fiduciary nature and which comprises the duty to take into account the interests of the company’s creditors when that company is in financial turmoil.
4. Definition of a Shareholder Companies are formed as a result of subscribers who decide to form the company. The persons who are contributing are known as the subscribers to the memorandum, and generally speaking, they are then the shareholders. The term ‘shareholders’ covers all the persons who, at a moment in time, have at least one share in the company. A Maltese company has a separate legal personality and existence from that of its members and officers. A company can therefore sue, or be sued, in its own name and may hold separate rights and obligations. The liability of a shareholder, as a general principle, is limited to any amount which is unpaid over the shares to which the shareholder is subscribed. Both shareholders and creditors supply capital to a corporation. Creditors have fixed claims towards a company and are, consequently, entitled to receive the repayment of their principle, with interest, at a specified time. On the other hand, shareholders have the right to participate in firm profits through dividends as they may be declared by the directors and, to share in residual assets, that is, those assets which remain after creditor payment, upon dissolution. The probability of conflict between shareholders and creditors augments in cases of unsuccessful firms.75 73 All Invest Company Limited vs X et , First Hall, Civil Court (17 March 2014). 74 Gwyer & Associates Ltd vs London Wharf (Limehouse) Ltd [2003] 2 BCLC 153. 75 J. William Callison, ‘Why a Fiduciary Duty Shift to Creditors of Insolvent Business Entities is Incorrect as a Matter of Theory and Practice’, Journal of Business & Technology Law, Vol. 1, University of Carey (2007) 431, 432.
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4.1. Shareholder liability Shareholders may be held personally liable for certain acts or omissions. This instance is oftentimes referred to as the ‘piercing’ or ‘lifting of the corporate veil’. Circling back to what was mentioned in Section 1 of this article, the corporate veil is essentially a mechanism, which protects the company and gives it its personality. The company is regarded, at law, as a separate person from its shareholders. As a general rule, the veil of the corporation or the principle of separate juridical personality is generally opaque and impassable. The instances wherein shareholders have been found personally liable through judicial practice is not a concept which arises from Maltese statutory law. It is through jurisprudence that the personal liability of shareholders for fraud and improper conduct is recognised. The notion of ‘improper conduct’ goes beyond an attempt to create a level of deceit and includes notions such as concealment and evasion. In Herrera vs Tabone76, for instance, the Courts lifted the corporate veil for a situation in which the shareholders hid behind the separate legal personality of the company to avoid fulfilling contractual obligations. Moreover, in Supermarkets Limited vs Le Cram Developments Co. Ltd77, it was established that where shareholders act in bad faith and if the circumstances so warrant, the courts have the power to lift the corporate veil and attribute personal liability to shareholders.
5. Conclusion The Companies Act, alongside complementing legislation, is a powerful mechanism in combating situations of fraud, abuse of power and defaulting of contractual obligations with regards to third parties. Meanwhile, it is not solely the Act which may deem that directors acted ultra vires or in male fede. Tort law principles may also apply to specific situations. The rights of third parties, through the relevant laws and case law, is therefore ensured through 76 77
Dr Jose Herrera et vs Tancred Tabone et noe, Court of Appeal (1992). Supermarkets Limited vs Le Cram Developments Co. Ltd Court of Appeal (2002).
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such legislative devices. Established notions of jurisprudence, moreover, not only strengthen the framework for assuring that good corporate governance is maintained but go on to safeguard the notion of equality before the law. Shareholders and directors alike may share liability, and therefore, the possibility of hiding behind the protections afforded by the law are minimal. Indeed, while the law gives certain rights and remedies to shareholders and directors in relation to their positions, the Act ascertains that such rights and remedies are not made use of in an abusive manner, especially if such actions are subject to jeopardising the rights of third parties with invested interests in such company.
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141
Giovanni Bonello The Twenty-First Day of February, 2019 - Black Thursday for the Constitutional Court
Giovanni Bonello was a judge at the European Court of Human Rights for twelve years, up to 2010. Before that, he had been a lawyer in private practice, specialising in constitutional and human rights litigation, defending 170 human rights lawsuits before local and international courts. He is the author of thirty books on art and history, four of which won the Best Book of the Year award. Five full-feature books and a special edition of a law journal have been published about his achievements, which have also been the subject of university dissertations. He has recently published in book-form a critique of the workings of the Constitutional Court of Malta: ‘Misunderstanding the Constitution’, acclaimed as “the most important book of the decade” He was President of the Malta Historical Society, and is general editor of Fondazzjoni Patrimonju Malti publications, consultant to the Palace Regeneration project and Chairman of the University Ethics and Disciplinary Board, and of the Drugs Offenders Rehabilitation Board. He is the Chairman of the Bank of Valletta Arts Committee, and of the Strickland Foundation and sat on the Fortunato and Enrico Mizzi Foundation. He was a member of the main board of MEPA and chaired the National Committee for the Reform of the Administration of Justice.
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he Constitutional Court of Malta will celebrate the 21st of February as Black Thursday. This is not due to the fact that on that date five of its judgments were set aside by the European Court of Human Rights in Strasbourg (ECtHR) ,but because the government, the very party which the Maltese courts had advantaged to the maximum, let it be known, that those five Maltese judgments were indefensible. So unjustifiable that the government had no alternative but to concede before the ECtHR that the Constitutional Court had got it wrong in all the five cases. The Attorney-General of Malta offered voluntarily to pay substantial reparations to the victims, left unredressed by the Maltese judiciary. How does a court feel when it is officially and publicly repudiated by BOTH parties to the suit? On that fateful date, an amazingly consistent Constitutional Court was certified to have got it wrong in five out of five separate cases.1 For a court to be disowned by the losing party is unpleasant but expected. For it to be disowned by both the ‘loser’ and the ‘winner’ concurrently is, to say the least, demeaning. I will focus on only one of these five cases, Calleja v Malta, because I find it emblematic of all that is bankrupt in much of our jurisdiction: spineless timidity, incompetence, political interference, grovelling servility, presumptuousness (they seem to find humiliation preferable to humility), and an irresponsible or deliberate misunderstanding of the very basics of human rights law. Thankfully, that applies to only part of the judiciary. The other part struggles on, burdened by integrity, crippled by dignity, against overwhelming odds. Malta has one unlovely European record to be proud of and to cultivate jealousy – that of having the highest pro-capita percentage of its human rights judgments which are examined on the merits, rubbished repeatedly by the Supreme Court of Europe. And so far, it is betraying no eagerness to allow any challenge to that record. No other court in Europe aims to attain the soaring heights of disapproval scaled by our courts – not Turkey’s, not Russia’s. That Malta’s constitutional courts only get some right, often by mistake, is due, perhaps exclusively, to the coalescence of these qualities. 1 ECtHR, Azzopardi Vella v Malta (8423/17); Borg v Malta (75119/16); Cassar Torregiani v Malta (61981/16); Portelli v Malta (28404/17); Calleja v Malta (83275/17).
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prepared to publish any declaration which would satisfy the injured party. He either had no hard evidence of his assertion or could not find any witness brave enough to give evidence against Minister Cassar. As to the charge that the article had offended public morality or decency, he denied that the words used could be deemed in breach of the press law. The Magistrate in charge of the case, who owed his job to Mr Mintoff and Minister Cassar and would look to them for any promotion, proceeded with lightning speed, revolutionary in libel cases. He first ordered the proceedings to be heard behind closed doors, and that nothing about them be published before they were concluded. The first hearing was held on the 23rd of October, and the judgment was read out on the 14th November, not unlikely the libel case to be decided fastest in the annals of our Quaalude-gulping somnolent courts. The judgment lavished unsolicited learning on various issues which neither party had raised: Was the criminal action time-barred? No. Was Minister Cassar Minister Cassar? Yes. Was the accused really the editor of the satirical paper? Yes. The court emphasised the lack of evidence offered by the accused in support of the libellous accusations, and that this was a ‘private matter’ (Is the public exercise of the ministerial prerogative of transferring a public employee from one government job to another government job a ‘private matter’? The Magistrate adamantly vouched for that). The court did not give any weight at all to the early plea of guilt or to the retraction and the offer to publish any statement Minister Cassar would wish to make. The Magistrate went to town on the second charge: He held that the editor had offended public morality and decency. In a gastronomic allegory all about food, the author had dared to use words such as ‘sausage’ and ‘tender thighs’ and ‘lard’. This, the horrified Magistrate twice branded ‘unquestionably pornographic’ and once ‘refined vulgarity and equivocally nauseating’ (‘moqżiża’ [sic], which the Magistrate, in the unrestrainable rush of bootlicking adrenaline, anyway, spelt wrongly). The Court found the accused guilty on both charges and condemned the editor to three months imprisonment and a fine of £50. This was the first and only time since the war, and up until today, that a journalist, guilty of criminal libel, had been condemned to prison. Mr Mintoff promoted the Magistrate to 146
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Judge some time later. Now he owed both his job and his promotion to Mr Mintoff and Mr Cassar, and any hopes of further promotion were pinned on them too. Mr Calleja appealed the sentence. Something extremely worrying happened in the interval. To plead his appeal, Mr Calleja hired an opposition MP lawyer. The appeal court put off the case for judgment to the 28th of March 1974. Two days before the judgment was due to be delivered, on 26th of March, the Prime Minister, Mr Mintoff, openly threatened the appeal judge in Parliament: ‘If I catch anyone being swerved because the accused is defended by a member of the Opposition, I will fire the judge. I will say it again. I will say it’4. Unsurprisingly, the appeal judge confirmed the sentence, (perhaps knocking off a token few days from the duration of the incarceration – but the later judgments of the Constitutional Courts assert that the appeal judge confirmed the Magistrate’s judgment in its entirety).5 What is undisputed is that the journalist spent 75 days in prison. His father died, broken-hearted, on the eve of the judgment of the Court of Criminal Appeal. A man destroyed, the editor ditched his profession and gave up any political aspirations. The paper stopped publication. Talk of the chilling effect on the free press. Nothing much happened for many years. Mr Calleja, now a prison convict according to his police conduct sheet, lived uncomfortably with his past, with the realization that he was the only journalist in Malta ever to suffer imprisonment for a press offence since the war. And for offending a nation’s snowflake morality, for being a pornographer, court-certified – do not forget sausage, that unspeakable abomination, the puritan court ruled, appalled at that tragic precipitation of public morality. Then, the European Court of Human Rights in Strasbourg started sending progressively clearer signals that the punishment of journalists to imprisonment for press offences went directly to the core of the protection of freedom of expression enshrined in Article 10. 4 316-319. 5
Sitting of Parliament of 26 March 1974, Session No. 283, Third Legislature, Debates, pp A copy of this criminal appeal judgment does not seem to be available.
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This was formulated with the utmost precision in the ECtHR judgment of Belpietro c. Italie, decided unanimously on the 24th of September 2013.6 Maurizio Belpietro, an Italian journalist, had been found guilty of defamation in a political case by two consecutive courts in Milan, and had been condemned to the payment of a fine and a suspended sentence of four months imprisonment. The Italian journalist, contrary from his Maltese counterpart, did not spend a single day in jail. The Strasbourg Court, building on previous case law, ruled that the very sentence of incarceration passed on a journalist, even if suspended, violated the fundamental right to freedom of expression because it was disproportionate to the legitimate aim pursued and because of the chilling effect on journalists in their pursuit of public interest information. The Court found Italy guilty of breaching Article 10 of the Convention and condemned it to pay the victim €10,000 for non-pecuniary damages (pain and suffering) and €5000 to cover costs and expenses. Fortified by this decision from the Strasbourg Court, Mr Calleja sued in Malta for a similar recognition of a breach of his freedom-of-expression rights and for compensation. The Attorney-General raised several pleas. As for the remedy, the AG submitted that, were the court to find a violation, a declaration of such breach on its own would be a just and sufficient remedy, i.e., that no compensation at all should be awarded. This action was decided by the First Hall Civil Court in its constitutional jurisdiction in favour of Joseph Calleja. In an excellently crafted judgment, academically waterproof and compellingly reasoned, the Court showed itself sensitive to several personal and societal issues raised.7 The Court dealt at some length with all the pleas raised by the defendant, some preliminary and others on the merits. It accepted the plea that the claim by the applicant did not fall under Article 10 of the Convention as the facts alleged happened long before Malta had incorporated the Convention as part of the domestic law of the island.8 Those same facts however attracted the protection of Article 41 of the Constitution, the alleged domestic safeguard to Freedom of Expression. 6 7 8
Belpietro c. Italie, (43612/10), 24 September 2013. Joseph Calleja vs Avukat Generali, PA 51/14 LSO, 27 October 2016. Chapter 319 of the Laws of Malta, Act XIV of 1987.
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The Court then dismissed the plea of non-exhaustion of other remedies raised by the Attorney-General. There were no remedies under the domestic legal order apart from real damages (lucrum cessans and damnum emergens) and Maltese law clearly excluded any compensation for moral damages for pain, suffering, reputational loss, etc. The Court also made short shrift of the plea that Calleja’s action be deemed frivolous and vexatious, owing mostly to the length of time the applicant had allowed to elapse between the alleged violation and his action for redress. The court listed several factual and legal reasons to explain the delay and why the passage of time had still left the applicant a victim of a violation of his human rights. On the merits, the judgment turned into an exhaustive and elaborate overview of Strasbourg case law on the role, functions and limitations of journalists, on the ‘chilling effects’ of harsh punishments against pressmen, and the disservice this renders to a pluralistic and democratic society. Excellent under almost all aspects and a paragon of penetrating and compelling legal drafting. The judgment established a breach of Article 41 of the Constitution and, as a remedy, condemned the government to pay Joseph Calleja the sum of €5000 damages, each party to bear its own costs. End of story? No. The Attorney-General appealed to the Constitutional Court, praying that the various pleas raised in first instance, preliminary and on the merits, be upheld by the court. The AG pleaded that the amount of €5000 liquidated by the court in favour of Calleja was unreasonable and excessive. Calleja, in turn, lodged an incidental appeal, submitting that the amount awarded as damages was too low and should be increased and that he should not have been made to bear any costs. This is when disaster struck. In a calamity of a finding, the Constitutional Court confirmed the breach of the applicant’s fundamental right to freedom of expression by the wrongful judgments of the criminal courts through which he had spent 75 days abusively incarcerated for exercising his fundamental right to freedom of expression. But then, the appellate court agreed with the government that the amount liquidated in favour of the victim was too extravagant and, in spectacular defiance of the Belpietro findings, shrivelled the compensation to €2000. (Exercise: one day at the superior suite of the Mandarin Oriental Hotel in Shanghai puts you back €20,000. Question: 149
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according to the Constitutional Court of Malta, how many days must the certified victim of a human rights violation wrongfully rot in jail, to be able to afford one night in that hotel?). As if this pitiful mutilation of the compensation awarded was not enough of a punishment for the oppressed target of a human rights nightmare, the Constitutional Court also ordered Mr Calleja to pay the government over half the costs and expenses of the first set of proceedings, one quarter of the costs of the principal appeal and all the costs of the incidental appeal.9 These costs, which the victim had now to disburse out of pocket, amounted to more than three times the sum he ‘won’ as damages. For having had his fundamental human rights trampled upon by the government, for having languished illegally in prison for 75 days, and for having been branded a jailbird by a gross miscarriage of justice, the victim now earned from the Constitutional Court the satisfaction of having to enrich the government, his unpunished and triumphant predator. The persecuted is now the debtor, and the government, who rode roughshod over his human rights, is the creditor. It was only fair that a human rights court should maul the victim for asking for its protection against assaults on his human rights – he pays that money as entertainment tax on pain and suffering. A sore burlesque of justice but wrapped in a blister pack of silly legal jargon. This is the Constitutional Court of Malta: This is its dazzling way of redressing the target of a major human rights abuse it had just certified – To condemn the victim to pay the predator. The Constitutional Court is basically telling the government: Injure human rights and we will see to it that there is good money in it for you. Joseph Calleja took his desolate saga to the European Court of Human Rights, claiming that the €2000 liquidated in his favour by the Constitutional Court were abusive in the circumstances, and that, although recognized as a victim of a serious violation of human rights, even that risible award was utterly nullified by the order to pay costs which exceeded by far the sum awarded.10 9 10
Joseph Calleja vs Avukat Generali, CC, 12 June 2017. Calleja v Malta, 21 February 2019, 83275/17.
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His application was served on the Attorney-General, who in the Strasbourg Court, performed an amazing 180° volte face. Let us enjoy the acrobatics, even if markedly on the clumsy side. In the Maltese Courts, the Attorney-General had pleaded that not one Euro was due to Mr Calleja. When the first Court ordered him to pay the victim €5000, the Attorney-General indignantly appealed to the Constitutional Court, arguing that it would be fair and reasonable not to pay Mr Calleja one single cent – A simple declaration that he had suffered a violation of his human rights would be sufficient joy. Realizing how indefensible the mess created by the Constitutional Court had been, in Strasbourg, the lawyer of the state changed tack and spectacularly. While in Malta he had repeatedly clamoured that the €5000 awarded to the victim by the first court were unreasonable and excessive, in Strasbourg he voluntarily offered the victim more than the sum he had denounced in Malta. He offered to pay the victim €7000 for an out-of-court settlement to avoid the humiliation of another judgment by the ECtHR rubbishing what we, optimistically and for want of a better word, call the Maltese Courts of Justice. So, the very same state authority in Malta pleads that paying no compensation at all was reasonable, but then voluntarily offers to be ‘unreasonable’ with taxpayers’ money and to pay €7000 in Strasbourg. This is totally unprincipled: What was unreasonable to the state in the state’s own domestic courts suddenly and by abracadabra becomes reasonable to that same state in an international court. Mr Attorney-General, if you, as the juridical high priest of the state, solemnly pleaded in the Maltese courts that it would be unreasonable to pay Mr Calleja anything at all, how is it that in Strasbourg you conceded it would be reasonable to pay him €7000? On which occasion were you honest, and on which occasion were you parsimonious with honesty? I have already remarked elsewhere about these double standards by an organ of the state – one low bar for Malta and one high bar for Strasbourg, or vice versa: ‘these antics, unbecoming the most desperate litigant, become repugnant when they tarnish what we yearn to see as the majesty of the 151
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state. These are the hallmarks of shifting morality, the imposture of those who substitute convenience to ethics’.11 Is it permissible for the state to plead something in Malta and its opposite in Strasbourg? Apparently, it is not only possible – it is the going praxis. On Black Thursday, 21st February 2019, the Attorney-General’s offer was taken up by the Strasbourg Court, which however also augmented it by the shockingly lavish €2000 the Constitutional Court had already ordered the government to pay. Calleja’s case was only one of the five cases in which the Attorney-General had to acknowledge in substance that the remedy granted to the victims by the Constitutional Court was farcically outrageous and voluntarily increased that compensation – he did the same in the other four cases too. These five gestures by the Attorney-General, to rebuff and correct the insensitive howlers of the Constitutional Court, avoided the addition of another five cases to the 90% of the judgments of the Constitutional Court examined on the merits, which the ECtHR overturns. Malta already has an unbeatable European record of humiliations in Strasbourg. On the 21st February, the victorious-in-Malta government, some applicants and the ECtHR, in a compact common front, saw to it that this dreary record would not look drearier still. I apologise to my readers. I should have entitled this article ‘Justice – an obituary’.
11
Giovanni Bonello, Misunderstanding the Constitution, Malta, 2018, p 87.
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153
Consuelo Scerri Herrera Confessions in a Court of Law
Madame Justice Consuelo Scerri Herrera obtained her Diploma of Notary Public from the University of Malta in 1988 and her Doctorate of Laws from the University of Malta after presenting her thesis entitled ‘A Historical Development of Constitutional Law in Malta 1921-1988’. She obtained her Diploma in Canonical Marriage Cases and Jurisprudence and Procedure from the Ecclesiastical Tribunals of Malta in 1999. She was called to the bench in 1997 as a Magistrate and presided over civil and criminal cases which fell within the competence of the Magistrates Courts. She was promoted to Judge in June 2018 and now presides over the Criminal Court of Appeal. She has written many articles in various law journals on the subjects of Criminal Law and Constitutional Law. She has delivered many lectures on various topics of Criminal Law and was asked to be an examiner in a number of theses presented for the attainment of the Doctorate of Laws. She has also been asked to delivery lectures to law students at the University of Malta and has taught in the Police Academy in the courses which the Police Force organises for the new Inspectors of Police. She has also attended a number of seminars and courses overseas to enhance her professional training. Currently, she is reading for a Ph.D at the University of Malta, on the subject of rights pertaining to a subject prior to interrogation.
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1. Introduction
T
he law in Malta does not provide a definition for the term ‘confession’, but it is understood to be not just a mere statement of the accused, but a statement by which the accused admits to his guilt. The confession of an accused is only applicable to that particular accused, and not to a coaccused or third party. To this end, the law states that ‘a confession shall not be evidence except against the person making the same, and shall not operate to the prejudice of any other person’.1 ‘A suspect in which he or she voluntarily, knowingly and intelligently acknowledges that he or she committed or participated in the commission of a crime and which makes it clear that there is no defence in law that would make his or her conduct lawful, may define a confession as an out-of-court statement’.2 This is what the Court of Appeal meant in the Becker case3, when it held that a confession must be defined as ‘an unequivocal admission of guilt by an accused person’. An accused may release two types of statements: (i) a confession; and (ii) an exculpatory statement where he disproves the confession. It was argued whether such a statement would also benefit a co-accused. Arguably, in Malta this would, since the law4 expressly employs the word ‘confession’, and it would therefore follow that an exculpatory statement, which refers to another person, would be admissible. In a criminal trial, ‘exculpatory evidence’ is evidence that indicates the defendant did not commit the crime he has been accused of.
2. Examining Exculpatory Statements Exculpatory evidence takes on several different channels. It may be an attestation from a witness who states that she saw somebody other than the 1 Criminal Code (Chapter 9 of the Laws of Malta), Section 661 2 Reuben Johnson ‘Admissibility of confessions in criminal trials Mbuli’ (Doctor Legum, University of Zululand 1993) 3 Judgment of the Court of Justice delivered on the 19th January 1982 (1) Ursula Becker vs. Finanzamt Münster-Innenstadt (reference for a preliminary ruling from the Finanzgericht Münster). 4 Criminal Code (Chapter 9 of the Laws of Malta), Section 661
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accused commit the crime or that the accused was with the witness when the crime occurred. It may be actual evidence or an object taken from the crime scene, such as fingerprints lifted from a weapon that do not match the fingerprints of the accused. It may be video footage taken from a nearby camera that shows that the person who committed the crime has a different description to that of the accused. Exculpatory evidence may be real or documentary, direct evidence or circumstantial evidence, testimony or a physical exhibit presented in court. If it tends to show the defendant might not be guilty of the crime, it is ‘exculpatory’. In the well-known American case Brady vs. Maryland, the U.S. Supreme Court held that if a prosecutor was in possession of exculpatory evidence, he is duty bound to share that evidence with the defense. Failing to provide such information to the defense may give rise to the case being thrown out in a motion to dismiss, as a mistrial, or being overturned on appeal. The Supreme Court based its ruling on the reasoning that it is also the responsibility of the prosecutor to seek justice and thus to make sure that all evidence, not just evidence that supports the prosecutor’s case, is available at trial. In the United Kingdom, in the case Sat-Bhambra5, the Court of Appeal confirmed that exculpatory statements are not within the meaning of section 82 of the PACE Act 1984. The question that arose in this case is whether a statement that became damaging at the trial could be described as wholly or partly adverse to its author. Lord Lane said in no uncertain manner that section 76 could hardly be directed at statements, which contained nothing adverse to the author’s interest. It would mean that the statement ‘I had nothing to do with it’ might in due course become a confession, which would be surpassing with or without section 82. The author agrees with this reasoning, because otherwise we would be describing an exculpatory statement as being a confession which, in reality, is not. In Malta, we find a similar provision relating to exculpatory statements in the Criminal Code ‘in that the deposition of witnesses, whether against or in favour of the person charged or accused, if taken on oath in the course of the inquiry according to law, shall be admissible as evidence’.6 Although this is not known as an exculpatory statement in reality, it has the same significance. In short, exculpatory evidence tends to show a defendant is not guilty. 5 6
1989 Cr App R 61. Criminal Code (Chapter 9 of the Laws of Malta), Section 646(2)
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On the other hand, the confessional statement of an accused is regulated by Article 658 of the Criminal Code which, prior to Act LI of 2016 being enacted, provided the following: ‘Any confession made by the person charged or accused, whether in writing or orally, may be received in evidence against the person who made it, provided it appears that such confession was made voluntarily, and not extorted or obtained by means of threats or intimidation, or of any promise or suggestion of favour’. Through Act LI of 2016, the wording in this same section is slightly different in that it now includes also confessions made by ‘audio-visual means or other means’. It now reads the following: ‘Any confession made by the person charged or accused, whether in writing, orally, by audio-visual means or by other means, may be received in evidence against or in favour of the person, as the case may be, who made it, provided it appears that such confession was made voluntarily, and not extorted or obtained by means of threats or intimidation, or of any promise or suggestion of favour’.7 In the United Kingdom, the PACE Act8 adopts an inclusive definition to the term ‘confession’, as was recommended by the Criminal Law Revision Committee.9 It stipulates that in this Act: ‘Confessions includes any statement wholly or partly adverse to the person who made it, whether made to a person in authority or not and whether made in words or otherwise’. Thus, this implies that there is no difference between a statement wholly or partly oppugning to the accused and as confirmed in the judgment in the names Customs and excise Comrs vs. Harz and Power.10 Lord Reid confirmed that there is no difference in relation to admissibility between a confession and an admission falling short of a full admission.11 No doubt that should 7 2016. 8 9 10 11
Criminal Code (Chapter 9 of the Laws of Malta), Section 658 as amended by Act LI of Section 82(1) of the PACE Act of 1984. 11th Report (Cmnd 4991) paras 58 and 66. (1967) 1 AC 760 at 817-818. Per Lord Havers in R vs. Sharp (1988) 1 ALL ER 65 HL at 68.
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an accused person plead guilty and then wish to change his plea, his first statement would be entertained as a confessional statement. However, even here if it results that the accused who pleaded guilty was not aware of what he was being charged and therefore did not understand the consequences of his guilty plea, the Judge can still exclude the evidence in the exercise of his discretion.12 Interesting to note, however, that Section 82 of the PACE Act is not directed to exculpating statements, which can later result in being incorrect, or cooked up when compared to the evidence by the accused on oath.13 An informal confession is an out-of-court statement made by an accused or suspect person generally against his own interest and generally, this is admissible evidence as an exception to the hearsay rule. This is however admissible as evidence of the veracity of its contents, on the premise that what a person says against himself is likely to be true. An informal statement is usually released to a person in authority such as the investigating police officer or the inquiring Magistrate at interrogation stage. This many a time will contain a full admission of guilt or incriminating statements.14 A confession could not be given as evidence by the prosecution unless shown by them to be a voluntary statement in the sense that it was not obtained from the accused or suspect by any prejudice, fear or hope of an advantage in return exercised by such person in authority.15 If the admissibility of this statement is in issue, then such a matter would be decided upon by the trial judge. It is of vital importance, however, that the confession must be made voluntarily in order for it to be admissible, and therefore it must be made out of the unconditioned free will of the accused and not because he is forced to do in any way. Notwithstanding this, it is important to pinpoint that in Malta, the law employs the word ‘voluntarily’ and not ‘spontaneously’ and thus, any confession elicited by police or any person in authority is just the same receivable in evidence. However, any kinds of threats, intimidation or promises of favour would completely negate such voluntariness. This is also the position in the United Kingdom. The reasoning for this rule is that possibly, an involuntary confession would not be reliable. For example,: a 12 R vs. Rimmer (1972) 1 WLR 268 and also R vs. Hethergton (1972) Crim LR 703 CA. 13 R vs. Park (1993) 99 Cr App R 270 CA. 14 See per Lord Reid in Customs and Excise Comrs vs. Harz and Power (1967) 1 AC 760 at 817 – 818. 15 Per Viscount Dilhorne in Deokinaman vs. R (1969) 1 AC 20 PC at 33.
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police officer would tell a suspect that unless he confesses he will not be granted bail, and thus the suspect would make untrue confessions with the aim of shortening his detention. This situation then led to the rule that confessions are excluded if made as a result to an inducement, as will be explained later in this same chapter. In the United Kingdom, the Criminal Law Revision Committee took the view that the law on this matter was very strict and should be moderated. It in fact suggested that a confession should be excluded if obtained by oppression or made as a result to a threat or inducement likely to produce an unreliable confession. It also considered replacing the test of voluntariness and recommended that a confession should only be dismissed if it is proved that such confession was made as a result of violence, threats of violence, torture or inhuman degrading treatment.16 However, the situation today is regulated by the provisions of Section 76 of the same PACE Act 1984, in that it is inadmissible if made as a result of oppression or in pursuance of something said or done likely to make the confession unreliable.
3. Difference between a confession and an admission Admission and confession are two very important concepts used in the law of evidence by lawyers, to strengthen their cases before a court of law. Both admissions and confessions are used as sources of evidence. Most of us are familiar with the concept of confession as we accept and talk about our wrongdoing and describe what has been done. Admission, on the other hand, refers to a statement accepted by a person. The acknowledgement of a fact is akin to admitting it. There are many similarities in the two concepts, but there are also subtle differences that will be highlighted in due course. For example, if during interrogation a suspect or accused person nods to a fact or statement, then he is admitting or acknowledging that fact which is being discussed. Admission by a person can be taken in a court of law as a statement that proves guilt or a crime. Accused persons make admissions in their confessions many a times, about their participation in the events being imputed to them. Confession, on the other hand, is the act of acknowledging one’s involvement in an act of crime or wrongdoing, however; a confession does not necessarily amount to an admission. 16
Cmnd 8092 para 4 – 12.
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Whereas a confession is an acceptance of guilt in a crime or wrongdoing, an admission is the acknowledgment of a statement or a fact. An accused person can retract from a confession made earlier during the interrogation, but retraction from admission is very hard to call back unless it is proved that such admission was obtained illegally. Also, a confession can only be made by the accused; an admission can be made by others too. Section 82 of the PACE Act 1984 defines the term confession which includes an informal admission made out of court. No distinction is to be made between a full confession and admissions that fall short of a null confession. It is insignificant to whom the confession was given. Therefore, what a person says to another person, even if not in authority, is tantamount to a confession. It includes any statement whether made in writing or otherwise, for example, a suspect releases a written statement to the police. Alternatively, admissions can be made in other forms of documents. For example, an accused person makes an admission to a crime in writing to a friend, which letter is later intercepted by a third party, or that letter is handed over for further investigation by the same friend. Such admissions would also be admissible at common law in the United Kingdom. In Malta, on the other hand, the Courts would be very weary of such evidence and would have to be convinced of its source and purpose. A question may arise as to whether an admission by conduct is admissible. For example, if a police officer asks a suspect if he has committed a particular offence and the suspect simply nods as a reply, can we take this as a fullblown admission upon which to base a verdict of guilt? It appears that this conduct would fall in the definition of an admission. However, admissions by conduct are only admitted in exceptional cases. In Preece vs. Parry17 the Divisional Court held that the behaviour of the suspects when arrested was abusive and violent and thus, this same behaviour could amount to an admission. This situation of admissions by conduct are hard to come by, especially in the Maltese system where the far majority of interrogations take place without video camera recording. If the interrogation were to be recorded on camera, the behaviour and mannerisms of the suspect could be recorded, and thus interpreted by the person who has to judge upon the facts. Unlike confessions, admissions which are not based on personal 17
(1983) Crim L.R 170.
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knowledge are not admissible to prove facts. In the case of Sturujpaul vs. R,18 the Privy Council held that a suspect can confess as to his own acts, knowledge or intentions, but he cannot ‘confess’ as to the acts of other persons which he has not seen, and of which he can only have knowledge by hearsay. By example, a reference can be made to the handling of goods, which it is sought by admission that the goods were in fact stolen. Now, if the accused admitted that he bought the goods in question very cheaply at night in a remote place, he would be admitting to a fact within his own personal knowledge and it may lead the Jury to infer that from the circumstance of the acquisition of the goods the goods were actually stolen. However, if on the other hand the accused simply says that he believed the goods to be stolen or that he was told that they were stolen, he would not be speaking from his personal knowledge. Such evidence is not tantamount to an admission that the goods were in fact stolen. This reasoning is based on the proposition that ‘if a man admits something of which he knows nothing, it is on no real evidential value’ as was held in the case Comptroller of Customs vs. Western Lectic Co Ltd per Lord Hodson. This leads us to another question as to whether admissions made by the agent of the accused, for example his lawyer, are admissible. The trend is to consider them admissible if such admissions were made with the authority of the same accused. In the British case of Evans19, the Court of Appeal held that the conversation between a clerk of the accused’s lawyer and a potential witness was considered as inadmissible, since it was not proven that the clerk was in fact acting with the accused’s consent. Likewise, in the case of Hutchinson20, a letter written by the lawyer of a suspect to the Department of Public Prosecution contradicting statements in an alibi notice was held to be admissible, since it was similar to a previous statement made by the same accused upon interrogation.
4. When is a confession admissible? The general rule is that a confession by an accused person may be given in evidence, if it is relevant to any matter in the trial and has not been excluded by the court for some particular reason. This is the same position in 18 19 20
1958 1 W.R.L 1050 1056. 1981 Crim L.R 699. 1985 82 Cr App R 51.
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the United Kingdom where the court can exclude a confession on the basis of Section 76(2)21 and Section 7822 of the PACE Act. Therefore, when considering the admissibility of a confession, the court must have in mind that the confession was given in a regular fashion, and that it would not have an unfair effect on the fairness of the proceedings. It is of paramount importance that a confession is taken in terms of the law, since otherwise such a statement could be withdrawn from the proceedings. In fact, there are a number of cases here in Malta whereby the statement was considered to be not in line with the disposition of the law (in particular, Section 658 of the Criminal Code) and thus, the Court ordered that it should not be taken into account as admissible since allowing such evidence would undoubtedly cause prejudice to the accused. This could have serious results because if withdrawn from the case the prosecution could be left without any evidence and this could also in extreme cases lead to the acquittal of the accused. As a matter of fact, this has happened on many occasions in recent times, when the prosecution exhibited statements taken of the accused and even though they thought that they had ‘la regina della prova’ and therefore stopped short of producing any further evidence, the Court upheld the request of the defence to have them withdrawn from the proceedings and the accused ended up acquitted.23 There are also a number of European Court judgments, which upheld the same line of reasoning on the matter.24 21 ‘If, in any proceedings where the prosecution proposes to give in evidence a confession made by an accused person, it is represented to the court that the confession was or may have been obtained— (a) by oppression of the person who made it; or (b) in consequence of anything said or done which was likely, in the circumstances existing at the time, to render unreliable any confession which might be made by him in consequence thereof, the court shall not allow the confession to be given in evidence against him except in so far as the prosecution proves to the court beyond reasonable doubt that the confession (notwithstanding that it may be true) was not obtained as aforesaid’. 22 ‘In any proceedings the court may refuse to allow evidence on which the prosecution proposes to rely to be given if it appears to the court that, having regard to all the circumstances, including the circumstances in which the evidence was obtained, the admission of the evidence would have such an adverse effect on the fairness of the proceedings that the court ought not to admit it’. 23 Il-Pulizija vs. Alvin Privitera decided by the Courts of Magistrates as a court of criminal judicature on the 11th April 2011. Likewise ir-Repubblika ta’ Malta vs. Martin Dimech decided by the First Hall civil court in its Constitutional jurisdiction on the 10th January 2012. 24 Imbrioscia vs. Switzerland decided by the Grand Chamber on the 24th November 1993 and Taxquet vs. Belgium also decided by the same Chamber on the 8th May 2013.
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Prior to the judgment, delivered in Malta in the names Pulizija vs. Carmel Camilleri and Therese sive Tessie Agius,25 the question as to what constitutes a valid statement was never really discussed in case law. The court always took the stand that what constitutes a valid statement relies solely on its discretion or in the discretion left to the jurors who have to decide on similar matters before a Criminal court. No statutory guidelines were ever released in Malta. The Court made reference to the UK Judges Rules which although are not hard, binding and steadfast rules, certainly helped and provided markers on what really constitutes an admissible statement. Although these Judges rules do not even have the force of law, they are still seen by the Judiciary as protocols on which to move forward. It must be pinpointed that a statement can be made in writing or orally, until the amendment of Act LI of 2016 (when the terms by audio-visual means or other means was introduced) and this fact was emphasised in the judgment in the names il-Pulizija vs. Aaron Axisa26 wherein the Court held: ‘Mix-xhieda tal-Ispettur Daniel Zammit jirriżulta li l-appellant kien ammetta miegħu u ma’ membri oħra tal-Korp tal-Pulizija li l-appellant kien daħal fil-Knisja u wettaq is-serqa. Fl-istqarrijiet li għamel l-appellant din l-ammissjoni ma tidhirx. ...Iżda legalment ma torbotx biss l-istqarrija bil-miktub. L-artikolu 658 tal-Kap 9 għandu l-kelmiet ‘kemm ukoll bil-fomm’. Dan huwa x’qal direttament l-appellant lill-Ispettur u mhux x’qal ħaddieħor lill-Ispettur li kien qal l-appellant. Permezz ta’ dan l-artikolu tal-Kap 9 tali xhieda hija ammissibbli u mhijiex hearsay evidence...’. In this latter case, the issue of the ‘caution’ (which will be discussed later on in this same chapter) was not brought to the floor. The issue was whether what a suspect says to the investigating police ‘orally’ still amounts to a confession once made voluntarily. The Court rightly held that it would still amount to a confession despite not being written down in a statement. As explained earlier, Maltese law is rather absent and creates confusion on this subject, since it provides no strictu juris guidelines and leaves the matter to be assessed in the light of Section 658 of the Criminal Code as 25 26
Decided by the Criminal Court of Appeal on the 9th October 1998. Delivered by the Criminal Court of Appeal on the 20th September 2013.
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stipulated above. In the judgment delivered in the names il-Pulizija vs. Joseph Fenech,27 the appellant asked for the judgement of the first court to be revoked because he claimed that his statement was obtained by fraud. The Court made reference to Article 658 of the criminal code, which stated that a statement will be declared inadmissible if it is proven that it was not made voluntarily, and obtained by means of threats, promises or fear. It argued that fraud per se is not one of these elements, and from the evidence gathered there was no proof of threats or fear and thus rejected his appeal.28 In the British system, this subject of confessional statements is regulated by a Code of Practice, which was brought to the fore after the enactment of the Criminal Evidence Act 1984, which Act came into force on the 1st January 1986. Thus, today in Britain, the topic of confessional statements is regulated by law, specifically by Part VIII of the said Act of 1984 in Article 76 entitled ‘confessions’, in the part named Evidence in Criminal Proceedings in General. It appears that in Malta we have followed the British system, as drawn out in these Judges Rules of 1964, though purely by custom. Cross and Wilkins, in their book An Outline on the Law of Evidence29 state the following: ‘A confession of guilt in a criminal case is only admissible if it was not made in consequence of a threat or inducement of a temporal nature relating to the prosecution, made or held out by a person in authority over the prosecution. This is often summoned up by saying that a confession must be voluntary, if it is not voluntary within the above definition, then it is altogether inadmissible’. This means that for a statement to be considered as made voluntarily, it is necessary that such statement was not obtained on the premise that the accused person was going to suffer some prejudice, or with the premise that he was going to be given some form of advantage, or due to some 27 Decided by the Court of Criminal Appeal on the 25th June 1999. 28 Vide also Il-Pulizija vs. Richard Caruana decided by the Superior Court of Appeal on the 20th May 2013. 29 ‘An Outline of the Law of Evidence’ (1964) 23 The Cambridge Law Journal 141
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oppression as a result of what was said by some figure of authority. In a like manner, Judge Sacks in the prominent British case R. vs. Priestly30 held that: ‘Whether or not there is oppression in an individual case depends upon many elements. I am not going into all of them. They include such things as the length of time of any individual period of questioning, the length of time of intervening between periods of questioning, whether the accused person had been given proper refreshment or not, and the characteristic of the person who makes the statement’. On this same subject, Archbold, in his book entitled Criminal Pleading, Evidence and Practice31 provides that: ‘In order to be admissible a confession must be free and voluntary and unless it be shown affirmatively on the part of the prosecution that it was made without the prisoner being induced to make it by promise of favour or by menaces or undue terror, it shall not be received in evidence against him’. G.D. Nokes, in his book named An Introduction to Evidence32 accommodates the following: ‘Few subjects in the law of evidence presents more perplexing inconsistencies than the emergence of the rule against forced confessions’. The subject of inadmissibility of statements as valid evidence against the person releasing them has been discussed in detail many a time, and more so with the hope of controlling and reducing abusive methods used by the police, rather than from the point of view of assessing whether what the accused is alleging is true. This in consonance with what is provided in the book Criminal Evidence by Cross and Williams that ‘certain standards of the police practices have to be observed and confessions obtained in violation of such standards are to be rejected’. 30 (1967) 51 Cr. App. R 1. 31 Butler - Edited by T.R. Fitzwalter Butler, Marston Garsia -36th edition 32 Sweet & Maxwell, London -3rd edition
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Archbold, in his book Criminal Pleading, Evidence and Practice,33 states that ‘in order to be admissible a confession must be free and voluntary and unless it be shown affirmatively on the part of the prosecution that it was made without the prisoner being induced to make it by promise of favour or by menaces or undue terror, it shall not be received in evidence against him’. On this point at issue, the author feels that she should make reference to what was said by the Supreme Court of the United States in its well-studied judgment in the names Miranda vs State of Arizona34 which, in her opinion, is very relevant to the current situation in that: ‘It is obvious that an interrogation environment is created for no purpose other than to subjugate the individual to the will of his examiner. This atmosphere carries its own badge of intimidation. To be sure, this is not physical intimidation, but it is equally destructive of human dignity. The current practice of in communicado interrogation is at odds with one of our Nation’s most cherished principles – that the individual may not be compelled to incriminate himself. Unless adequate protective devices are employed to dispel the compulsion inherent in custodial surroundings, no statement obtained from the defendant can truly be the product of his free choice’. This matter was dealt with in the European Court judgment in the names Ismail Abdurahman against the United Kingdom35. The facts of this case are the following. In the 21 July attacks, bombs were detonated on the London public transport system but failed to explode. The wrong doers made their escape but were later arrested. Following the arrest of the first three applicants – Mr Ibrahim, Mr Mohammed and Mr Omar – they were temporarily refused legal assistance in police ‘safety interviews’. Under the British Terrorism Act 2000, such interviews can take place in the absence of a solicitor and before the detainee has had the opportunity to seek legal advice. During these interviews, the applicants denied any involvement in or knowledge of the events of the 21st of July. At trial, they acknowledged their involvement in the events, but claimed that the bombs had been a hoax and were never 33 Butler - Edited by: T.R. Fitzwalter Butler, Marston Garsia -’36th edition 34 Decided by the Supreme Court of Arizona on the 13th of June, 1966 - 384 U.S. 436 (1966) 35 Decided by the European Court of Human Rights on the 13th September 2016. Application no. 40351/09
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intended to explode. The statements made at their safety interviews were admitted at trial. They were convicted in July 2007 of conspiracy to murder and sentenced to a minimum term of 40 years’ imprisonment. The Court of Appeal subsequently refused leave to appeal against their conviction. Mr Abdurahman, the fourth applicant, was not suspected of having discharged a bomb and was initially interviewed by the police as a witness. He started to incriminate himself by explaining his encounter with one of the suspected bombers shortly after the attacks and the assistance he provided to that suspect. The police did not, at that stage, arrest him, caution him and advise him of his right to silence and to legal assistance. Instead, they continued to question him as a witness and took a written statement from him. He was subsequently arrested and offered legal advice. In his ensuing interviews, he consistently referred to his written statement. This statement was admitted as evidence at his trial. He was convicted in February 2008 of assisting one of the bombers and of failing to disclose information about the bombings. He was sentenced to ten years’ imprisonment. His appeal against his conviction was dismissed in November 2008 and his sentence reduced to eight years’ imprisonment on account of the early assistance that he had given to the police. Although the law is silent with regards to the validity of inadmissible evidence, reference can be made to case law on the subject, which provides in no uncertain terms that such evidence would have to be discarded.
5. Voluntariness of a confession It is of paramount importance that a confession is made voluntarily since this is required in the law itself when it states that a confession is admissible ‘provided it appears that such confession was made voluntarily’.36 An essential element that is needed to establish whether a statement is given voluntarily or not is that of ‘inducement’. The traditional reason why a statement that is obtained as a result of this inducement is inadmissible, is because it can safely be said that such a statement would rarely contain any truth in it. Despite what was stated earlier on, there can still be control on the methods used by the executive police in obtaining such statements. One would naturally ask what an incumbent is. This is the cardinal point why the accused has 36
Criminal Code (Chapter 9 of the Laws of Malta), Section 658
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in fact released his statement. For example, when a police officer promises forgiveness and then obtains a statement of guilt from such person, such behaviour being tantamount to ‘inducement’ renders such said statement inadmissible. It is important that words of encouragement, suggestion or of offering are communicated to the person under interrogation and not to a third party, in order to render such statement inadmissible. This inducement generally consists in a promise to be given an advantage once the person under interrogation confesses. or in a threat or fear of a disadvantage should the person under interrogation not confess. Whereas in Malta, it is the court or the jurors as the case may be who have to decide on such matters solely upon their discretion with no statutory direction at all, in the UK the court is faced with written instructions as laid in the PACE Act. In Malta, the deciding judge has to decide as to whether the words used or the behavioural patterns of the investigating police officers were such as to have caused such ‘inducement’ to make such a statement inadmissible. Thus, it appears in my assessment that the deciding Judge or Magistrate or Jurors have to take into account certain additional factors in order for them to be in a position if there was any inducement or not. For example, the character of the person interrogating, behavioural patterns in getting across during the interrogation, tone of voice and other similar circumstances which could lead the court to conclude whether there was any ‘inducement’ or not. Thus, in such a context the new amendment, which provides for audiovisual recordings of a confession can be very helpful. The person who has to decide on the admissibility or otherwise of such a confession could be helped if faced with an alleged fact of abuse committed by the person in authority, for example, high pitched voice or a forceful leading voice since the person who has to decide would be in a position to hear for himself the intonation of the interview which led to the confession. In Malta, the police are not very well equipped with video voice recording and in fact, there is only one machine held at the General Head Quarters and this is used only in connection with high profile sensitive cases. In fact, it was used when the police were investigating and interrogating the ex Chief Justice Dr Noel Arrigo in connection with a crime of bribery, as well as in murder cases. This machine provides three copies at the same time of such a confession. Once the confession is finished, the police hand a copy of such confession to the suspect, keep a copy of such confession for themselves and subsequently 169
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present the third copy in court together with a written copy of the audio recording to form part of the evidence of the prosecution. This system certainly reduces the possibility of abuse being carried out by the person in authority and leads to a lesser number of allegations of abuse being carried out by such persons in authority. This method of interrogation, however, can cause further problems with regards to the payment of such a service since the law does not provide who is responsible for the production of the type written copy of the audio recording and it is only recently that this issue arose in court as to who is responsible for such a document. The court was unwilling to nominate a person to make the transcript of an audio recording whereas the prosecution was contending that it did not have the resources to provide for such a transcript. Under the Maltese system, where the system that is adopted in Court is acquisitorial it is the duty of the prosecution to prove its case beyond reasonable doubt and thus it rests on the prosecution to bring forward its evidence since the accused could stay silent and defend himself simply and solely on the evidence brought forward by the prosecution. The deciding Magistrate then went on to nominate a person to make such a transcript at the expense of the government which expense will be borne by the accused should he be found guilty of the offence he was charged with and this in terms with the law.37 As to what amounts to ‘inducement’ Archbold surmised the following: ‘Inducement must refer to a ‘temporal benefit’.38 Where an inducement merely amounts to a moral admonition and does not refer to a materialistic advantage or of a civil nature the confession is admissible. Words like ‘be certain to be honest’ and ‘don’t cause more prejudice to yourself by persisting with your lies, say the honest truth’ will be treated as innocuous and do not render a confession inadmissible. Thus, words in the sense that it would be better to say the truth because the police already know everything amount to moral incitement from which the accused will not be procuring any physical or temporal advantage as is acquired with the words ‘tell me where the stolen things are I’ll be more favourable in your regard as a consequence’. Words explained in the latter example indicate an advantage that the accused person may receive in consequence of an admission and thus, vitiate such a confession. Once a confession is considered to be vitiated, then the deciding judge would not take cognisance of it and discard it with 37 38
Ibid, Section 533(1) Emphasised by the author
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the consequential possibility that whole trial could be disturbed especially if the prosecution did not proceed with further evidence, but relied solely on the admission of an accused person as stated in his statement. This could have a cascading effect and bring the trial to cinders as has in fact happened in the trial of Alvin Privitera. In the latter case in the name Il Pulizija vs Alvin Privitera39 during the sitting of the 22nd June 2011, the parties to the case dictated a verbal in the sense that ‘l-istqarrija tal-imputat hija l-unika prova kontra tiegħu f’dawn ilproċeduri’.40 The deciding Magistrate stated that the statement was not taken according to law in that the right to a fair trial of the accused had been infringed and thus, decided to do away with such a statement, disregard it in total, and acquitted the accused. It concluded by saying that ‘għal raġunijiet mogħtija iktar ‘il fuq, din l-istqarrija ma jista’ jkollha l-ebda influwenza diretta jew indiretta fuq l-esitu ta’ dawn il-proċeduri kriminali għaliex ttieħdet bi ksur tad-dritt ta’ smigħ xieraq tal-imputat u għalhekk qed tiġi skartata minn din ilQorti’.41 However, in another landmark case held in Malta in the names Il Pulizija vs Jason Cortis,42 the Court took on a different view. In this case, the defence lawyer had likewise asked the Court to discard the statement given by the accused appellant since it was made in the absence of the accused being given the right to be assisted by a lawyer. The Court made reference to a number of other cases already decided on the same subject.43 39 Decided by the Courts of Magistrates as a Court of Criminal Judicature on the 7th July 2011 40 The statement to f the accused was the only piece of evidence of the prosecution. 41 Vide also Il-Pulizija vs Mark Lombardi decided by the Courts of Magistrates of Criminal Judicature on the 9th October, 2009 and Il-Pulizija vs Esron Pullicino decided by the Courts of Magistrates of Criminal Judicature on the 24th February, 2010 which two judgments were also confirmed on appeal. 42 Decided by the Criminal Court of Appeal on the 6th October 2016 Application Number 2224.14. 43 Il-Pulizija vs Alvin Privitera decided by the Constitutional Court on the 11th April, 2002. Il-Pulizija vs Mark Lombardi decided by the Constitutional Court on the 12th April, 2002, Charles Steven Muscat vs Avukat Generali decided by the Constitutional Court on the 8th October, 2012, Il-Pulizija vs Amanda Agius decided by the Constitutional Court on the 22nd February, 2013, Il-Pulizija vs Tyrone Fenech decided by the Constitutional Court on the 22nd February, 2013. IrRepubblika ta’ Malta vs Martin Dimech decided by the Constitutional Court on the 26th April, 2013, Ir-Repubblika ta’ Malta vs Antonio Abdilla et decided by the Criminal Court of Appeal on the 9th May, 2013, Ir-Repubblika ta’ Malta vs Carmel Saliba decided by the Criminal Court of Appeal on the 2nd May, 2013, Il-Pulizija vs Jesmond Camilleri decided by the Criminal Court of Appeal on the 18th April, 2013, Il-Pulizija vs Alexei Zerafa decided by the Criminal Court of Appeal on the 31st July,
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In this same case, the Court held that the accused who at the time was twenty one years old had given the statement after he was duly cautioned that what he was going to say could be used as evidence against him and reduced in writing, and that such statement was done without any promise of any benefit or advantage, and with no use of fear or threats and thus, the accused made no allegation that his statement was not taken in conformity with Article 658 of the Criminal Code aforementioned and thus, the court had to look into the matter and see whether it should still discard the statement once there is no wrong doing alleged with reference to Article 658 of the Criminal Code. The Court concluded that it was not going to discard the statement and held ‘li mhijiex sejra tiskarta l-istqarrija rilaxxjata mill-istess imputat, sa fejn din hija korroborata minn provi oħrajn’. Thus, it appears that the test as to whether a statement is admissible or not was whether such a statement was given according to Article 658 of the criminal Code. Subsequent to the EU Directive 2013/48, the position has changed since as will be explained later on there are a number of cases where the statement was rejected and withdrawn from the proceedings solely on the premise that they were taken in the absence of legal assistance. Going back to the term of ‘inducement’, such words of inducement have to be stated by a person in authority, such as police who are investigating and that such words are said in conjunction with the crime that is being investigated. For example, the investigating police officer tells the suspect words such as the following: ‘I know that you were robbing the old lady on Friday night and that you were with someone else but if you admit to this then we can say you have helped the police solve the author of this crime and pretend that it was your friend that induced you to commit this crime and thus your punishment would be less severe’. The definition that is given by the authors Cross & Willkins44 to persons in authority is ‘anyone whom the accused might reasonably have considered to have been capable of influencing the outcome of a prosecution. A police officer, magistrate or prosecutor is clearly included’. Not much can be added to such a definition. It is also important to see who will be receiving the promised advantage or benefit with the words of such ‘inducement’ or who 2013, Il-Pulizija vs Paul Cutajar decided by the Criminal Court of Appeal on the 18th June, 2013, Il-Pulizija vs Deborah Osmond decided by the Criminal Court of Appeal on the 31st October, 2013, and Il-Pulizija vs Robert Busuttil decided by the Criminal Court of Appeal on the 20th February, 2014. 44
Op cit
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is going to be out in a worse position as a result of the threats or promises made to the interrogated person. According to Maltese law, such words of endearment or of threats have to be made to the person under interrogation and effect his person. The defence has to prove that as a result of such behaviour from the person in authority the person under interrogation made such a statement on the premise that he was going to better his/her position. It is only the person under interrogation who should acquire such benefit or should be confessing due to fear and not any other person who has nothing to do with that same interrogation. In this context, Archbold45 again states: ‘it is no objection to the admissibility of a confession if it was made under a mistaken supposition that a prisoners accomplice was in custody, even though it were created by artifice, with a view to obtain a confession’. In fact, I may boldly say that a promise of some advantage to others is not regarded as an inducement to confess. In Rex vs. Burley,46 the Court concluded that ‘A confession has been treated as voluntary although it was the result of ‘misleading’ the prisoner into thinking that his accomplices were also in custody’. Professor Mamo47 provides the following: ‘The exhortation is only right for you to clear the innocent ones, has been held not to exclude the consequent confession’. Therefore, the fact that a person under interrogation states that a third party would be achieving a benefit or a disadvantage does not in itself translate to a statement not being made voluntarily, and therefore being inadmissible. In the judgment Pulizija vs. Carmel Camilleri and Therese sive Tessie Agius48, the accused filed an appeal wherein he was claiming that the first court of Magistrates should not have taken into consideration his statement when delivering its judgment because he felt that his statement was not given voluntarily and was only given on account of promises he was allegedly given by the prosecution. In fact, in this case the fact that the accused person Carmel Camilleri made a statement because he was told by the prosecuting officer that by admitting to the crime that was being investigated about, his girlfriend Theresa Agius was going to be exempted from punishment was 45 46 47 48 272/94
Op cit. A Treatise of the Law of Evidence eight edition by Lord S March Phillipps esq page 21. In his book ‘Criminal evidence’ Decided by the Criminal Court of Appeal on the 9th October 1998 Application Number
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not enough to have his statement vitiated. At this juncture, the Court held that: ‘Huwa opportun li jingħad hawnhekk illi r rilaxx ta’ stqarrija da parti ta’ min ikun qed jigi interrogat mill-pulizija huwa fakoltattiv, fis-sens li dana m’għandu l-ebda obbligu li jirrilaxxja stqarrija jew li jirrispondi għal domandi posti lilu mill-pulizija. MInn dan jirizulta l-prinċipju fondamentali fil-materja ta’ stqarrija li din trid tkun volontarja u mhux spontaea sabiex ikollha valur probabtorju’. In this case, the accused alleged that the interrogating officer had told him to think of Tessie Agius and the children and if he could help her, he should. However, once the police were faced with such an allegation the police officer explained that what he meant was that if he could help Agius he should say the truth. The Court felt that with such words the interrogating officer gave no promise to Camilleri from which he was going to obtain an advantage and that the words used amount to moral instigation and not to ‘temporal benefit’. Thus, his statement could not be considered as inadmissible. In the said case of Carmel Camilleri, the prosecution brought forward persons who were present when the statement was obtained. The accused did not contest the fact that he uttered the words reported in the statement; however, he said that he uttered such words because he thought that by saying so, Therese Agius (the co-accused) would be exonerated from the charges. The appellant explained that he used to live with Ms Aguis and together they had three children and thus, did not want her to end up in jail. So consequently, he decided to take all the blame and admitted to all the facts as stated by the prosecuting officer. He stated that he had repeated all that the investigating officer had advised him to say and thus, claimed that his statement was not made voluntarily and was obtained by means of promises done by the investigating officer. The appellant had said that: ‘L-ispettur għidltu li ma kontx ser inwieġeb. Qalli li kelli kull dritt. Qalli li kienu sabu d-droga fid-dar għand Agius. Meta rajt hekk jien iddeċidejt Ii ngħid li dawk kienu tiegħi biex ma tiħux it-tort hi. Għalhekk iddeċidejt li nieħu t-tort jien. Ħadt it-tort fuq suġġeriment tal-Ispettur. Hu qalli biex ngħin lil Agius bili hi kienet ser tieħu kollox 174
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hi. JIen iddeċidejt li nitfa’ kollox fuqi’. Here, the accused followed the theory well known in the British system particularly that aforementioned of ‘inducement’. The British author J.D. Heydon, in his book Evidence Cases and Material explains this element of ‘inducement’ with the following. ‘Inducement suggests an inquiry into the actual state of the accused’s mind. The test depends on the actual effect of the inducement on the accused’s mind’. The same author then makes reference to the judgment Regina vs Richards49 and outlines the test to be followed. He asks the question: ‘Did it go so far as to deprive the person to whom it was made of his free will and choice?’ The Court took note of such reasoning and held that the appellant had to prove the alleged fact that in other words that he would not have said what he actually stated if the conditions were different. It is imperative that with his evidence, the accused must throw doubt to the version of events as stated by the prosecution in obtaining the statement. Such doubts have to be generated either by arguments put forward by the defence or by other facts proven by the defence. This has to be done to seriously weaken the thesis of the prosecution.
6. Onus of proof of voluntariness of the confession As golden rule, the onus to prove that a statement was done voluntarily rests with the prosecution like all other pieces of evidence. The prosecution has to give prima facie proof about the existence of the statement being obtained voluntarily. The moment such fact is proved the accused would then have to prove the contrary in other words that his statement was obtained, extorted, or obtained by means of threats or intimidation, or of any promise or suggestion of favour. This is in line with the general dogma set out in our legal system that he who alleges a fact has to prove this same fact 49 [1974] 1 Q.B. 776. This was an English case decided by the Queen’s Bench that held that an accomplice to an assault cannot be convicted of a more serious offense than the principal, even if the accomplice had the mens rea necessary for the more serious offence.
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onus probanti incumbit ei qui dicit non ei qui negat. As witnessed in the case Il-Pulizija vs. James Gullaimier et50 the Court held that it was up to the prosecution to prove prima facie that the appellant released a statement voluntarily and that once this was proven it was up to the defence to prove the contrary. It held that: ‘Fi kliem ieħor meta d-difiża tissolleva l-punt tal-non volontarjetà tal-istqarrija rilaxxjata mill-akkużat, f’tali każ hija tkun assumiet l-obbligu li tressaq provi suffiċjenti in sostern tat-teżi tagħha, u dan sabiex l-akkużat jiġġenera dubju raġonevoli li l-verżjoni mogħtija mill-prosekuzzjoni...’ It provides further that:‘Dan ma huwa xejn ħlief l-applikazzjoni tal-prinċipju fundamentali fis-sistema legali li min qed jallega fatt irid jippruvah, iżda ma jfissirx ossia m’għandux jigi intiż b’mod li f’xi mument l-oneru li jiġi ppruvat ir-reat hu n-nexus bejn ir-reat u l-imputat jiġi spustjat għal fuq l-imputat, dan dejjem jibqa’ fuq il-Prosekuzzjoni tul il-proċess kollu. Iżda jekk akkużat bi sforz sabiex jindebolixxi l-provi tal-Prosekuzzjoni, jallega ċerti fatti, anke taħt ġurament, allura hu jkun xeħet fuqu l-oneru tal-prova ta’ dawn il-fatti’. In other words, when the defence raises the issues of the non-voluntariness of the statement released by the accused person, in this case it would be assuming the obligation of bringing forward sufficient evidence to sustain its allegation, and raise doubt as to the version of events brought forward by the prosecution.51 This however does not mean that the defence must prove the commission of the crime or the nexus between the accused and the crime. There is no shift in the onus for it is the prosecution who has to prove all the elements of a crime. However, if the accused decides to weaken the evidence brought forward by the prosecution, and thus alleges certain facts even if under oath then he would have taken upon himself to prove such facts. 50
Decided by the Criminal Court of Appeal on the 12th February 1999.
51 Vide in this regard Il-Pulizija vs Ian Pace decided by the Criminal Court of Appeal on the 19th July 2011.
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In like manner, in the case Il-Pulizija vs Francis Spiteri,52 the Court confirmed that as a rule it is the prosecution that must prove all the elements of the crime. However, once the prosecution proves its case on a basis of prima facie it is up to the defense to prove the contrary particularly when facts lie particularly within the knowledge of the accused. In other words, when the defence claims that a statement was not obtained voluntarily, it assumes at the same time the duty to bring forward evidence. In this regard, however, the accused does not have to prove his case on a level beyond reasonable doubt. The accused has only to bring forward evidence to create a reasonable doubt on the evidence brought forward by the prosecution, in which case the prosecution then must neutralise such doubt. The Court stated the following: ‘Per regola il-prova tinkombi fuq il-Prosekuzzjoni, imma meta tkun għamlet prova prima facie, allura l-prova kuntrarja tiġi riversata fuq id-difiża partikolarment meta si tratta ta’ prova which lies peculiarly within the knowledge of the accused. Fi kliem ieħor meta d-difiża tissoleva l-punt tan-non volontarjietà tal-istqarrija rilaxxjata mill-imputat f’tali każ hija tkun assumiet l-obbligu li tressaq provi suffiċjenti in sostenn tat-teżi tagħha iżda qatt ma jkun rikjest mill-istess imputat li l-provi minnu prodotti jistabbilixxu bla dubju raġonevoli t-teżi tiegħu. Kull m’għandu jagħmel l-imputat huwa li jressaq provi suffiċjenti biex jiġġenera dubju raġonevoli fil-verżjoni mogħtija mill-Prosekuzzjoni, f’liema każ imbagħad l-oneru li jinnewtralizza dan id-dubju jinkombi fuq il-Prosekuzzjoni’. In the judgment in the names Il-Pulizija vs. Donald Vassallo et,53 the Court examined in detail the facts of the case in particular to see if there were any intrinsic elements of the statements of the accused that were missing and thus make it inadmissible. This was done on the basis that the accused had stated that he had released his statement when he was in a state of fear and under oppression. The appellant stated that he was under psychological pressure to make the statement. The Court felt that it had to examine certain details in particular, if this was the first time that the accused appellant had been arrested and if he had any other similar past experience. In addition, the Court took note of the way he answered the questions that were put to him, if he chose not to reply to any questions as he is entitled to and other similar 52 53
Decided by the Court of Criminal Appeal Vol XLII pg. 1061 per Judge William Harding. Decided by the Court of Criminal Appeal on the 30th April 1998 Appeal number 58/98
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circumstances, which could throw light on the alleged fact that he was taken over by fear. The Court, however, felt that the circumstances did not denote such a state of fear and thus rejected his plea to overturn the decision taken by the first court and declare the statement as in admissible. The question which arises in view of the above is whether it is the prosecution that has to prove that the statement was made according to law. It is a general principle at law that the prosecution cannot exhibit a statement of an accused person in the proceedings, as evidence unless it is shown by them that such a statement was made voluntarily, in the sense that it was not obtained by any of the conditions set out in Article 658 of the Criminal code, namely that there was no fear or prejudice or hope or advantage exercised by the person in authority in obtaining such a statement. If the admissibility of the statement is in dispute, the issue has to be decided either by the magistrate hearing the case of if the accused is going to appear before a jury then such matter has to be determined by the trial judge before the jury is so appointed and this in the preliminary stage when the preliminary exceptions are being addressed. As stated in the British leading case R vs Thompson,54 the prosecution bears the legal burden of proving beyond reasonable doubt that the confession is voluntary if it fails to prove its voluntariness, then the statement is declared inadmissible.55 This position seems to be the same in the United Kingdom, as outlined in the leading case in the names Ibrahim vs The King56 delivered by Lord Sumner: ‘It has long been established as a positive rule of English criminal law, that no statement by an accused is admissible in evidence against him unless it is shown by the prosecution to have been a voluntary statement, in the sense that it has not been obtained from him either by fear or prejudice or hope of advantage exercised or held out by a person in authority or by aggression’. The twin goals of the Confessions Rule are the following: i. Protecting rights of accused. 54 R Vs Thompson (1893) 2 QB 12 CCR 55 Vide also in this vein Il-Pulizija vs Michael Carter decided by the Courts of Magistrates as a Court of Criminal Judicature on the 23rd April, 2001 56 (1914) A.C. 599 (P.C.), at p. 609:
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ii. Without unduly limiting society’s need to investigate and solve crimes. In Canada, before a statement (made by an accused to a person in authority) can be used for any purpose at trial, the Confessions Rule requires the Crown to prove beyond a reasonable doubt that the statement was made voluntarily. Historically, the two rationales for the voluntariness rule were: i) To exclude unreliable confessions from evidence, and ii) To prevent prosecutorial agents from compelling selfincrimination from an accused. This rule was reinforced in by the Supreme Court of Canada in R. vs. Oickle.57 It is crucial to keep in mind that a focal component of the voluntariness inquiry identified in the Oickle case is the operating mind test. Confessions are involuntary when they are extracted from suspects who are not in possession of a contriving mind in the sense that they do not know what they are saying or that they are saying it to police who may use it against them. Confessions from injured or hypnotised suspects, for example, can be excluded on this basis. The Operating Mind Doctrine requires that the accused knows what he is saying and what is being uttered by him may be subsequently used to his detriment. Like oppression, the Operating Mind Doctrine should not be understood as a discrete inquiry completely divorced from the rest of the confessions rule. The Operating Mind Doctrine is just one application of the general rule that involuntary confessions are inadmissible. This judgement accentuated a contextual approach and listed the following captions to describe the more common scenarios that decrease the voluntariness of confessions: (a) Threats or promises, (b) Oppression, (c) Operating mind, and (d) Police trickery that would shock the community. 57
2008 SCC 38 (Oickle).
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Voluntariness is the barometer of the confessions rule. Whether the worry is threats or promises, the lack of an operating mind or police trickery that unfairly denies the accused’s right to silence, this Court’s case law has consistently protected the accused from having involuntary confessions introduced into evidence. If a confession is involuntary for any of these reasons, it is inadmissible. This will be further elucidated upon in the following cases.
7. Can any person make a confession? Our law provides that every person of sound mind is admissible as witness, unless there are objections to his competency.58 The court shall explain to the witness the obligation of the oath if, on account of his age or for other reasons, it appears doubtful whether he understands such obligation; and if, notwithstanding such explanation, the court shall deem it necessary that the witness, before giving evidence, be further instructed as to the consequences of false testimony, the court may, if it considers the deposition of such witness to be important for the ends of justice, adjourn the trial to another day, and, should the case be before the Criminal Court, discharge the jury.59 No person shall be excluded from giving testimony for want of any particular age and it shall be sufficient that the court be satisfied that the witness, though not of age, understands that it is wrong to give false testimony.60 A witness professing the Roman Catholic faith shall be sworn according to the custom of those who belong to that faith; and a witness not professing that faith shall be sworn in the manner, which he considers most binding on his conscience. ‘If it shall be necessary to examine any person who either through infirmity or old age is unable to appear in court, such person shall be examined by the court, or, if the court so orders, by a member of the court, in the place of his or her abode.’61 With regards to the taking of evidence of children under age, it is to be noted that a person is considered to be of age when he is eighteen years 58 59 60 61
Criminal Code (Chapter 9 of the Laws of Malta), Section 629(1) Criminal Code (Chapter 9 of the Laws of Malta), Section 629(2) Ibid, Section 630 Ibid, Section 647(1)
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old for the purposes of criminal proceedings. The law does not place any imposition on the court for hearing any person who has not as yet celebrated his eighteenth birthday, but it rests upon the court to assess the situation. It must, first of all, explain to the witness the importance of the oath and the repercussions that may ensue should the witness be found guilty of perjury. Once the court gives the oath and is convinced that the witness though under age is understanding the severity or otherwise of his deposition, it can then proceed to take his evidence under oath. The law states that ‘no person shall be excluded from giving testimony for want of any particular age; it shall be sufficient that the court be satisfied that the witness, though not of age, understands that it is wrong to give false testimony’.62 In the Criminal Code, we have no provision with regards to whether persons who have a mental disability can testify. However, it is a general principle that should such a person be in control of his intellectual and volitional powers and understand the importance of saying the truth then he would be considered as an admissible witness. However, in the United Kingdom the situation is a bit different in that there is a statutory provision for such a circumstance. The PACE Act 1984 provides additional safeguards for those who suffer from a ‘mental handicap’. This is defined as being in ‘a state of arrested or incomplete development of mind which includes significant impairment of intelligence and social functioning’.63 In the United Kingdom, where the case against an accused depends fully or in part on a confession made by a person and the court is satisfied that a) he is mentally handicapped; and b) that the confession was not made in the presence of an independent person64, the judge must warn the jury that there is a special need for caution before convicting in assurance on the basis of the confession.65 The purpose for such a provision is so that there is additional protection for a mentally handicapped66 accused. For certain, whether a person is mentally handicapped within this definition each case should be decided on its own facts rather than figures from intelligent tests in some other case.67 The jury ought to be very careful prior to convicting such a 62 Ibid, Section 630 63 Section 77 of the UK PACE Act. 64 ‘Independent person’ does not include a police officer or a person employed for or engaged on police purposes. Section 77(3) of the PACE Act 1984. 65 Section 77(1) of the PACE Act 1984. 66 ‘mentally handicapped’ in relation to a person, signifies that he is in a state of arrested or incomplete development of mind which includes significant impairment of intelligence and social functioning. Section 77(3) of the PACE Act 1984. 67 Kenny, The Times (27th July, 1993).
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person based on his own confession, if such confession was not made in the presence of an ‘independent person’ and secondly, if there is no or little other evidence available against him. The Judge should warn the Jury of the special need for caution prior to convicting.68 The wording of the caution is a matter left in the discretion of the Judge but he must explain the reasons for the need of the caution, particularly that the person is mentally handicapped and that the statement was not given in the presence of an ‘independent person’. In the Lamont69 case, the Court of Appeal quashed a conviction in a case where the warning was not given and said that such a warning was an important part for an essential summing up.
8. Are all confession admissible, or can the Court use its discretion in accepting a confession as evidence? The subject of inadmissibility of statements as valid evidence against the person releasing them has been discussed in detail, many a time and more so with the hope of controlling and reducing abusive methods used by the police rather than from the point of view of assessing whether really and truly what the accused is alleging is true. This in consonance with what is provided in the book Criminal Evidence by Cross and Williams that ‘certain standards of the police practices have to be observed and confessions obtained in violation of such standards are to be rejected’. Unreliable confessions were given a broad interpretation by the Court of Appeal in R v Fulling70. This included: • Confessions obtained as the result of an inducement - for example a promise of bail or a promise that a prosecution would not arise from the confession; • Hostile and aggressive questioning; • Failure to record accurately what was said; • Failure to caution; 68 69 70
Section 77(2) of the PACE Act 1984. (1989) Crim L.R 813 (1987) 2 All E.R. 65
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Criminal Law • Failure to provide an appropriate adult where one is required; • Failure to comply with the Code of Practice in relation to the detention of the accused - for example a failure to allow sufficient rest prior to an interview; • Failure of the Defence Solicitor or Appropriate Adult to act properly - for example by making interjections during interview, which are hostile to the defendant. It is important that prosecutors take into consideration whether confessions can be adduced to be reliable or not by the courts. In Malta, the courts do not have much discretion as to whether to question the validity or otherwise of a statement provided it was released according to law. However, the Judge does have discretion with regards to whether a witness should give evidence or not. A very relevant matter to the issue under examination is whether what a suspect says under interrogation casually to a person in authority is tantamount to a statement and could such evidence be used against that same suspect in all cases. Namely, does all a suspect say orally to a person in authority amount to a confession and could the defense ask for such information to be disregarded? There is no doubt that all that a suspect states to a person does not amount to hear say but to res gestae and thus is considered as admissible evidence. However, a corollary to this is that all hearsay evidence is inadmissible in other words all that a witness states which is based on facts or evidence told to him by a third party amounts to hearsay evidence and thus inadmissible and cannot be used as evidence to prove the guilt of an accused person. This theory was embraced in the judgments in the names Il-Pulizija vs. Miriam Sant71, Il-Pulizija vs. Michael Ciappara72 and Il-Pulizija vs. Hassan Khaled.73 This issue was further taken up in the judgment in the names Il-Pulizija vs. Omar Psaila.74 The Court held that:71 72 73 74 535/2012
Decided by the Court of Criminal Appeal on the 22nd October 2001. Decided by the Court of Criminal Appeal on the 4th July 2002. Decided by the Court of Criminal Appeal on the 5th June 2003. Decided by the Court of Criminal Appeal on the 20th June 2016 Application number
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“L-artikolu 658 tal-Kap 9 huwa importanti ferm għax jista’ jintuża f’każ li persuna ma tkun wieġbet għall-ebda mistoqsija fl-istqarrija bil-miktub iżda tkun tkellmet dwar l-għemil li wettqet. Dak li jgħid imputat lil xi persuna oħra jista’ jittieħed bħala prova u ma jitqiesx bħala hearsay.” In this case, the appellant was a twenty-seven-year-old when he was spoken to by the police and thus was not a minor. Apart from all this, it was not the first time that the accused had an encounter with the police as could be evidenced by his police conduct sheet. In addition, the appellant was given a caution before he spoke up and thus, it did not appear that the appellant was in any way constrained to speak up. So much so that when he made his statement, he gave no details with regards the accusations in question even when asked directly with regards to what he himself had stated prior to the taking of the statement. He did not even sign the statement. In this case, the police had sent for Mario Galea who had told them that the accused was driving the car they were inquiring about. Thus, the accused person was the ‘suspect’. It is true that he was not given his right to legal assistance, however, when he went to the police he went voluntarily and was not under arrest. It has to be noted that as a suspect whilst interrogated by the police, the accused was not given any caution, and thus what was told to the police without the caution could not be taken into consideration not on the premise that no caution was given, but due to the fact that he was not given the right to legal assistance and thus what was said to the police could not be taken into consideration. This was in line with the judgment in the names Ir-Repubblika ta’ Malta vs. Alfred Camilleri75. Thus, the Court decided that it must ignore what the accused appellant said to the police officer before the statement was taken. Alike, the Court made reference to another two judgments wherein the same stand was taken in particular Anthony Taliana vs. l-Kummissarju tal-Pulizija u l-Avukat Generali76 and Charles Steven Muscat vs. l-Avukat Ġenerali77. In the former case, the defence had asked so that the reports of experts nominated in the case primarily of the scientist Godwin Sammut 75 Decided by the Constitutional Court on the 20th June 2014. 76 Decided by the Constitutional Court on the 6th February 2015 Application Number 35/2012/1 77 Decided by the Constitutional Court on the 8th October 2012 Application Number 38/2012/1
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and of the medico-legal Doctor Dr Mario Scerri are withdrawn from the proceedings since they were based on what the accused had told them. The Court, however, concluded that it was not ordering the withdrawal of anything that the accused said to these experts as long as what what concluded by them was based on objective and factual observations. However, if what was concluded by them was based solely on the evidence given by the accused in the absence of his lawyer, then the Court should give importance to such a factor. The Court concluded by stating that: ‘din il-qorti hija tal-fehma illi, dak mistqarr mill-attur m’għandux jitneħħa mill-inkartament iżda, billi dak mistqarr ingħad f’ċirkostanzi illi fihom ma tħarisx għal kollox il-jedd tal-attur taħt l-art. 6 tal-Konvenzjoni, min għandu jiddeċiedi fuq il-ħtija tal-attur m’għandux jieħu qies ta’ dak mistqarr bħala prova tal-kontenut tagħha għall-finijiet ta’ ħtija o meno tal-attur iżda jista’ jieħu qies tiegħu għall-finijiet ta’ kontroll u kredibilità ta’ xhieda.’ In a judgment in the names Ir-Repubblika ta’ Malta kontra Sergii Nykytiuk,78 the Court held that the position should be such that the statement should remain forming part of the proceedings and given to the Jury to decide upon though to decide upon it with regards to its probative value if such a statement is not a one in terms of the law. It held that: ‘wara li għamlet referenza għal Sentenzi mogħtija millQorti Kostituzzjonali ddikkjarat li l-linja gwida għandha tkun li l-istatement jibqa’ fil-Proċess bħala parti mill-provi u mogħti wkoll lill-ġurija jekk mitlub, u spetta lil min irid jiġġudika l-fatti jekk bħala fatt l-akkużat kienx jew ma kienx assistit minn avukat fil-bidunett tal-arrest tiegħu. Jekk ma kienx, allura dan ikollu konsegwenzi negattivi fuq l-istatement u min għandu dritt jiġġudika fuq il-fatti, jigi indirizzat f’dan is-sens. Però l-istatement m’għandux «a priori» jigi sfilzat mill-Proċess għax b’hekk ikun qed jigi uzurpat dritt ta’ konsiderazzjoni li jispetta biss lil min ikun qed jiġġudika l-fatti’. The author, however, does not agree with this line of thought as expressed in the previous judgment because she feels that whenever there is a breach of a fundamental right such a matter should not be decided upon by jurors. 78
Decided by the Criminal Court on the 2nd September 2011
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In this latter case there was no contestation by the Attorney General that the statement of the accused was taken when the accused was not assisted by a lawyer and without the accused having been given such a right. Thus, the decision of the Criminal Court means that the jurors are going to be asked to decide on what is obvious and on what is not in contestation, but at the same time are going to be made aware of some evidence which was taken abusively and in breach to the principle of a fair trial to which the accused is entitled to. Such a situation is pitiful and thus the law should be addressed immediately in this regard so as to avoid potential further breaches to the rights of the accused as stated above. In this way, the jurors are not asked to decide on a question relating to law but conversely are going to be given direction from the deciding judge to express themselves on a legal issue. It held: ‘din il-Qorti żżid tirrileva illi mhuwiex il-każ illi kwistjoni dwar leżjonijiet ta’ drittijiet fondamentali sejra tkun deċiċa mill-ġurati. Kif qalet tajjeb il-Qorti Kriminali fis-sentenza tagħha, il-ġurati mhux sejrin jesprimu ruħhom dwar dritt izda sejrin jingħataw direzzjoni mill-imħallef togat dwar punti ta’ dritt inkluż dwar x’għandhom iqisu meta jiġu biex iqisu l-provi illi dwarhom huma jkunu jridu jagħtu deċiżjoni’. However, in two decrees given by the Court, namely il-Puliizja vs. Jonathan Cachia79 u Il-Pulizija vs. Emilio Cereale,80 the Court went a step forward in that it ordered that anything which the accused person said to other people in authority during the investigation should not be kept in the records of the case so as not to influence the deciding magistrate in his decision, and thus ordered that those documents namely the police reports to be withdrawn from the proceedings. Therefore, as illustrated from the above there seems to be no hard and fast rule as to whether inadmissible evidence should still form part of criminal trial or not. It depends on the presiding Judge. However, whether the evidence remains exhibited or not, the direction by the court is to disregard evidence which is not admissible even though still part of the proceedings. This direction certainly needs legislative clarification so that there may be legal certainty. 79 Decided by the Courts of Magistrates as a Court of Criminal Judicature on the 16th November 2011. 80 Decided by the Courts of Magistrates as a Court of Criminal Judicature on the 6th October 2011.
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9. The statement of a co-accused does not affect an accused person Another important issue regarding the giving of a statement is whether the statement of a person affects a co-accused. The law81 as already outlined provides that ‘a confession shall not be evidence except against the person making the same, and shall not operate to the prejudice of any other person’. Howbeit, in those cases where the only witness against the accused for any offence in any trial by jury is solely an accomplice, the court shall give a direction to the jury to deal with the evidence of the witness with caution before embracing it in order to convict the accused.82 The evidence of persons who are co-accused for the same charge only has a bearing on the accused himself who has chosen to testify voluntarily. Such evidence will not affect the guilt or innocence of the co-accused and thus it can be said that a co-accused is not a competent or compellable witness vis-à-vis the other co-accused. However, once and if the case of the co-accused becomes a res judicata (perhaps by means of an early admission on behalf of one the co-accused, or in those cases where the Attorney General issues a nulle prosequi in regard to one of the accused), then in regards to the case of the co-accused whose case would still be on going the evidence of that co-accused (whose case would have become a res judicata) is admissible and such a witness becomes both a competent and a compellable witness.83 In the recent judgment in the names Repubblika ta’ Malta vs. Rio Micallef et,84 the defence had asked the Court not to take cognisance of the statement released by co-accused and therefore asked to have it withdrawn from the proceedings on the basis that such statement was taken in breach of Sections 636(a) and (b) of the Criminal Code and in line with the reasoning 81 Criminal Code (Chapter 9 of the Laws of Malta), Section 661. 82 Ibid, Section 639(3) 83 Vide Ir-Repubblika ta’ Malta vs. Omissis u Ian Farrugia Decree given by the Criminal Court on 22nd December 1998. Vide also Il-Pulizija vs. Nikolai Borg Olivier’ decided by the Criminal Court of Appeal on 10th May 1999, Il-Pulizija vs. Patrick Mangion decided by the Courts of Magistrates as a Court of Criminal Judicature on the 21st November 2014, Il-Pulizija vs. Victor Gauci decided by the Court of Criminal Appeal on the 26th January 2001. 84 Decided by the Criminal Court on the 11th February 2015 Application Number 14/2015.
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of recent judgments, wherein it was held that the evidence of a co-accused constitutes no evidence in regard to the accused, and thus in principle cannot be considered as admissible. This reasoning is desumed a contrario sensu from what is provided for in Section 636(b) of the Criminal Code in the sense that a co-accused becomes a competent witness in relation to an accused person, only after the criminal case he has pending in his regard becomes a res judicata. In the case under examination, the criminal proceedings were still ongoing in regard to the witnesses and therefore the aforesaid rule should have applied in that their evidence against the accused is not admissible. The Court upheld the plea of the defence and added that it had already expressed itself in this manner in a number of judgments.85 On a consonant note, in the case in the names Repubblika ta’ Malta vs. Matthew Bajada,86 the accused was charged with trafficking of drugs. The defence requested that the statement of a particular witness Joseph Camilleri together with his sworn evidence given before an inquiring Magistrate should be withdrawn from the proceedings that were being held against the accused Bajada. The defence based its request perhaps ‘ex abundantia cautela’ in view of what is provided for in Section 636, which provides in which circumstances an accused person can give evidence in relation to a co-accused. The prosecution, on the other hand, explained that the proceedings in regard to this witness Camilleri were still ongoing and this person was summoned to appear as a witness in the appointed Jury of Bajada. The prosecution held that the purpose of the statement in the proceedings is simply so that the prosecution could control the evidence that would be given by the witness should he take the stand and testify and once the case in his regard is over and forms a res judicata then he would be free to give his evidence. The Court, rightly so, made reference to the law which provides that ‘where the only witness against the accused for any offence in any trial by jury is an accomplice, the Court shall give a direction to the jury to approach 85 Sua Maesta r-Re vs. Carmeo Cutajar ed altri, Decided on the 18th January 1927, IlPulizija vs. Toni Pisani decided on the 11th November 1944, Il-Maestà tiegħu r-Re vs. Karmenu Vella decided on the 3rd December 1947, The Police vs. Alfred W. Luck et decided on the 25th April 1949, Ir-Repubblika ta’ Malta vs. Faustino Barbara decided on the 19th January 1996, Il-Pulizija vs. Nasher Eshtewi Be Hag et decided on the 2nd February 1996, Il-Pulizija vs. Carmelo Camilleri u Theresa Agius op cit Repubblika ta’ Malta vs. Domenic Zammit et decided on the 31st July 1998 and Ir-Repubblika ta’ Malta vs. Ian Farrugia decided on the 22nd December 1998 by the Criminal Court of Appeal. 86 Decided by the Criminal Court on the 19th September 2010 Application Number 45/2010.
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the evidence of the witness with caution before relying on it in order to convict the accused’. However, at the same time made reference to the Drugs Ordinance which further provides that ‘notwithstanding the provisions of Article 639(3) of the Criminal Code where a person has purchased or otherwise obtained or acquired a drug contrary to the provisions of this Ordinance , the evidence of such person in proceedings against the person from whom he shall have purchased, obtained or acquired the drug, shall not require to be corroborated by other circumstances’.87 The Drug Ordinance also states that ‘notwithstanding the provisions of Article 66188 of the Criminal Code, where a person is involved in any offence against this Ordinance, any statement made by such person and confirmed on oath before a magistrate and any evidence given by such person before any court may be received in evidence against any other person charged with an offence against the said Ordinance’. Therefore, a priori, this provision of the law seems to imply that there is an exception to the general rule that the statement of a co-accused cannot be of any gain or prejudice to the accused person. In these circumstances, when a person is charged with crimes emanating from the Drug Ordinance or the Medical and Kindred Profession Ordinance, the statement of an accomplice can be exhibited in the proceedings of the principal. However, once summoned to confirm this statement on oath, ironically, he can choose not to give evidence on the premise that he may incriminate himself. So really, the validity of such a provision has its limitations. It only seems to find solace if the proceedings of the accomplice or co-accused are res judicata when in such case there is no possibility of incrimination.89 The Court in the Bajada case concluded that the position regarding evidence of a co-accused is regulated by Article 636(b) of the Criminal Code as interpreted over the years by the Maltese Courts which means that first the proceedings in relation to the witness have to be final before he can be asked to testify before the accused. With regards to the presenting of the statement of the witness of a co-accused person in the proceedings of an accused person this will only have effect for the purpose of controlling the witness should he decide to testify. On the other hand, the statements 87 Dangerous Drugs Ordinance (Chapter 101 of the Laws of Malta), Section 30 88 Section 661 of the Criminal Code of Malta. 89 Vide also Ir-Repubblika ta’ Malta vs. Charles Paul Muscat decided by the Court of Criminal Appeal (Superior jurisdiction) on the 13th October 2016. Bill of Indictment 17/2015
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that were released in terms of the Drugs Ordinance90 and the Medical and Kindred Profession Ordinance91 will only have effect in the opportune moment, in other words when the trial of the person who released them is over and is a res judicata. In a congruent judgment in the names Ir-Repubblika ta’ Malta vs. Carmelo Maria Grazia sive Karl Ebejer,92 the accused was objecting to the statement of a co-accused remaining in the acts. The Criminal Court held that Mark Meli was originally indicated as a witness. It held that according to custom, it is not usual that a statement is withdrawn from the proceedings and should remain part of the proceedings so that it may be used to control such a witness once he takes the stand, just in case such a witness like Mark Meli forgets something or contradicts part of his previous written testimony, and thus the prosecution would be able to be confronted with it, and thus who is to decide will be able to decide on the inconsistency of the witness should it arise. The accused, however, appealed this argument and stated that the statement of Mark Meli was only treated by the Criminal Court as a simple statement. It did not treat this statement as one of a person who was initially arraigned as a co-accused prior to the Attorney General asking for the separation of cases. He held that the statement was not intended to be used as a means of control as understood by the Court. Mark Meli did not remain a co-accused in the same proceedings as that of the accused appellant, and thus that evidence which was once presented in the proceedings, since it was of interest to the co-accused, should all be withdrawn in the current proceedings since they exclusively related to him and should not be left in the proceedings on the presupposition that they could be used as a method of control. The Appeal Court, however, concluded that: ‘ladarba Mark Meli m’għadux ko-akkużat, huwa ammissibbli bħala xhud fil-proċediment kontra l-appellant. Propju għax hu xhud ammissibbli, kwalsiasi stqarrija li seta’ għamel Mark Meli għandha tibqa’ tagħmel parti mill-atti tal-proċediment tal-lum għaliex tista’ sservi bħala kontroll fuq dak illi jixhed’. 90 Dangerous Drugs Ordinance (Chapter 101 of the Laws of Malta) 91 Medical and Kindred Profession Ordinance (Chapter 33 of the Laws of Malta) 92 Decided by the Court of Criminal Appeal on the 31st October 2013. Application number 30/2010.
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10. Must a caution be given prior to the taking of statement? This brings us to another interesting notion regarding statements in that whether the person ‘in authority’ is obliged to give caution prior to the taking of a statement and whether the absence of such a caution is tantamount to an illegal taking of a statement, and consequently affect the admissibility or otherwise of such statement. An interesting argument was brought up in the case Il-Pulizija vs. Francis Xavier Cuschieri,93 whereby the appellant asked for his statement to be considered as inadmissible because the investigating officer did not caution him prior to him making a statement. The appellant made reference to Article 494 of the Code of Practice for the Interrogation of Arrested Persons issued by the Commissioner of Police in terms of the Police Ordinance, whereby the investigating police is bound to admonish a suspected person to his right to remain silent, and that should such person utter a word, such word can be brought forward against her as evidence. This said article stipulates that such right is to be given to a person before any questions are asked. The appellant felt that such an obligation had a legal bearing on the prosecution. The latter, however, did not agree to such a submission and made reference to Section 658 of the criminal code and said that the only obligation on the prosecution is to make sure that the person under interrogation releases his statement voluntarily and that no threats, promises or favours are given from the investigating officer. The Court, in fact, embraced such argument and said that it was only bound to follow Section 658 of the criminal code to see that a statement was obtained according to law and that there was no incumbent need on the prosecution to give a caution to the suspected person. The author, however, states that for the last thirty or forty years, it has become customary for the investigating officer to give such a caution before asking any questions to a suspected person, in that such person has a right to remain silent and that whatever he states can be used as evidence in his regard, or alternatively that he has a right to remain silent should he think 93 Decided by the Court of Criminal Appeal on the 11th March 1999. Appeal Number 308/98 94 Code of Practice for the Interrogation of Arrested Person, Fourth Schedule to Chapter 164 of the Laws of Malta, Article 4.
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that he could incriminate himself when replying. This right is known as nemo debet prodere se ipsum95. Such right is also constitutionally recognised. The right to silence is not tantamount to a confession of guilt, although today, with the rule of inference, this right has been impinged upon.
11. Concluding remarks on the topic of confessions In conclusion, my article suggests for there to be less contestations in court with regards to the validity or otherwise of statements, and so for there to be less allegations directed at the investigating police, there should be some amendments to the current laws relating to the taking of a statement, and this in the name of transparency and for a better administration of justice to which the suspect and accused person is entitled to. 1. There should be a legislative provision placing an obligation on the interrogating police to give a caution to a person the moment he considers him as a ‘suspect’ the moment he is going to ask him questions relating to the commission of an offence. This would be beneficial both to the suspect in that it will be assuring his right to a fair trial in that he would incriminate himself less, and likewise the prosecution will be in a better place to sustain their credibility in that the statement released by the suspect/ accused was voluntary. 2. The law should provide guidelines that should be followed in those instances where the suspect is suffering from a mental handicap. Possibly, should the police be made aware of such mental disability of the suspect then he is obliged to have him examined by a medical doctor prior to the interrogation and only upon direction given by the medical officer that the suspect is fit for interrogation that the interrogation continues. Also, such medical officer would have to certify the date of examination and that in his opinion the suspect is fit to be interrogated. Here again this would reduce abuse of police power in interrogating people who possibly can be vulnerable. 3. Similarly, when the suspect is of an advanced age say over 95
Nobody ought to be compelled to betray himself.
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eighty years of age the police should ask for the suspect to be examined medically in that such a person is not suffering from any mental condition of amnesia or so. This is being said due to the rule of inference that has been introduced in the legal system here in Malta. This being said, should an elderly person refuse to speak up on the pretext that she cannot remember and thus choose to remain silent an inference may set in if it meats the conditions. 4. Also, the law should provide that when the suspect is a minor he should not be investigated in the absence of a parent or leal guardian. If the offender is a parent, then the minor can choose to have any other adult of his choice to assist him/her throughout the interrogation to make him/he feel more comfortable and less anxious. 5. The definition of ‘confession’ provided for in Section 658 of the Criminal Code should once again be amended so as to dismiss any confession obtained by fraud, oppression or illegal means and not have it limited with the words therein mentioned. Since the idea should be that any wrong-doing carried out by the person in authority should be condemned, and also, there should be included a provision that states that should a statement not be in line with the law then such confession is not admissible and should be discarded once and for all. It is not enough that case law provides that no importance is to be given to such statements, but the law should provide that such statements should be withdrawn from the proceedings so as not to influence any party. 6. Likewise, there should also be a new offence in the law on the basis of the above in that should it result to the court that the ‘person in authority’ who investigated the suspect was wrong in his ways and induced a statement in conditions which were not inductive to the fair trial that an accused person is entitled to, then such person should be deemed to have committed an offence of abuse of power. This too would encourage more professionalism in the taking of statements and lead to a considerably less number of pleas in this regards and the 193
smoother running of Justice.
Charles Mercieca Prosecuting and Defending White-Collar Crime
Charles Mercieca was GħSL’s Marketing Officer and Vice-President during his fourth and fifth years at the University of Malta respectively. He graduated from the University of Malta with a Bachelor of Laws and a Master of Advocacy. He then pursued an LL.M in Criminal Law and Criminal Justice with a special focus on white collar crime and money laundering at the University of Leeds. He has now been working as a criminal prosecutor at the Officer of the Attorney General for the past two years.
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1. Introduction
I
n this paper, the author examines the challenges created by the ambiguities of white-collar crime during the criminal process,1 specifically, during the defence and prosecution of white-collar crime. The author focuses on critically analysing these challenges with the purpose of suggesting the best practices developed by professional prosecutors, defence lawyers and judges in light of the ambiguity exhibited in a white-collar case.2 The first substantive part of the essay (section 1.2) centres around a critical analysis of the challenges faced by prosecutors in white-collar investigations and cases. The author examines the elements considered by a prosecutor in making the decision to investigate and subsequently the decision to indict.3 As opposed to conventional crime, the investigatory process of white-collar crime, plays a crucial role in such cases as the process determines the outcome of white-collar cases.4 In the second substantive section (section 1.3), the author examines the effects of the legal ambiguity of white-collar crime on the process of defending a white-collar defendant. As opposed to conventional crime attorneys, where the essential part of litigation takes place during the trial, the bulk of white-collar defence takes place during the investigatory pre-trial period.5 This shall also help to underscore the challenges and differences between white-collar crime defence and street crime defence.
1 The criminal process shall refer to the stages during which the prosecuting authority decides to investigate an individual or a corporation and runs through the indictment and trial. 2 For a general introduction on the challenges of prosecuting, defending and adjudicating white-collar crime, see David Friedrichs, Trusted Criminals: White Collar Crime in Contemporary Society (4th edn, Wadsworth, Cengage Learning 2010) ch. 11. 3 Due to possible variations of the definition of an indictment and how it is issued in different jurisdictions, the term for the purposes of this essay shall refer to the formal process of charging a corporate entity or individual. Indictments in the United States are sometimes issued by a Grand Jury; however, in the continent an indictment is more commonly issued by the public prosecutor. For more see David Friedrichs, Trusted Criminals: White Collar Crime in Contemporary Society (4th edn, Wadsworth, Cengage Learning 2010) 319. 4 David Friedrichs, Trusted Criminals: White Collar Crime in Contemporary Society (4th edn, Wadsworth, Cengage Learning 2010) 309. 5 See Kenneth Mann, Defending White Collar Crime: A Portrait of Attorneys at Work (New Haven: Yale University Press, 1985).
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2. Prosecuting White-Collar Crime 2.1 General prosecutorial challenges in investigating white-collar crime White-collar prosecutors face two primary challenges to a successful investigation of a white-collar offence. Namely, these challenges concern the resources available to the prosecutor and the standard of proof required of the prosecutor in criminal trials. First and foremost, prosecutorial agencies often experience a significant lack of resources. Primarily owing to the defendant’s deep pockets, prosecutors often face highly experienced defence lawyers who are devoted to their client’s exculpation as opposed to more modestly paid public defendants in conventional crime cases.6 However, the imbalance of resources is not only exclusive to the defendant’s finances. More specifically, resources include manpower and expertise to handle the common, highly complex and drawn out white-collar case.7 Prosecutorial agencies may lack specialist units and highly trained investigators who lack the tenacity for protracted litigation.8 On the other hand, the defence counsel is known to take advantage of the prosecution’s limited resources by relentlessly seeking conferences with prosecutors and litigating subpoenas in a bid to delay investigations as much as possible.9 These delay tactics are not unique to white-collar cases; however, they may be deadly for a white-collar prosecution.10 Passage of long periods of time may see a change in public prosecutors11, a cooling down of public impetus for “justice” and earn the defaulting corporation enough time to either remedy the wrong or, more significantly, cover it up12. However, delays and drawn out investigations are not always related to counsel’s strategies. White-collar investigations usually involve mammoth amounts of 6 Walter Pavlo, ‘The High Cost Of Mounting A White-Collar Criminal Defense’ (Forbes, 30 May 2013) <https://www.forbes.com/sites/walterpavlo/2013/05/30/the-high-cost-ofmounting-a-white-collar-criminal-defense/#1667ed4910bd> accessed 2 June 2018. 7 Lucian E. Dervan and Ellen S. Podgor, ‘Investigating and Prosecuting White-Collar Criminals’ in Shanna R. Van Slyke, Michael L. Benson, and Francis T. Cullen, The Oxford Handbook of White-Collar Crime (Oxford University Press 2016) 561. 8 John L. Masters, ‘Fraud and Money Laundering: The Evolving Criminalization of Corporate Non-Compliance’ (2008) 11(2) Journal of Money Laundering Control 103, 111. 9 Herbert Edelhertz, The Nature, Impact and Prosecution of White-Collar Crime (National Institute of Law Enforcement and Criminal Justice 1970) 45. 10 ibid 49. 11 ibid 46. 12 Dervan and Podgor (n 7) 565.
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evidence as opposed to the usually manageable quantities for conventional crimes.13 It is worth noting, that despite of (or due to) the length of whitecollar investigations, defence attorneys have increasingly started to adopt a strategy of cooperation in white-collar investigations.14 Cooperation may assist to expedite investigations by explaining the corporation’s behaviour, thus avoiding prosecution.15 The second challenge is for the prosecutor to obtain the standard of proof which is ‘beyond reasonable doubt’.16 In white-collar crime cases, the standard of proof requires the prosecutor to go beyond simply proving the subsistence of harm but also presenting evidence which can easily be understood by the jurors.17 The problem is accentuated because the essence of white-collar cases is usually the mens rea of the defendant, and in the often ambiguous white-collar crime the mens rea is the hardest component to prove.18 To this effect, Herbert Edelhertz sustains that: ‘If five manufacturers equally raise their prices within a one week period, there will be no antitrust violation if they did so independently and without collusive communications or agreements, but there will be a criminal violation if their actions did involve such communications and agreements. The basic issue of criminal intent thus would depend on inferences or actual proof of collusive agreements, even though there would be no problem of proof with respect to the simultaneous price rise.’19 On the other hand, a lower standard of proof is required in civil proceedings which makes civil litigation a compelling alternative for prosecuting white-collar offences.20 The lower burden of proof in civil proceedings affords the prosecutor a better chance at successfully resolving a white-collar case while ensuring that financial 13 Randall Eliason, ‘Why White Collar Investigates take so Long’ (Sidebars, 21 December 2017) <https://sidebarsblog.com/why-white-collar-investigations-take-so-long/> accessed 2 June 2018. 14 Pamela H. Bucy, Elizabeth P. Formby, Marc S. Raspanti, Kathryn E. Rooney, ‘Why Do They Do It?: The Motives, Mores, and Character of White Collar Criminals’ (2012) 82(2) St John’s Law Review 401, 433. 15 Mann (n 5) 85. 16 Dervan and Podgor (n 7) 575. 17 Kurt Eichenwald, ‘White collar Defence Stance: The Criminal-less Crime’ (The New York Times 3 March 2002) <https://www.nytimes.com/2002/03/03/weekinreview/the-nationwhite-collar-defense-stance-the-criminal-less-crime.html> accessed 2 June 2018. 18 Francis T. Cullen, Gray Cavendar, William J. Maakestad, and Michael L. Benson, Corporate Crime under Attack: The Fight to Criminalize Business Violence (2nd edn, Anderson Press 2006). 19 Edelhertz (n 9) 47. 20 Dick Thornburgh, ‘The Dangers of Over-Criminalisation and the Need for Real Reform: The Dilemma of Artificial Entities and Crimes’ (2007) 44 American Criminal Law Review 1279.
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penalties (equivalent, if not more, to criminal monetary penalties) are still imposed on the defaulting party.21
2.2 Challenges in the Detection, Investigation and Indictment of WhiteCollar Crime The success of a white-collar crime prosecution primarily depends on the quality of evidence gathered during the investigatory period and a welldefined bill of indictment.22 As is in the case for conventional crime, the impetus for the authorities to investigate and prosecute white-collar crime fundamentally depends on the prosecutor’s ability to detect the offence.23 The detection of conventional crime is traditionally based on the victim’s complaint. However, since the victim of a white-collar offence often remains unidentified, the detection of white-collar crime is significantly hampered.24 The principal channels through which white-collar crimes are discovered are: whistleblowing,25 a corporation’s internal reporting structures26, and compliance agencies which actively search for violations27. The obscure identity of the victim of white-collar crime has further implications for the detection of white-collar crime. Through their ability to tender witness evidence, victims play a key role in the prosecution of an offence.28 However, because the victims of white-collar crime often remain unidentified, the prosecuting authority suffers a significant setback to the collection of evidence and, by extension, overcoming the burden of proof. The prosecution compensates for these lacunae by adopting intrusive legal tools such as 21 Kenneth Mann, ‘Punitive Civil Sanctions: The Middle Ground Between Criminal and Civil law’ (1992) 101 Yale Law Review 1795. 22 Edelhertz (n 9) 43 - 44. 23 It shall be assumed that the public prosecutor is the principal agent in the investigation and collection of evidence for trial. Some jurisdictions may have governmental Financial Investigatory Units who work in conjunction with the public prosecutor to investigate and prosecute white collar offences. 24 Dervan and Podgor (n 7) 561. 25 Lucian E. Dervan, ‘Responding to Potential Employee Misconduct in the Age of the Whistleblower: Foreseeing and Avoiding Hidden Dangers’ (2008) 3 Bloomberg Corporate Law Journal 670. 26 Philip A. Wellner, ‘Effective Compliance Programs and Corporate Criminal Prosecutions’ (2005) 27 Cardozo Law Review 497. 27 Edelhertz (n 9) 23. 28 Stuart L. Hills, Crime Power and Morality The Criminal Law Process in the United States (Chandler Publications 1971) 10; see also Edelhertz (n 9) 24.
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search warrants and subpoenas29 in an effort to learn the defence’s strategic position and control what information the defence has access to.30 Mann, in his study of white-collar investigations,31 recorded a defence attorney admitting that: ‘A lot of white-collar investigations are not all that specific…a lot of them are really in the area of hunting for the needle in the haystack until they [the prosecuting agent] really hit on something’32 This observation is critical because government fishing expeditions, especially if unfounded, may wreak unrepairable harm on a corporation’s reputation. Thus, it is advisable that both individuals and corporations retain legal counsel well versed in white-collar crime compliance.33 What motivates a prosecutor to investigate white-collar crime is less obvious than that for conventional crime. Some motivators consist of victim outrage, political influence and resources.34 A study which interviewed over twenty-eight defence attorneys concluded that prosecutors seem to be mostly motivated from the publicity and media attention of a white-collar offence case rather than other factors.35 The same study investigated what motivates public prosecutors to make the decision to prosecute white-collar crime. Nearly forty-one percent of former prosecutors interviewed agreed that when deciding whether to prosecute what matters is the pervasiveness of the illegal conduct, the type of the harm and the extent of the harm.36 Prosecutors also considered the possibility of conviction, involvement of upper management, and the effect of the harm on innocent affiliates.37 These findings are consistent with the Principles of Federal Prosecution of Business Organisations38 which sustain nine factors39 for prosecutors to consider in deciding whether to prosecute a corporation with a criminal offence. The principles focus on inter alia: the seriousness 29 Peter J. Henning, ‘What a Search Warrant Means’ (The New York Times, 23 November 2010) <https://dealbook.nytimes.com/2010/11/23/what-a-search-warrant-means/> accessed 2 June 2018. 30 Mann (n 5) 79. 31 Ibid part II. 32 ibid 80. 33 Robert Creamer, ‘Criminal Law Concerns for Civil Lawyers’ (2005) 52 Federal Lawyer 34. 34 Edelhertz (n 9 42. 35 ibid 418. 36 ibid. 37 ibid. 38 United States Department of Justice, ‘U.S. Attorney’s Manual’ (1997) s.928.00. 39 For the nine factors see United States Department of Justice, ‘U.S. Attorney’s Manual’ (1997) s.9-28.300.
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and risk of harm of the offence, the pervasiveness of the wrongdoing, the company’s cooperation and previous track record, and the effectives of the company’s compliance program.40 It can be immediately noticed that prosecutors and the Principles afford significant importance to the harm generated by an alleged offence. This can potentially present a stumbling block for the success of prosecutions due to the ambiguity of harm in whitecollar offences. Due to these difficulties, and the aforementioned prosecutorial challenges, only a small amount of white-collar criminal cases ultimately make it to the criminal court to stand trial.41 A large majority of white-collar cases are settled during the investigatory stage.42 In the US cooperation is usually achieved through mechanisms such as deferred prosecution agreements (DPA), or agreements for cooperation reflecting the guidelines established in inter alia the Holder and Thompson memos.43
3. Defending White-Collar Crime The nuances which have been seen to distinguish white-collar crime from street crime have resulted in significant developments in the way in which a white-collar case is defended. In this section, the author examines the role of the defence lawyer during two distinct stages of the criminal defence process: the pre-trial stage; and the trial stage. In the first place, the defensive strategies during the investigatory and pre-trial stage shall be examined;44 namely, the strategy of information control and plea bargaining during the investigatory stage. Secondly, the author puts forward substantive defences which are commonly advanced during a white-collar crime trial. It is important to note that this part of the paper shall only focus on the pre-trial and trial defence.45 40 See s. 9-28.400, s. 9-28.500, s. 9-28.600, s. 9-28.700 and s. 9-28.800 respectively. 41 Dervan and Podgor (n 7) 562. 42 Friedrichs (n 4) 309 and see Rodney Huff, Christian Desilets, and John Kane, The 2010 National Public Survey on White-Collar Crime (National White-Collar Crime Center 2010). 43 Friedrichs (n 4) 315. 44 The pre-trial stage shall be taken to encompass the series of events which take place from the moment where the investigating authority starts investigating an alleged white-collar crime till the moment that an indictment is levied against the corporate offender. 45 The author notes that ‘Defending White Collar Crime’ by Kenneth Mann is one of the, if not the, foremost works which pioneered the defence of white-collar crime. It is for this reason that the works of Mann shall be the foundation
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3.1 Investigation and Pre-Trial 3.1.1 Information control Information control and its importance to the success of a whitecollar defence cannot be overstated.46 The objectives of the white-collar defence lawyer during the investigation and pre-trial stage are twofold: to control potentially inculpatory information47 and to understand when to negotiate in order to avoid indictment.48 In sum, the overarching objective for the white-collar defence lawyer is to control what information the prosecution gains access to. Thereby ‘minimise[ing] damage at every single stage of the criminal justice process’49. Generally, the effectiveness of a white-collar attorney as opposed to a conventional blue-collar attorney is thought of in terms of the former’s ability to get hostile judges off cases, block hostile witnesses50 and engage in vigorous public relations campaigns in order to bolster their client’s reputation51. However, the role of a white-collar attorney has come to represent a more substantive portion of white-collar defence. Upon discovery of a governmental investigation into a person’s52 potential criminal conduct, it is imperative for the person to immediately consult with a white-collar criminal defence attorney.53 During the investigation and after identifying the relevant information sources the attorney has two principal methods to control information. 54 Mann dubs these two strategies as managerial for the paper’s critical examination of the defence of white-collar crime. Other critical academic works and studies shall be consulted in order to enhance and offer the most robust representation of the narrative involved in defending a white-collar case; see Mann (n 5). 46 See Mann (n 5) 7. 47 The ethical nuances surrounding this conduct is not in the scope of this paper and thus shall not be discussed in detail. For a critical analysis on the ethical significance of such see generally Mann (n 5) 240-250. 48 See Francis Lee Baily and Henry Rothblatt, Defending Business and White Collar Crimes: Federal and State (2nd edn, Lawyers Cooperative Publishing Co 1984); and Mann (n 5). 49 Friedrichs (n 4) 320. 50 Ralph Nader and Wesley Smith, No contest; corporate lawyers and the perversion of justice in America (New York: Random House1996). 51 Roger Magnuson, The White Collar Crime Explosion: How to Protect Yourself and Your Company from Prosecution (McGraw-Hill 1992). 52 “Person” shall be taken to refer to both legal and natural persons. 53 Dervan (n 25) 670. 54 Gottschalk identifies seventeen possible sources of information relevant to the white-collar attorney: interview, network, location, documents, observation, action, surveillance, communication control, physical material, internet, accusations, exchange, media, po-
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information control and adversarial information control.55 The former stratagem for information control focuses on instructing or persuading the holder of the inculpatory information to refrain from disclosing it to the investigating authority, while the latter focuses on controlling information through adversarial litigation in a court setting. Here the attorney challenges improperly obtained evidence or the admissibility of the same. Critically, however, the author posits that the strategies would have been more robust if they also included the attorney’s role in controlling information already obtained by the investigating authority and the process whereby the attorney attempts to persuade the investigating authority not to indict a client. Mann only considers these two modalities under a separate heading entitled ‘substantive legal argument’56 or ‘pre-charge litigation’57. For this reason, the author shall refer to the control of information which is within the client’s sphere of influence as ‘direct information control’. On the other hand, information which is not in the client’s sphere of influence and thus can be believed to be in the adversary’s sphere of influence shall be referred to as ‘indirect information control’. The rationale behind the words ‘direct’ and ‘indirect’ shall become evident in the following explanations. Direct information control techniques focus on the sources of information within the client’s spheres of control and how the white-collar attorney gains access to and control over that information.58 The importance of such was highlighted by defence attorneys in a study on white-collar cases.59 The interviewed attorneys stressed that direct information control techniques allow for the wrongdoing to be efficiently identified and addressed.60 Moreover, over half of the study participants agreed that a corporation should follow an internal compliance strategy consisting of internal investigations and international punishments which greatly expedite direct information control techniques.61 Importantly, a robust direct information control process can help the attorney to stay one step ahead of licing systems, employees, control authorities, and external data storage; see Peter Gottschalk, ‘White-Collar Crime Defense Strategies’ (2013) 4 Problems of Russian and International Law, 28. 55 Mann (n 5) 7. 56 Mann (n 5) 9. 57 ibid 193. 58 Such information often resides within the client’s internal infrastructural set up; see Dervan and Podgor (n 7) 567. 59 Pamela H. Bucy, Elizabeth P. Formby, Marc S. Raspanti, Kathryn E. Rooney, ‘Why Do They Do It?: The Motives, Mores, and Character of White Collar Criminals’ (2012) 82(2) St John’s Law Review 401. 60 ibid 420. 61 ibid 421.
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the investigatory authority and to identify potentially inculpatory evidence.62 The most immediate and usually accessible sources within the client’s sphere of influence are employees and documentary evidence.63 Both of these sources must be properly identified in order to gather information about the possible focus of the governmental investigation. First, employees will be interviewed to learn and gather information about the government inquiry. Generally, if a stance of non-cooperation is taken, employees or other potential witnesses may be instructed to refrain from disclosing information to the government.64 It is then important that for the sake of avoiding potential conflicts of interest, these interviews are carried out under attorney-client privilege. This practice was developed from the landmark case of Upjohn Co. v. United States65. The case established that prior to any interview, the employees are given an Upjohn warning. An Upjohn warning requires the attorney to clarify with the interviewed employee that the attorney-client privilege and the control of such belongs to the corporation not the individual employee.66 This masks the interview in a shroud of attorney-client privilege thus permitting the corporation the sole discretion to decide whether to protect the information or disclose it in the eventuality of cooperation with the authorities.67 Second, direct information control requires that documentary evidence is collected and interpreted.68 One of the most time-efficient methods used to achieve this often mammoth task is to circulate a documentsearch memorandum asking employees to provide the attorney with documents pertinent to the investigation.69 It is very important that during this process the attorney must ensure that not a single document is destroyed or tampered with. The objective and skill of the white-collar defence attorney is to suppress and control incriminating evidence and not destroy it. An additional challenge often faced by white-collar attorneys engaged in the process of direct information control is the interpretation of highly technical documentary evidence. For this reason, white-collar attorneys often retain an accountant in their retinue in order to assist them during the process 62 63 64 65 66 67 68 69
Friedrichs (n 4) 320. Dervan and Podgor (n 7) 567 - 568. Friedrichs (n 4) 320. 449 U.S. 383 (1981). Dervan (n 25) 677. ibid. ibid. Dervan and Podgor (n 7) 568.
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of direct information control.70 These accountants came to be known as Kovel accountants after the landmark case of Kovel v. the United States71. Importantly, the judgment established the Kovel doctrine which stipulates that the attorney-client privilege also extends to the communications and work of accountants assisting the attorney.72 The implications of the Kovel doctrine are several but the most important one is that through the Kovel accountant the attorney gains control over a client’s potentially sensitive documents and is able to protect them from the government’s investigation in ways which the client’s regular accountant would not be able to.73 Indirect information control techniques focus on the sources of information within the adversary’s sphere of control or those which neither party has control over.74 The attorney has three principal methods of gaining access to information held by the investigating agent. Information can be gathered by holding a meeting with the prosecuting agent, tracking the investigator and accessing public domain government documents.75 Firstly, a meeting with a government agent will present the attorney with an opportunity to inter alia gather facts about the investigation, to learn the prosecutor’s strategy, learn the identity of witnesses and evidence already collected, and prevent the disclosure of potentially incriminating evidence.76 According to Mann, the attorney can adopt one of three distinct styles during a meeting with the prosecuting authority.77 An attorney may either engage in passive listening, adversarial argument, or claim the intention to assist the prosecutor. Depending on the stage of the investigation and the attorney’s familiarity with the investigating prosecutor, each style ensures the attorney achieves access to information. Passive listening can achieve access to information especially when the attorney has no information at all about the case. However, when the client manages to supply the attorney with an adequate explanation of the events being investigated, the attorney may want to spark an adversarial argument with the prosecutor in order to provoke 70 Mann (n 5) 62. 71 296 F. 2d 918 (2d Cir. 1961). 72 For more about attorney-client privilege and third-party consultants see generally Michele DeStefano Beardeslee, ‘The Corporate Attorney-Client Privilege: Third-Rate Doctrine for Third-Party Consultants’ (2009) 62 Southern Methodist University Law Review 727. 73 Mann (n 5) 63. 74 These sources of information include information which may have already fallen into the investigator’s hands or information which is embedded; see Mann (n 5) 232-234. 75 Mann (n5) 79, 85, 94 respectively. 76 ibid 79. 77 ibid.
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more information.78 The second method of gaining access to information held by the government is by tracking the investigator’s movements thereby interviewing the same people and acquiring the same documents as the investigator. This method allows the attorney to remain appraised of places from which the investigator is drawing information, thus allowing the attorney to gain an invaluable insight into the prosecution’s investigation. Thirdly, the attorney can obtain information from government documents in the public domain. Albeit inconspicuous, this source of information can be a very good indication of the extent of the government’s knowledge and practices about the industry being investigated.79 Rigorous direct and indirect information control strategies will ensure the positive resolution of the investigation in favour of the whitecollar attorney’s client. The control of information affords the attorney insight into uncertainties in the prosecution’s case which if discovered may be used in exculpating a client. This is important as uncertainty in a criminal case is ‘enough to resolve the doubts in favour of the defendants’80.
4. Conclusion In conclusion, the author set out to critically examine the challenges presented by the ambiguity of white-collar crime within the context of the prosecution and defence of white-collar crime. The paper first presented the two general challenges faced by white-collar crime prosecutors: a limited resource pool and a high burden of proof. The implications of these two challenges resulted in a reduced amount of investigations being prosecuted and taken through the criminal process. Instead, cooperation and negotiation were seen to be given preference over all out litigation. In response to the challenge of the high burden of proof and in light of the other challenges, the author suggested that in some cases of business crime and tax evasion, civil remedies may be a better alternative to criminal prosecution. Further research on the adaptability of civil remedies to white-collar crime is strongly suggested. 78 White-collar attorneys interviewed by Mann claimed that refusing to cooperate and asking challenging questions such as: ‘I ask you how can you justify this to yourself without giving us a chance to examine the situation which you suspect constitutes crime?’ was an effective way of acquiring information form a prosecutor; see Mann (n 5) 81,83. 79 See Mann (n 5) 94. 80 United States v. Mersky 361 U.S. 431 (1960).
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The specific prosecutorial challenges of detection, investigation and indictment of white-collar crime were analysed in the succeeding section. The significantly low rates of detection of white-collar offences force prosecutorial agencies to diversify their investigatory techniques. This has implications on what motivates the prosecutor to initiate investigations into a defaulting entity. From an examination of a study interviewing prosecutors on what motivates white-collar crime prosecution and the Principles of Federal Prosecution of Business Organisations it was concluded that both the prosecutors and the Principles attribute a lot of weight to the harmfulness of the alleged white-collar offence. Critically, the author suggests that due to the ambiguity of harm in white-collar offences, prosecutions may be more effective if the emphasis is placed on a form of strict liability vis-à-vis a corporation’s compliance practices. The second section critically treated the white-collar attorney’s modus operandi during the investigatory stage, which was developed in response to the complexities of white-collar crime. The author posited two information control strategies which compliment those suggested by Mann. The strategy of direct information control and the strategy of indirect information control were critically analysed as two of the most important strategies available to a white-collar attorney. It was established that their most important function was to avoid indictment and minimise the harms of a criminal investigation for the client. It may be concluded that traditional criminal law procedures are not in harmony with white-collar criminal practice.
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Jessica-Ann Spiteri Confessions in a Court of Law
Jessica-Ann Spiteri has very recently graduated from the University of Malta with a Bachelor of Laws (Honours) degree. She is currently following the Master of Advocacy course at the same university, and her legal interests include criminal law, family law and the law of obligations, more specifically relating to tort law.
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1. Introduction
T
his dissertation not only delved into the matter of forced marriage, but also in regard to abduction. Forced marriage might be seen as a tradition in many countries, however, in others, it is considered to be a crime. The articles and regulations regarding forced marriage were introduced in Malta in 2014 and, from the author’s point of view, were never analysed thoroughly. The author started by explaining and clarifying not only the concept of forced marriage, but also the elements which together form such crime. The crime of abduction was later linked with the crime of forced marriage. One then finds an examination of the evolution and development of the crime of forced marriage on the international plane and how forced marriage became known as it is classified today. Furthermore, Malta was compared with other countries so as to show its progress to protect not only the victims of such degrading crimes, but also the aim to protect society in general.
2. The definition of Forced Marriage, and the Analysis of Article 251G of the Criminal Code By way of introduction, the concept of forced marriage is found under Article 251G of the Criminal Code.1 Forced marriage is different from other acts by which a union may be formed. This is because such marriage takes place when a bride or groom (or both) are made to marry against their volition. This means that there would be an involuntary union on one or both sides. A union is described in many ways, but most importantly, it is described as a solemn act between two people whereby such union would be governed by the laws and statutes of the country where the newlyweds got married. This definition does not apply in any way to a marriage which has been forced on the bride or groom. Marriages that have been entered into without consent being fully and freely given are tainted by coercion, violence, or even threats which would have been made by the families of the spouses. Unfortunately, many choose to stay in such a sham of a marriage which, amongst other things, would end up leading to sexual slavery, early pregnancies, and also marital rape. There are numerous reasons why many pushes for such union to take place. According to the United Kingdom’s Foreign and Commonwealth Office, forced marriage occurs for many reasons; for instance, to protect the 1
Criminal Code, Chapter 9 of the Laws of Malta, 1854.
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family honour, to exercise control over the victim’s sexuality or wealth so as to acquire financial gain, or to strengthen family links.2 It has to be kept in mind that a forced marriage and an arranged marriage are not alike, even though there may be similarities. The main difference between both scenarios is that of consent. When an arranged marriage is to take place, one family or even a third party with a child they want to marry off would communicate with other families who want to do the same with their own, and thus get their respective children to form a suitable union. If an agreement is reached, consent is to be tendered by both spouses for the arranged marriage to be valid. The final decision is in their hands as they have the choice to accept or reject each other and, if they do accept, give their consent without the use of force. On the other hand, in a forced marriage, various methods could be used so as to compel the victim to partake in such union. There are instances, however, which may make it problematic to differentiate between forced and arranged marriages3. Unfortunately, the concept of forced marriage has caused considerable turmoil since the very first cases that occurred in Sierra Leone. Several court judgments on the issue of forced marriage paved the way to the creation of criminal law provisions in various countries and new legal and judicial mechanisms to combat this crime. These will be discussed and explained during the progression of this paper. One ought to start with the analysis of Article 251G of the Maltese Criminal Code which states that: Any person who by force, bribery, deceit, deprivation of liberty, improper pressure or any other unlawful conduct or by threats of such conduct, forces anyone to enter into a marriage shall be guilty of causing a forced marriage and shall, unless the fact constitutes a more serious offence under any other provision of this Code, be liable on conviction to imprisonment for a term from three to five years: Provided that any act so made in contravention of this provision shall be null and without effect at law. Forced marriage is a concept which, when defined, can be deconstructed into a number of layers. The first layer would be that of compelling the victim 2 ‘Forced Marriage FAQs*’ (Global Justice Initiative) < https://globaljusticeinitiative.wordpress.com/forced-marriage-2/forced-marriage-faqs/ > accessed 22 October 2019. 3 Ibid.
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to marry by force which can be exerted either by physical or by psychological manipulation. In this situation, the victim would be forced to do something which they would not normally do. Another facet is that of bribery, which is tackled under this article as well as in several other provisions of the Criminal Code. This situation involves money, favours, or promises affecting a person’s judgment. One’s conduct could also be tainted especially when bribery occurs in relation to a person in a position of trust like an officer of the law. Bribery can also involve a family member like a parent; for example, the promise of a sum of money may induce them to force their child into marriage. There is also the element of improper pressure, with varying effects, where the victim would be constantly under the excessive pressure of a dominant superior of a more powerful will and mind. When dealing with the element of consent, it has to be kept in mind that marriage is a contract. Therefore, just as a contract would only be valid if the necessary elements are visible, so does marriage. Under contract law, the four necessary elements are capacity, consent, object and consideration, also known as causa. The issue which is deeply discussed in this paper is that of consent, which entails the notion that one can opt out of such contract if such consent is defective. Unfortunately, in the case of a forced marriage, this is easier said than done. In such case, consent can be vitiated in three ways, that is by error, violence, or fraud. When it comes to consent extorted by violence, this need not necessarily be physical violence, but is very often moral violence. Clearly in this case, a contract can be annulled by the person who shows that the consent given is defective. In the case of forced marriage, violence is a common factor. The Marriage Act, and formerly the prevalent canon law, are used to explain when a marriage can be annulled.4 This is because when nullity is pronounced, it has a retroactive effect as the marriage is declared null from the moment it was contracted. Thus, a forced marriage can be likewise declared to be null. Consent is of utmost importance in the offence of forced marriage as it has to be coerced out of the person. According to Article 11 of the Marriage Act, marriage can only be valid if all provisions relating to the formal validity of marriage are observed and satisfied. The annulment of such a marriage is only valid and accepted if the demand is made within two years of its celebration. In a forced marriage, there is no time limit to when one can go against the perpetrator of this criminal offence. Moreover, Article 19(a) makes it clear that when consent was brought about by fear and 4
Marriage Act, Chapter 255 of the Laws of Malta, 1975.
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violence of any kind, it is void. Under canon law, there is also a reference in relation to a marriage entered into because of force and fear.5 Fear is an element which, like violence, is created from undue pressure or influence being imposed on the victim. A person who is afraid will easily do what they are told. Fear can affect the person in many ways, and this is clearly seen in different provisions in the law such as in Article 978 of the Civil Code.6 This article explains how consent may be extorted by violence. The impression left on a reasonable person when the test of the reasonable man is applied has to be grave in an absolute or relative manner and also extrinsic. In such a situation, for fear to invalidate the marriage it must be such that the fear could not have been avoided except through marriage. This means it must not be the result of simply fertile imagination of the spouse. Absolute fear would compel any well-balanced man to enter into a marriage against his own will. This, therefore, involves an objective type of fear. Relatively grave fear refers to lesser evils which, if inflicted on certain persons of a timid nature, could result in fear. Furthermore, violence could be inflicted on such a victim by threatening their descendants.7 However, in the case of reverential fear, if there was no violence inflicted against the persons mentioned under Article 980, this is not enough to invalidate a contract.8 Therefore, the courts in such a case use a ‘checklist’ to determine the element of fear. First of all, the fear inflicted has to be grave. Secondly, the person inflicting such fear has to be able to carry out the threat. Thirdly, fear of threats has to be the principal reason the marriage was contracted. In addition, other elements constitute a forced marriage such as unlawful conduct and threats. It is important to understand what makes up the criminal offence of a forced marriage and that one is to identify the actus reus and the mens rea to understand what it entails. The affairs of the act carried out are known as the actus reus, also known as the external, physical element of the offence or the material condition which is the carrying out of an act by the person who is to be held accountable for his acts. The mens rea is not only the mental element but also the formal condition which describes the guilty mind. It is important that both sides coincide with each other as the Latin maxim ‘actus 5 6 7 8
Ibid. Civil Code, Chapter 16 of the Laws of Malta, 1870. Ibid. Ibid.
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non facit reum nisi mens sit rea’ implies.9 So, the act alone does not amount to guilt as it must be accompanied by a guilty mind. However, this guilt has to be a legal guilt and not a mere moral guilt. From here one is to examine Article 251G and its elements of ‘actus reus’ and ‘mens rea’. The first element is that of force which one makes use of, and the mental element which can be of two forms. It can either be the thought of making the victim do his bidding by using physical exertion or by verbal abuse. By badgering another person, for example, to marry oneself, or to help oneself to marry another person, can be seen as a form of improper pressure. When such pressure is applied, the person would feel distressed, worried, and even harassed and would, in the end, do their bidding. There is also the use of any unlawful conduct, the use of threats, bribery, or deceit, and the deprivation of liberty. One has to ask if these elements are to be examined all together or separately, one offence at a time. For the offences to lead to a forced marriage, they must have been carried out for the sole result of the achievement of forced marriage. The mens rea and the actus reus in this case can vary as there are different acts which can lead to a forced marriage. If, for example, one is to examine the notion of deceit, the mens rea is knowingly falsifying statements in order to lead to forced marriage, while the actus reus would be the false statement itself. The offence of bribery under Article 115 of the Maltese Criminal Code deals with the corruption of persons of authority.10 In this case, the mens rea can be seen as the intent to knowingly corrupt an official who is on duty, while the actus reus is the bribe being offered to such an official. In the context of forced marriage, however, the act of bribery is similar, but there is no official involved. The situation, for example, can be person A wanting to marry person B’s daughter C, and so he gives him an offer he could not refuse to make her marry person A against her will. When examining the offence of a threat, the tone of voice, language and physical exertion are taken into consideration. The mens rea of such an act would be perceived by the reasonable man as a threat with the intention to harm his life. The actus reus in this case does not have to be any physical confrontation. In this case the threat itself would be the actus reus because any reasonable 9 10
‘an act doesn’t make a man guilty of a crime, unless his mind is also guilty’. Criminal Code, Chapter 9 of the Laws of Malta, 1854.
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person would understand that the words uttered constitute a threat.11 The relationship between such persons, the reasons for such threats, and other elements have to be considered individually.12 The last factor to be considered is the offence of deprivation of liberty. In this situation, deprivation of liberty one being physically detained to be married against their wishes or where someone is controlled and kept in a forced marriage. Last but not least, on the conviction of the offence of forced marriage, the offender would be liable to imprisonment of between three to five years, but different situations can aggravate such an offence. Also, a forced marriage would be declared null and without effect in the eyes of the law. Even though the law is able to punish the perpetrator, it would not always be possible for the victim to report such offence.
3. The offence of Abduction, under Article 199 of the Criminal Code, in relation to the offence of Forced Marriage After examining forced marriage, it is interesting to understand why the author linked such article with that of abduction under Article 199 of the Criminal Code. One can see that some of the elements of abduction are similar to that of a forced marriage. One should note that the word ‘abduction’ can be used interchangeably with the word ‘kidnapping’.13 Abduction does not only arise if the person is removed from one’s country, but also when the person is taken against their will within the same country. The crime of abduction has been recently updated by Act XVIII of 201814 where Article 199 states that: Whosoever shall, abduct any person with the intent to harm such person, shall, on conviction, be liable to imprisonment for a term from six to twelve years.15 11 Edmonton Criminal Defense Lawyer, ‘Uttering Threats’ (ZIV Law Group: Albert Criminal Defense Lawyer, 17 February 2016 < http://www.criminallawyeralberta.com/uttering-threats/ > accessed 20 February 2019. 12 Ibid. 13 ‘Kidnapping V. Abduction’ (uslegal, 2019) < https://kidnapping.uslegal.com/kidnapping-v-abduction/ > accessed 22 October 2019. 14 Act No. XIII of 2018. 15 Criminal Code, Chapter 9 of the Laws of Malta, 1854.
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Furthermore, if the abductor kidnaps a person under the age of 18 years by the use of fraud or seduction, the punishment of imprisonment from six to twelve years is increased by one or two degrees. Moreover, abduction can occur not only to a person who has reached the age of majority but also to a child, who in Malta is categorised under the age of sixteen.16 There is also the situation of parental abduction, where a parent abducts their own child and removes them from their place of habitual residence without consent. This case is different than when one is abducting for the aim of marriage. Parliamentary debates were studied when the scenario of abduction was discussed. Article 199 was recently updated while Article 200 was repealed. The original version of Article 200 gave rise to much debate and controversy. The minutes of the parliamentary debates of Act XIII of 2018, which relates to the creation of the new Gender-Based and Domestic Violence Act of 2018, were examined.17 In the second reading, considerable importance was given to the Istanbul Convention, emphasis being made on the numerous articles that came to be enforced as part of the laws of Malta.18 This was done so that individuals are protected and also to promote the rights of people. Those who are aimed to be mainly protected by this Act are those who would be at risk of domestic violence, as people should have a life free and unencumbered form violence. For the articles of the Istanbul Convention to be enforced in Malta, both Chapter 481 and Chapter 532 had to be repealed to pave the way for the creation of the new Gender-Based and Domestic Violence Act.19 By understanding the nature of domestic violence and gender-based violence, one can start to understand why the articles in the Criminal Code on abduction had to be changed. Abduction under the Criminal Code does not seem to be referring to the abduction of a child by the parent as explained above, but to a situation where one is abducted by a stranger, acquaintance or other persons for the sole aim of harming the victim. This offence falls under crimes of gender-based violence just like the offence 16 Child Abduction and Custody Act, Chapter 410 of the Laws of Malta. 17 Gender-Based Violence and Domestic Violence Act, Chapter 581 of the Laws of Malta. 18 Ulla Jurviste and Rosamund Shreeves, ‘The Istanbul Convention: A Tool to Tackle Violence Against Women And Girls’ (europarl, 2018) < http://www.europarl.europa.eu/thinktank/ en/document.html?reference=EPRS_ATA(2018)630297 > accessed 22 October 2019. 19 Council Of Europe Convention On Prevention And Combating Of Violence Against Women And Domestic Violence (Ratification) Act, Chapter 532 of the Laws of Malta; and Domestic Violence Act, Chapter 481 of the Laws of Malta.
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of forced marriage under Article 251G.20 The offences of abduction and forced marriage were implemented and enforced as part of the laws of Malta because of the ratification of the Istanbul Convention. The protection which is provided by Act XIII of 2018 to gender-based violence victims varies. However, Malta has been doing its utmost so as to protect society in general against gender-based violence and domestic violence. By the aid of Article 6 of the Gender-Based Violence and Domestic Violence Act, Malta established a Commission to provide a comprehensive approach towards such crimes. The Commission strives to create a better mechanism to prevent or eradicate all forms of violence related to this Act. This entity provides further assistance to victims of gender-based violence and domestic violence. The creation of a Designated Agency authorises the Minister responsible for equality to appoint organisations, bodies or institutions to provide treatment programmes for victims and transgressors. Article 19 of the Act describes services to be provided to such bodies. Moreover, victims are better protected by the creation of helpline facilities equipped with specialised support services in relation to these crimes. Victims are further assessed by experts so that their needs are met and where necessary accommodation and shelters are provided. It seems that there is a nexus between forced marriage and abduction. Here, one is not referring to parental abduction, but to the case of abduction for the sake of marriage. In both offences, consent is not given freely by the victim. In the case of abduction, as in forced marriage, the victim endures mental suffering and physical violence. The abductor may make use of threats, physical violence, coercion, improper pressure, sexual violence and force which would lead to fear so grave as to compel the victim to marry her abductor just as in the case of a forced marriage. Furthermore, the victim is deprived of one’s liberty as one would have been abducted and held against one’s will. Intention to harm by abduction under Article 199 implies a variety of situations. Harm from abduction can even result from the marriage the victim was compelled to enter against one’s wishes. When fear and other elements in relation to abduction for the sole aim of marriage are used, it seems to result in a forced marriage. Before Article 199 was updated, it used to refer directly to the use of violence to abduct the person one forcibly wanted to marry. Although this article has been updated, the description is still somewhat loose. Article 200, which today is repealed, dealt with the situation where the offender releases 20
Criminal Code, Chapter 9 of the laws of Malta, 1854.
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the abducted person. Various commentators around the globe considered it as a sexist provision that went against the morals and values of women.21 It would seem that Article 200, before it was repealed, went against Article 251G which was implemented in 2014. This is because the accused who carried out the abduction for the sole aim to marry would not be held criminally liable even though such a union would seem to be a forced marriage if a complaint is made by the victim. According to Stephen Tonna Lowell in an opinion piece in the Times of Malta, the offence under Article 200 was the only provision which came close to kidnapping.22 However, he stated that it was not true that the accuser would have immunity from prosecution of such an offence. To date, Malta has not stopped using its available resources to cater for the victims, witnesses and the accused of gender-based violence and domestic violence. A strategy known as ‘#istandforzeroviolence’ was created and is still followed to protect the victims and educate the Maltese population on the matter.23 Another initiative was created by the Human Rights and Integration Directorate known as ‘Full cooperation zero violence’.24 Its aim was to strengthen cooperation between different sectors and groups so that they would collaborate to better handle such violence. All in all, Malta is currently striving and doing its best to protect its population against genderbased violence. However, it seems that there are more services provided for those who have endured domestic violence. Services for gender-based violence in relation to abduction should be more specific. Unfortunately, a judgment relating to abduction surfaced recently in Malta in which, apart from the offence of abduction, a 21-year-old Italian was also gang raped. This was the case of Ir-Repubblika ta’ Malta kontra Omissis U Liban Hussein Mohamud, which described the moment when the victim 21 Yosola Olorunshola, ‘10 Ridiculously Sexist Laws That Have No Place In The 21St Century’ (Global Citizen, 28 November 2016) < https://www.globalcitizen.org/en/content/10-ridiculously-sexist-laws-you-wont-believe-still/ > accessed 22 October 2019; and Nina Strochlic, ‘The World’s Craziest Anti-Women Laws’ (Daily Beast, 16 February 2015) < https://www.thedailybeast.com/the-worlds-craziest-anti-women-laws > accessed 22 October 2019. 22 Kristina Chetcuti, ‘With this ring, I thee abduct...’, Times of Malta (25 February 2015) < https://timesofmalta.com/articles/view/With-this-ring-I-thee-abduct-.557503 > accessed 22 October 2019. 23 ‘Plenary Session Sitting No.: 073’ (Parliament, 2018) < https://parlament.mt/en/13thleg/plenary-session/ps-073-24012018-0400-pm/ > accessed 22 July 2019. 24 ‘‘Full Cooperation: Zero Violence’’ (2016) < https://meae.gov.mt/en/ZeroViolence/ Pages/Zero-Violence.aspx > accessed 23 July 2019.
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was abducted and shoved into a car by force, threatened and later raped.25 Another case was that of Ir-Repubblika ta’ Malta Vs Muhammed Ali Hasan buker Ahmed Abdilrahman Omar Osman Omar Anwar Otman Hasan.26 These judgments, amongst others, indicate that this type of abduction has a pattern. First, a stranger takes the victim against one’s will into a secluded place. There, the aggressor violates the victim sexually by forcing himself onto him/her and raping the person. The victim is not only harmed physically because of the excessive force exerted, but also mentally by the use of threats that cause absolute fear. It seems that Article 199 considers abduction for the sole aim of marriage as a form of harm towards the victim. Research showed that such an instance has not yet taken place in Malta. However, the situation is different abroad. In Kyrgyzstan, forced marriage is part of the ‘tradition’ of bride kidnapping. After the death of a young women protests were held against such tradition. Regrettably, this crime has also occurred in the United Kingdom. The victim was abducted, forced into two Muslim marriages and abused since the age of fifteen.27 These, however, are not the only cases which have occurred, as seen throughout this paper.
4. The Criminalisation of Forced Marriage, from an International Perspective After examining the situation by which abduction can lead to an offence of a forced marriage, one is to now consider when awareness about this crime began. Recognition for such offence gained momentum around the year 2000, but the wheels were already in motion after the Second World War. By criminalising forced marriage on an international plane with the help of international tribunals, new perspectives arose that established it as an international crime with associated penalties. However, when judgments which dealt with the crime of forced marriage were analysed, many were 25 Criminal Court, 23rd of July 2019, Citation number 16/ 2018, Onor. Imhallef Dr. Consuelo Scerri Herrera LL.D. 26 Criminal Court, 12th of November 2010, Citation number 34/2010, Onor. Imhallef Michael Mallia. 27 Jack Montgomery, ‘English girl allegedly abducted, forced into 2 marriages, 8 abortions by Pakistanis during 12-year captivity’ (Breitbart, 15 September 2018) < https://www.breitbart.com/europe/2018/09/15/worst-grooming-case-english-girl-abducted-forced-marriages-abortions-pakistani-muslims/ > accessed 22 October 2019.
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indecisive about whether forced marriage should fall under the offence of sexual slavery or a crime against humanity as an ‘other inhumane act’. The court which changed the views in regard to this crime was the Special Court of Sierra Leone. Its statute was put together by the jurisprudence of the ICTY and ICTR which had already delivered judgments related to sexual slavery and gender-based violence. To better understand how the crime of forced marriage evolved, the jurisprudence of the International Criminal Court has to be examined as well, such as the judgment of Domnic Ongwen.28 This is analysed together with the judgments of Sierra Leone and how this court categorised forced marriage as an ‘other inhumane act’ under crimes against humanity.29 For many, this sort of placement of forced marriage was puzzling. Forced marriage was tackled as a crime in 2008 by the judgment of Prosecutor v. Alex Temba Brima and Others of 2008, known as the AFRC Trial Chamber judgment.30 What was decided in this judgment was overturned in the Appeals Chamber. Unfortunately, Prosecutor v Issan Hassan Sesay and others of 2009 again blurred the definition of forced marriage as a crime against humanity of an ‘other inhumane act’ by the Appeals Chamber.31 In the first judgment, there was a lot of emphasis on the victims’ circumstances. The situation was heart-breaking because if the victims of such a marriage deviated from their so-called duties, they would have been severely punished. They were constantly in a state of fear, coercion, abuse, ill treatment, violence and other acts which psychologically harmed the victims. When the Trial Chamber examined the elements of sexual slavery under the Rome Statute and also Article 2(g) of the SCSL Statute, it declared that this crime should be ideally put under the charge of sexual slavery because of the women’s situation.32 Thus, the proposition of declaring forced 28 Micaela Frulli, Advancing International Criminal Law (Oxford University Press, 2016) < https://www.researchgate.net/profile/Micaela_Frulli > accessed 22 October 2019. 29 Frances Nguyen, ‘Untangling Sex, Marriage, And Other Criminalities In Forced Marriage’ (2014) 6 Goettingen Journal of International Law < http://www.gojil.eu/61-home > accessed 22 October 2019. 30 < https://sierralii.org/sl/judgement/special-court/2008/23 > accessed 22 October 2019. 31 < http://www.rscsl.org/Documents/Decisions/RUF/Appeal/1321/RUF%20Appeal%20Judgement.pdf > accessed 22 October 2019. 32 < https://www.icc-cpi.int/nr/rdonlyres/336923d8-a6ad-40ec-ad7b45bf9d-
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marriage to be a crime against humanity under other humane acts was not accepted because the evidence showed that it was not different from sexual slavery. It does not mean that this affirmation is absolute. It was made clear that by putting forced marriage under the same category of sexual slavery, important factors which are not sexually related, such as mental trauma, are put aside. By putting the offence under a category of ‘crimes against humanity’, there would even be the recognition of non-sexual acts in forced marriage. Here many different opinions arose. Following the decision of the Trial Chamber, the AFRC Appeals Chamber judgment changed the notion of forced marriage. In such situation, the victim would be affected severely both mentally and physically. It has been affirmed that such crime should be listed under crimes against humanity as an ‘other inhumane act’ as all the requirements were met. Lastly, after this Appeal Judgment, another case known as the RUF judgment, Prosecutor v Issa Hassan Sesay, Morris Kallon & Augustine Gabo,33 in a way clouded the previous statements on forced marriages instead of further untangling the confusion. Since these judgments, the concept of forced marriage has been given considerable importance. On the 26th January 2015, a case cropped up in the ICC in relation to this crime. It was the first and the only case so far to involve the former high-ranking commander of the LRA known as Dominic Ongwen. The Pre-Trial Chamber II took into consideration the latter case law of the SCSL. To date, forced marriage was a crime against humanity of an ‘other inhumane act’, which was distinct from sexual slavery. This case confirmed that this was the best description of a forced marriage as it did not link it to sexual slavery. It was declared that a forced marriage in this context was seen as an attack which was planned on a large scale against a particular civilisation which would result in the crime against humanity of an ‘other inhumane act’, if it satisfies the required elements, even though it could result in sexual slavery. These two elements, according to this judgment, are burdens put on these victims because they would not have given their consent to marriage. Moreover, it also explained the victims’ stability after the ordeal and the aftereffects left on them. This explanation was comprehensive enough to capture the important features of the crime, but at the same time, it was also limited in order not to be mixed up with the e73d56/0/elementsofcrimeseng.pdf > accessed 22 October 2019. 33 Refworld < https://www.refworld.org/cases,SCSL,49b102762.html > accessed 22 October 2019.
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similar crime of sexual slavery.
5. The Criminalisation of Forced Marriage, and the European Union Lastly, it is worth examining the Istanbul Convention, which aided in the implementation of the criminalisation of such offence. Many organisations have been doing their best to spread awareness and to criminalise forced marriage in various countries. This crime had to be criminalised globally as it was not enough for countries to handle this situation themselves under domestic law. The first organisation which stepped up and is still trying to criminalise forced marriage was the Council of Europe.34 It created a Convention on preventing and combating violence against women and domestic violence known as Treaty 210 or the Istanbul Convention. This Convention is linked to the Convention on the Elimination of All forms of Discrimination against Women (CEDAW) and its case law. Variating tools were made use of so as to highlight the horrendous act of forced marriage on a global scale. Amongst such tools are one would find the Declaration of Human Rights and the UN Convention on consent to marriage.35 When examining this treaty, one should take into consideration the many countries that have signed and ratified it, but most importantly, when it came into force. In this situation Malta not only signed the Convention but also ratified it and put it into force, as did 34 other countries.36 Interestingly, the EU signed the Convention on 13th June 2017, but never ratified or implemented it. It seems very puzzling as almost all the member states of the EU have signed, ratified and enforced it. Many institutions have been encouraging the rest of the Member States and the EU as a whole to ratify it. If a country fails to sign, ratify, and enforce this instrument, it would be excluding the best tool to help such victims. This Convention may be seen as the best device to fight against gender-based violence, such as a forced marriage, for many reasons. 34 An international organisation in Strasbourg which comprises 47 countries of Europe. It was set up to promote democracy and protect human rights and the rule of law in Europe. 35 1948, s 16(2). 36 Chart of signatures and ratifications of Treaty 210 < https://www.coe.int/en/web/ conventions/full-list/-/conventions/treaty/210/signatures > accessed 22 October 2019.
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Article 251G of the Criminal Code was added to Maltese legislation by Act I of 2014.37 The first sitting was held on 5th of November 2013. The Hon. Chris Fearne stated that the concept of forced marriage involves any use of force, threats, lies, deprivation of liberty, unnecessary pressure and other illegal acts which would make a person marry against one’s will.38 Parliament understood that such an offence is a tradition in some communities, however, every person should have the freedom to choose their own spouse. To date, in Malta, there has been no case law in relation to the offence of forced marriage. This means that up until now, nobody has been charged with the offence of forced marriage in Malta, unlike in many other countries. Dr Francis Zammit Dimech reminded the EU and its authorities to implement better resolutions in third world countries for the prohibition of this act.39 Although this concept has been implemented in the Maltese Criminal Code, to date there has been no case law of such an offence. One nation which has signed the Convention but has not ratified it is the United Kingdom. On 16th June 2014, the UK made forced marriage a crime, making it a self-standing criminal offence in England, Scotland, and Wales. However, this act did not apply to Northern Ireland. The Republic of Ireland signed the Convention in 2015 and the treaty was only ratified and entered into force in 2019. The crime of forced marriage is described in the 2014 Anti-Social Behaviour, Crime and Policing Act Part 10. This State already had some form of protection against such crime by the Forced Marriage (Civil Protection) Act 2007 (FMCPA) which more or less is similar to the definition found today.40 Forced marriage protection orders (FMPOs) were produced when the FMCPA was created to cater for those in need. Unlike in our country, considerable debate took place on the notion of forced marriage.41 The 37 Act I of 2014, An Act to amend the Criminal Code, Cap 9, <http://www.justiceservices. gov.mt/DownloadDocument.aspx?app=lp&itemid=25906&l=1> accessed 22 October 2019. 38 < https://parlament.mt/13th-leg/political-groups/partit-laburista/fearne-chris/ > accessed 22 October 2019. 39 NET Newsroom, ‘Il-Parlament Ewropew b’messaġġ ċar kontra ż-żwiġijiet sfurzati) (Net News, 8 March 2019) < https://netnews.com.mt/2018/03/08/il-parlament-ewropew-bmessagg-car-kontra-z-zwigijiet-sfurzati/ > accessed 23 October 2019. 40 Aisha K. Gill, ‘An analysis of forced marriage legislation in the UK’ (University of Roehampton) < https://safelives.org.uk/sites/default/files/resources/An%20analysis%20of%20 forced%20marriage%20legislation%20in%20the%20UK_Gill_Safe%20Lives_28%20April%202017. pdf > accessed 23 October 2019. 41 Jenny Moore, ‘Criminalisation of forced marriage: taking it underground or to bringing perpetrators to justice?’ (LexisNexis) < https://blogs.lexisnexis.co.uk/content/family-law/criminalisation-of-forced-marriage-taking-it-underground-or-to-bringing-perpetrators-to-justice > accessed 23 October 2019.
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criminalising of this act is crucial in handling this act. Theresa May, who at that time was the UK Home Secretary, stated that this legislation enables the government to safeguard and protect these victims.42 However, numerous foundations believed that this law would do more damage than good as victims of a forced marriage would not speak up.43 The UK has prosecuted numerous cases on forced marriage since the legislation was implemented. One of the many cases occurred in June 2015 and was the very first case which dealt with such offence.44 A 34-year-old businessman, who was already married, was incarcerated for 16 years after forcing a 25-year-old woman to marry him. He raped her repeatedly and threatened her with publishing footage recorded without her consent in the shower if she did not marry him; and he warned her that if she reported the abuse, he would harm her family. Today, there is the Forced Marriage Unit45. This is an operation carried out by the Foreign and Commonwealth Office., the Home Office and the government to cater for forced marriage policies. It handles issues in the UK and overseas. It has a public helpline that gives advice and supports such victims. This organisation is made up of people who were trained for that purpose. Apart from the UK, eleven other countries have signed but not ratified this Convention. According to a report published in 2017, the UK will ratify only when it feels ready. 46 As seen above, unlike Malta, the UK already had provisions against this crime in 2007. Malta has different services in relation to gender-based violence crimes. However, there are no services specifically implemented for the act of forced marriage, unlike in the UK which has ‘The 42 ‘New law against forced marriage takes effect’ (Independent, 16 June 2014) < https:// www.independent.co.uk/news/uk/home-news/new-law-against-forced-marriage-takes-effect-9539097.html > accessed 23 October 2019. 43 Henna Foundation < http://www.hennafoundation.org/home.html > accessed 23 October 2019. 44 Press Association, ‘Businessman is first person jailed under forced marriage laws (The Guardian, 10 June 2015) < https://www.theguardian.com/society/2015/jun/10/34-year-oldman-first-person-to-be-convicted-under-forced-marriage-laws > accessed 23 October 2019. 45 ‘Guidance: Forced Marriage’ (UK Government, 20 March 2013) < https://www.gov.uk/ guidance/forced-marriage > accessed 23 October 2019. 46 Hannah Johnson, ‘Why Hasn’t the UK Ratified the Most Important Violence Against Women Treaty?’ (Each Other, 24 November 2017) < https://rightsinfo.org/hasnt-uk-ratified-important-violence-women-treaty/ > accessed 23 October 2019.
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Forced Marriage Unit’47. This unit is made up of trained professionals who are ready to give assistance to these victims. As stated above, other countries have ratified the Convention, one of which is Estonia, which did so very recently in 2018. This is a flourishing country where, although these offences are not very common, it was felt such criminal proceedings should be implemented, especially in light of globalisation and immigration.48 Forced marriage in Estonia is criminalised under the category of the trafficking of human beings, which seems to relate more to sexual slavery than forced marriage. Still, the fact that back in 2015 Estonia already collaborated with other countries to stop such acts conveys its government’s determination to put an end to the crime of forced marriage One of the aims of the EU is to establish an external strategy against such crime of early forced marriage (2017/2275(INI)).49 The Council has tried on numerous times to persuade countries which are not parties to this Convention to sign it.50
6. Conclusion This study has examined forced marriage from different aspects, and not only from the perspective of Maltese law. Similarities between the situation in Malta and other countries have been drawn. Also, areas where Malta has the potential of enhancing its ways of dealing with the crime of forced marriage have been noted. The offence of abduction can be carried out by different people for different reasons and can have a different outcome in each situation. By examining parliamentary debates, one is able to understand the manner and reasons why related laws updated. It has been noted that particular elements of the offence when there is abduction for the sole aim of marriage are the same as the elements of the offence of forced marriage. 47 ‘Forced Marriages Problems’ < https://www.supportline.org.uk/problems/ forced-marriages/ > accessed 23 October 2019. 48 ‘Female genital mutilation, forced marriages criminalized in Estonia’ (err.ee, 16 July 2017) < https://news.err.ee/607729/female-genital-mutilation-forced-marriages-criminalized-in-estonia > accessed 23 October 2019. 49 Charles Goerens, ‘Towards an EU external strategy against early and forced marriages – next steps (2017/2275(INI)) < http://www.europarl.europa.eu/doceo/document/A-8-2018-0187_EN.html > accessed 23 October 2019. 50 ‘Chart of signatures and ratifications of Treaty 210’ < https://www.coe.int/en/web/ conventions/full-list/-/conventions/treaty/210/signatures > accessed 23 October 2019.
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Foreign judgments, which developed the meaning and understanding behind a forced marriage, aid governments on how such offence is to be approached by domestic law. By doing so, better mechanisms would be created so to one day eliminate such crime which creates threat to society. Furthermore, by the updates made to Criminal Code, Malta partook in the change to implement such offence and tougher repercussions. By the aid of such information, the author not only showed the dark truth behind forced marriage, but also that it is intertwined with the offence of abduction. This also sheds light on the countries which have responded in regard to this offence and how they have done so.
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Robert Musumeci Planning Legislation in Malta - A Brief Historical Overview
Dr Robert Musumeci is an advocate and an architect. He also holds a Masters Degree in Conservation Technology in Masonry Buildings. He is the founding partner of the architectural firm RMPERITI and prior to being admitted to the Maltese Bar, he had practiced as an architect since 1998. He is a former chairperson of the Building Industry Consultative Council (BICC) and presently holds the post of a techno legal advisor to the Government of Malta. Dr Musumeci was directly involved in the reforms which led to Malta Environment and Planning Authority’s demerger and the establishment of the new Lands Authority in 2016. Presently he is involved in the setting up of the new Construction and Building Authority which should take over the roles of the Building Regulations Office, the Building Regulations Board, the Masons Board and the Building Industry Consultative Council. Dr Musumeci has published several academic articles related to administrative law and planning legislation. He was selected by the Faculty of Laws (University of Malta) for the prize of Best Doctor of Laws Thesis Award 2016 for his thesis entitled ‘The Development Planning Act 2016 - A critical Appraisal’. Dr Musumeci delivers lectures in administrative law and development planning legislation at the University of Malta. He is currently finalizing his PhD thesis entitled ‘Judicial Interpretation of Maltese development planning law - Eliciting the added value’.
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1.1 THE SITUATION PRE-1992
T
he planning system, as witnessed today, is a result of the legislative developments which took place in 1992.1 There are records which indicate that attempts at setting up a planning authority and the drawing up of a national plan regarding development planning have existed as early as 1945.2 However, up until the year 1962, land was essentially allotted for development by government according to the exigencies of the day.3 This explains the building boom in the aftermath of World War II. From 1962 onwards, prospective developers were required to engage an architect and civil engineer to obtain permission from the Director for Public Works prior to ‘constructing or closing a street, or erecting any building or increasing the height or otherwise modify any existing building or change the use of any land or building’.4 Once an application to carry out such development reached the Department of Public Works, it had to be assessed on three levels: The sanitary engineer officer (SEO), acting on behalf of the Superintendent of Public Health, was entrusted with assessing whether submitted applications were in line with the sanitary regulations found in the Police Code5 and the Construction of Houses and Drains Regulations.6 Applications were assessed in terms of the required levels of natural light and air ventilation, which could vary, depending on the nature of the development and height of a given building. For example, the SEO had to assess whether, in the case 1 The Planning Authority was set up by virtue of Chapter 356 of the Laws of Malta enacted by Act I of 1992. This Act was passed by the House of Representatives at Sitting No. 611 on the 15th January 1992. 2 Paul Gauci in Structure Planning in the Maltese Islands: An Assessment of Contemporary Endeavours in the Establishment of a Policy-led Planning System in Malta, (University of Newcastle upon Tyne, 2002), discusses proposals by Harrison and Hubbard (in 1945), Windyer Morris (in 1959) and Italconsult (in 1964), amongst others. 3 Paul Gauci, Structure Planning in the Maltese Islands: An Assessment of Contemporary Endeavours in the Establishment of a Policy-led Planning System in Malta, (University of Newcastle upon Tyne, 2002). 4 Code of Police Laws, Chapter 10 of the Laws of Malta, Article 3(1). This provision was eventually repealed by Act I of 1992. 5 Code of Police Laws, Chapter 10 of the Laws of Malta, Article 97. This provision was never repealed from the statute, notwithstanding the Development Planning (Health and Sanitary) Regulations Legal Notice 227 of 2016. 6 Government Notice 110 of 1934. Construction of Houses and Drains Regulations.
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Development and Planning Legislation of dwellings, a backyard was provided along the entire length of the façade.7 Applicants who felt aggrieved by the SEO’s decision were entitled to request the General Services Board (GSB), chaired by the Superintendent himself, to review the case. Ultimately, the decision of the Board could be appealed before the Court of Appeal, on points of merit together with points of law. When, on the other hand, the envisaged interventions affected the external appearance of a building,8 the application was also assessed by the Aesthetics Board9 which was established by virtue of the Aesthetic Building Ordinance of 1935. The members of the Aesthetics Board, who were chosen directly by the Minister, exercised their discretion in deciding whether to accept, amend or reject a proposal. When the Board intended to reject a design proposal, it was obliged to inform the applicant of its intentions at least four days prior to the scheduled hearing during which the application was going to be discussed.10 On the day of the hearing, applicants had an option to be assisted by an architect and civil engineer whereas interested third parties could attend upon a request being made and accepted a priori. The decision of the Aesthetics Board had to be supported by reasons and a copy of the decision had to be sent to both applicant and interested parties present during the sitting.11 The Board’s decision could be reviewed before the First Hall, Civil Court, in which case the Director of Public Works had to be a party to the proceedings in order to defend the decision taken by the Board.12 The views of the SEO and the Aesthetics Board were then communicated to the Planning Area Permits Board (PAPB). The PAPB was established by virtue of Legal Notice 10 of 1962. Initially, this Board was appointed by the Governor of Malta in line with Section 19 of the Code of Police Laws to act as the delegate of the Principle Secretary, whose duties were later conferred on the Minister responsible for Public Works.13 It is important to highlight that the PAPB was the delegate of the Minister, who remained legally responsible for the decisions taken by the PAPB. In fact, the PAPB could only recommend to the Minister responsible for Public Works whether the permit should be 7 Code of Police Laws, Chapter 10 of the Laws of Malta, Article 97(n)(1)(i). 8 With the exception of religious buildings. 9 Aesthetics Building Ordinance of the Laws of Malta, Article 45. 10 Aesthetics Building Ordinance of the Laws of Malta, Article 8. 11 See for example: Alfred Aquilina vs Architect Keith Cole noe et. Decisions of the Superior Courts, Volume LXXIV,1990, Pt. II, p.379, writ of summons [220/1990]. 12 Aesthetics Building Ordinance of the Laws of Malta, Article 9. 13 Kevin Aquilina, Development Planning Legislation – The Maltese Experience, (Mireva Publications, 1999) 112.
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granted or not.14 On the other hand, the final decision whether to issue the permit was in the hands of the Minister for Public Works, whose decision was also subject to judicial review before the First Hall, Civil Court and in such cases, the Minister would be a party to the proceedings. 15
1.2 THE SITUATION POST-1992 With a change of the administration in 1987, the planning system took a completely different turn. The incoming Government decided to publish a draft Temporary Provision Scheme (TPS) delineating the boundaries within which built development could take place. Eventually, the Development Planning Act (DPA) was promulgated in 1992,16 paving the way for the setting up of the Planning Authority as we know it today. The DPA was closely modelled on British pre-1991 town and country planning legislation with the cardinal difference being that in the United Kingdom, the powers were delegated to local and central government officials whereas locally, the said powers were vested in a centralised authority, known as the Planning Authority (PA). The latter, unlike its British counterpart, was not accountable to the electorate. According to the DPA, the PA was vested with three key functions, namely: (i) development planning – that is, the formulation and approval of statutory national, local and sectoral development policies together with the preparation and maintenance of subsidiary plans formulated within the framework of a Structure Plan; (ii) development control – specifically, the power to issue development planning permissions, schedule properties and issue conservation as well as preservation orders; 14 See for example: Michael Axisa għas-soċjetà Lay Lay Co. Ltd vs L-Awtorita’ ta’ Malta dwar l-Ambjent u l-Ippjanar, decided on 14th January 2015 by the Court of Appeal (Inferior Jurisdiction) - [44/2013]. 15 See for example: Mary Grech vs Minister for Works et., decided on 29th January 1988 by the Court of Appeal (Superior Jurisdiction) - [Ap. No. 342/1988]. 16 The Planning Authority was set up by virtue of Chapter 356 of the Laws of Malta enacted by Act I of 1992. This Act was passed by the House of Representatives at Sitting No. 611 on the 15th January 1992.
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Development and Planning Legislation (iii) enforcement control – particularly, the monitoring of development, the issuance of enforcement and discontinuance orders as well as compliance certificates. Through the DPA, the meaning of ‘development’ embraced ‘the carrying out of building, engineering, mining or other operations for construction, demolition or alterations in, on over or under any land or the making of any material change of use of land or building...’.17 Unless otherwise expressly provided in the DPA, development could only take place once full development planning permission was issued by the PA. Another novelty was that applicants who felt aggrieved by the Authority’s decision could lodge an appeal before an independent board designated as the Planning Appeals Board (PAB) established under the same Development Planning Act.18 This was later transformed into the Environment and Planning Review Tribunal (EPRT) by the Environment and Development Planning Act.19 Furthermore, the decisions of the PAB (and later, the EPRT) could be contested before the Court of Appeal, however only on points of law decided by the said board.20 This meant that building permits were no longer handled by the Aesthetics Board and the PAPB, which were previously directly answerable to the Minister. Sanitary considerations, on the other hand, were still examined by the SEO, qua delegate of the GSB, in terms of the Code of Police Laws and remained so until the Development Planning (Health and Sanitary) Regulations, 2016 were enacted on the 10th June 2016. Consequent to the said regulations, sanitary issues are now assessed by the Planning Authority with the possibility of an appeal before the Environment and Planning Review Tribunal. It has been argued that the Planning Authority provided a public forum where spatial and environmental issues, previously under the exclusive control of politicians, had now to be justified.21 Cassar, a former Director General of the Planning Authority, described the transition from the PAPB to the PA as significant when stating the following: 17 Development Planning Act 1992 Article 30 (2). 18 Development Planning Act 1992, Article 15. 19 Environment and Development Planning Act, Chapter 504 of the Laws of Malta. 20 Development Planning Act 1992, Article 15(2). 21 Paul Gauci, Structure Planning in the Maltese Islands: An Assessment of Contemporary Endeavours in the Establishment of a Policy-led Planning System in Malta, (University of Newcastle upon Tyne, 2002), 502.
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Perhaps the most fundamental departure is in the transparency, openness and accountability of the plan preparation and decisionmaking processes, and in the extensive range of responsibilities, which are now tackled in a comprehensive, holistic and integrated manner.22 The DPA was subsequently amended in 1997 after a new government was installed in 1996. The changes were percieved as increasing government’s involvement in land use policy-making, but at the same time, on a positive note, also as increasing the accountability of Authority officials and addressing the real and perceived inefficiencies of the Authority.23 Of particular note is the fact that these changes introduced the principle that any third party who registered an interest at the outset of a planning application was officially recognised as part of the application process and granted certain rights, including the right to appeal the Authority’s decision without the need to prove a juridical interest. This was a big legislative step which reflected court judgments being meted out at the time.24 Another major change followed in March 2002, when the PA and the Environment Protection Department (EPD) were merged into a single Authority, christened as the Malta Environment and Planning Authority (the MEPA). In July 2009, government spearheaded another reform which was based on four pillars – consistency, transparency, efficiency and enforcement.25 As a result, the DPA was substituted with the Environment and Planning Development Planning Act (EPDA). The role of the PAB was taken over by the Environment and Planning Review Tribunal (EPRT) established under the new Act. It could be said that the term ‘review tribunal’ was rather a misnomer, giving the impression that the role of the said tribunal was limited to reviewing decisions when in actual fact, its role was that of an appellate tribunal having jurisdiction on both the merits and legality of Authority decisions. 22 Cassar, G., “2009b. Developing a New Planning System” in Cassar, G., “Planning Matters: A collection of essays and other writings”, 1985-2008, Malta 2009, p.199. 23 Paul Gauci, Structure Planning in the Maltese Islands: An Assessment of Contemporary Endeavours in the Establishment of a Policy-led Planning System in Malta, (University of Newcastle upon Tyne, 2002), 317. 24 Austin Attard Montaldo vs L-Awtorità ta’ Malta dwar l-Ambjent u l-Ippjanar decided on 20th August 1996 by the Court of Appeal (Superior Jurisdiction) - [434/1994]. 25 Office of the Prime Minister, A Blueprint for MEPA’s Reform (2009) <https://opm.gov. mt/mep> accessed 25th July 2009.
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During the run up to the Malta General Elections of 2013, the then Labour Opposition had pledged its intent on undertaking another major overhaul in the planning system.26 The core idea was to transform MEPA and set up two independent authorities instead – the Awtorita` għall- Ambjent u r-Riżorsi27 and the Awtorita` għall-Ippjanar u l-Izvilupp Sostenibbli.28 After a new administration was installed in March 2013, the planning portfolio was taken over by the Parliamentary Secretariat for Planning and Simplification of Administrative Processes within the Office of the Prime Minister. Notably, the remit of the Secretariat included the setting up of a new Authority for Planning and Sustainable Land Use29 to regulate development planning. On the other hand, the Ministry for Sustainable Development, the Environment and Climate Change was entrusted with the establishment of a new Authority for the Environment and Resources30 to serve as an environment regulator. In March 2014, the Parliamentary Secretariat for Planning and Simplification Processes published a consultation document entitled ‘For an Efficient Planning System’,31 paving the way forward for the setting up of a new Development Planning Authority which would be responsible for development planning together with building and sanitary regulations. The consultation document was followed by the publication of two Bills – namely, the Development Planning Act, 2015, which foresaw the establishment of a Planning Authority responsible for ‘sustainable planning and management of development’ and the Environment and Planning Review Tribunal Act, 2015, contemplating an independent tribunal, whose role was to ‘review’ decisions taken by the Planning Authority and the Malta Environment Authority. Subsequently, the Development Planning Act, 2016 and the Environment and Planning Review Tribunal Act were passed by the House of Representatives in December 2015.
26 Partit Laburista, Malta Tagħna Lkoll, Manifest Elettorali (2012) <http://3c3dbeaf6f6c49f4b9f4-a655c0f6dcd98e765a68760c407565ae.r86.cf3.rackcdn.com/082d10b0fed6c04d78ced4e7836e1dc11067452380.pdf> accessed 1st September 2018. 27 Authority for the Environment and Resources. 28 Authority for Planning and Sustainable Land Use. 29 As it was named in the consultation document issued by the Parliamentary Secretariat for Planning and Simplification Processes, For an Efficient Planning System – A consultation Document (Auberge de Castille, Malta, 2014). 30 ibid. 31 ibid.
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Although it is undeniable that different governments have put their efforts to improve legislation regarding development planning, there are still a number of legal gaps which are of concern to the author and other practitioners in the field. It can be said that these gaps are a direct result either of a failure on the part of the legislator to address given issues or of the legislator dealing with them however in an unclear or incomprehensive manner.
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Krista Ellul Employment and the Gig Economy
Dr Krista Ellul graduated as Doctor of Laws at the University of Malta in November 2013 and has obtained her ACCA qualification in December 2015. Krista is actively involved in corporate restructuring and M&A, and her main practice areas are commercial and corporate law, and employment law. Krista is a senior associate with David Zahra & Associates Advocates. Krista lectures the Business and Corporate Law Module (F4 ACCA Module), lectures on Maltese Employment Law with Lead Training Services and Company Law with the Malta Institute of Taxation. This article reflects her opinion at the time of writing, being October 2019.
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1. Introduction:
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hat is the gig economy? Upon googling the definition of the gig economy, one comes across the following definitions ‘a labour market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs’, and ‘working in the gig economy means constantly being subjected to last-minute scheduling’.1 On the other hand, the Google definition of the collaborative economy is ‘business models where activities are facilitated by collaborative platforms that create an open marketplace for the temporary usage of goods and services often provided by private individuals’.2 These economies have grown substantially over the last few years and this has opened questions to be answered: how should the workforce of companies operating within such industries be characterised? Are persons working within these growing economies, to be characterised as employees of companies with whom they are engaged to carry out services or shall they be deemed to be self-employed? Alternatively, is there some sort of status characterisation that falls between the two? In order to answer these questions it is imperative to understand whether the companies running collaborative platforms, such as Uber and Deliveroo for example, are seen to be the providers of the services being provided over the platforms (that is taxi services or delivery services) or whether they are seen to be simply as intermediaries. Companies often argue that their service/product is the collaborative platform which connects the service provider to the customer, and that therefore the taxi service or delivery service are not being provided by them. The relationship between the service providers and the platform operators, as well as the relationship between service providers and the platform operators with the customers need to be delved into deeper in order for such questions to be addressed. Companies forming part of this economy are striving to (often by engaging armies of lawyers) ensure that their arrangements with persons 1 ‘Definition of gig economy in English’ <https://www.lexico.com/en/definition/gig_ economy> accessed 28 August 2019. 2 European Commission, ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – A European agenda for the collaborative economy’ (2016) <https://eur-lex.europa. eu/legal-content/EN/TXT/?uri=COM%3A2016%3A356%3AFIN>
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Employment Law engaged by them to carry out certain tasks are characterised as self-employed persons. The crux of this exercise is for companies not to fall subject to all the obligations under employment law, which would result into numerous benefits having to be provided by the company to such persons – which would substantially increase company costs. The aforementioned benefits and responsibilities include vacation leave, sick leave, injury leave, maternity leave, birth leave, responsibility for their actions under tort, the obligation to collect and pass on taxes, payment of social security contributions, obligation to provide a detailed pay slip, adherence to non-discriminatory provisions, and payment of at least minimum wage. The number of benefits is significant, and it is therefore understandable that these companies are doing their utmost to be structured in a way that does not signify that persons who provide services over their platform are classified as their employees. Maltese law is silent and does not offer guidance as to how persons providing services over these platforms should be categorised. Their employment status is not the only lacuna at law as this is just one matter of unclarity; various other matters remain unaddressed. Firstly, the need for certain authorisations is questionable. With many of these new companies operating in traditional industries such as delivery, postage, cleaning and taxi services – the need for certain authorisations and licences is questionable. A prime example of this is a delivery company which delivers food – what standards must be upheld in this regard? Does the person who logs into an app for an hour or two on a Saturday night as available to deliver your Chinese take-out need to have applied as a food business/premises and undertaken a food handling course? When reading into the applicable Maltese laws in this regard, it seems that such requirements would apply to such persons – however, is this not an overkill? Moreover, would it be the company that would need to apply for such licenses/authorisations or each person who logs into the app? From my understanding, yes, there is the need for certain standards to be upkept however, the laws need to be kept proportionate and necessary for the purpose that they are serving. Legislators must delve into these laws and analyse whether the current laws are relevant for emerging industries. The second matter which requires clarification is that of liability. This has been addressed for certain industries under EU Law. Under EU law, it is clear that companies providing information society intermediary services, which carry out solely hosting services (their conduct being merely technical, automatic and passive), are exempt from liability for the information they 241
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store.3 One also questions the applicability of EU consumer and marketing laws – are these to be imposed on persons who perform one off taxi rides over a platform? In addressing these matters, one must keep in mind two points: the protection of the consumer on the one end (which is the purpose of these laws in the first place) and the proportionality on the other hand. Most collaborative platforms provide for certain trust mechanisms such as rating systems which aid the protection of consumers. The last issue that must be tackled is that of taxation (being personal and corporate tax, value added tax or social security contributions). The lack of a clear classification of persons providing services within such industries renders it difficult to determine their tax status and therefore who the taxpayer is, and what the taxable income is. Upon casting a critical eye on the applicable rules, rights and obligations of the players within this market, it is evident that there is a lack of clarity and uncertainty. These grey areas, affect both players in this industry as well as public authorities which may hamper the development of these industries and possibly result in the abuse of such grey areas in the law, thus going against the will of the legislator who was trying to protect public interest and safety. The growth of these industries renders clarification of these issues as more critical than ever before. Countries are slowly starting to legislate and address these issues accordingly, and courts are being called upon to give guidance on these matters. The scope of this article from here onwards is to delve into the employment status of persons providing their services in these industries, with specific attention to collaborative platforms.
2. The GIG Economy Firstly, the article is going to tackle the subject matter from a Maltese law perspective. Maltese employment law does not cater for this industry specifically, and neither has the Maltese Industrial Tribunal delivered any judgements in this specific regard as at the date of writing. Having said that, the law does shed some light in order to guide one into determining whether a person should be deemed to self-employed or employed, through The Employment Status National Order (S.L. 452.108). This legal notice includes 3
European Commission (n 2) 7.
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eight ‘tests’ and should five of the eight tests be satisfied one is presumed to be an employee of the entity at hand and would accordingly be subject to the same wage and conditions to that of a comparable employee. The eight tests are as follows: (a) he depends on one single person for whom the service is provided for at least 75% of his income over a period of one year; (b) he depends on the person for whom the service is provided to determine what work is to be done and where and how the assigned work is to be carried out; (c) he performs the work using equipment, tools or materials provided by the person for whom the service is provided; (d) he is subject to a working time schedule or minimum work periods established by the person for whom the service is provided; (e) he cannot sub-contract his work to other individuals to substitute himself when carrying out work; (f) he is integrated in the structure of the production process, the work organisation or the company’s or other organisation’s hierarchy; (g) the person’s activity is a core element in the organization and pursuit of the objectives of the person for whom the service is provided; and (h) he carries out similar tasks to existing employees, or, in the case when work is outsourced, he performs tasks similar to those formerly undertaken by employees.4 Moreover, the law stipulates that an employee may, prior to entering into an agreement to provide any services, request an exemption in this regard from the Director of Employment, who will issue such exemption if there are grounds to do so. Examples of such grounds as per law include when the activity being carried out is an uncommon occurrence or for a 4 Employment Status National Order, S.L. 452.108.
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very short duration. The law makes it abundantly clear that each scenario must be analysed on a case by case basis in order to assess whether a person providing services to a company would satisfy these conditions. A first rule to follow in this regard is that of substance over form; it is the actual arrangements that are in place in practice which are to be looked into and not the wording in the contract. It is practice for companies to carefully word their contracts in a way to ensure that the tests mentioned above are not met, however the test of the law applies with regards to actual working arrangements rather than any agreement. ‘Worker clarification always has been a legal determination and not a creature of contract or a matter of private agreement’.5 In some countries, such as Switzerland, it is interesting to note a contract is not necessary for obligations under employment law to kick in.6 This rule is also evident in case law with courts always looking into the reality of the arrangement over and above the contractual terms. Another grey area in relation to the gig economy and employment in Malta is whether a person providing services over a collaborative platform be deemed, in light of the above tests, to be an employee. The employment laws in place are not apt to clearly cater for the flexible working arrangements and so called ‘zero-hour contracts’ which are increasing in frequency and popularity. That is to say, even if persons providing services over such collaborative platforms are classified as employees under our law, our law is not equipped to cater for such arrangements. These issues include the problems when it comes to calculating one’s leave entitlement, social security contributions and other entitlements if employees are working under zero-hour contracts. Employees under these contracts may technically not work any hours but are still deemed employees of the company. The general understanding is to apply such benefits pro-rata as in the case of part-time workers, but this is not as simple in practice given the flexibility and unpredictability of working times. Insight has been provided through Transport Malta. The entity has recently recognised and addressed the fact that the current frameworks within the transport sector do not cater for standards to be followed by 5 Lucy Trevelyan, ‘The gig economy: a new global battleground’ (IBA News, 11 April 2018) <https://www.ibanet.org/Article/NewDetail.aspx?ArticleUid=CBA4C174-2A35-4E5F-A278 -9255C1C2577E> 6 Mark Freeland, Jeremias Prassl, ‘Employees, workers and the ‘sharing economy’ Changing practices and changing concepts in The United Kingdom’ (2017) 6(1-2) Spanish Labour Law and Employment Journal <http://doi.org/10.20318/sllerj.2017.3922> accessed 28 August 2019.
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drivers working within the collaborative economy. In September 2019, Transport Malta issued the Public Service Garage Reform for public consultation7 in order to regulate the registration and licensing of chauffeurdriven vehicles, vehicles for hire or lease, and operators of such vehicles. Two sets of regulations are being proposed: those governing chauffeur driven vehicles and another governing the rental of vehicles. Operator licences will be mandatory, and several requirements must be fulfilled to obtain the licence. Driver requirements have been introduced, including the requirement to undergo training and vehicle and service requirements have also been included. The proposals note the growth in the use of digital platforms and the challenges this is posing for policy makers and legislators to ensure safety of passengers together with recognising that service providers are operating on par with other traditional service providers. It is stated in such proposals that ‘such digital platforms will be required to either acquire an operator’s licence under the new regime and abide by all the licencing conditions, or serve as an intermediary booking service platform solely for licensed operators, and not for drivers – even if such drivers are professionally licensed’.8 In accordance with such proposals, intermediary service providers will still have certain obligations under the new regime, including the need to register as a transport booking service with the Authority, have an office in Malta at which they are to keep all information and ensure customers using the app service are given information on the operator with whom they are booking a service when using the app. Moreover, the need for drivers to be employed by the operator licence holder has also been extended to drivers providing services over digital platforms. This being proposed in order ‘to curb current practices where such platforms are marketing and offering their services to a new breed of ‘self-employed’ drivers who have no employment or contractual relationship either with the platform itself or with the operators whose permit the vehicles used are licensed’.9 It is to be noted that drivers can be employed by more than one operator. Therefore, it is clear that through these proposed laws the legislator is implying that the drivers must be employed 7 Ministry for Transport Infrastructure and Capital Projects, ‘Public Service Garage Reform’ <https://www.transport.gov.mt/PSG-Reform.pdf-f4142> accessed 11th September 2019. 8 Ministry for Transport Infrastructure and Capital Projects (n 7) 10. 9 ibid.
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by an operator. Looking outside of Malta, Californian legislators recently passed a bill which classifies all persons engaged with app-based companies as employees. This was despite the various attempts by such companies to be exempt or to strike some sort of mid-way deal (classifying the persons as workers and giving them certain rights). It is predicted that this bill is likely to increase costs of such companies substantially, and it will possibly result in a business environment where workers will not be as flexible with the companies, possibly having to rely on employees and pre-schedule their shifts.10 The main tests under this bill are twofold: does the company direct the tasks of the person it engages and whether the tasks carried out by that person form part of the company’s main business.11 On other fronts, Canada has introduced the term ‘dependant contractor’.12 Here the exclusivity is primarily examined in order to see whether a contractor is dependant or independent. Once one is defined as a dependant contractor certain specific rules would apply, specifically in relation to termination. On the other hand, in Texas and Alaska, drivers for services like Uber are, under certain circumstances, excluded from being classified as employees.13 Under EU law the essential feature of an employment relationship is defined as follows: ‘the essential feature of an employment relationship is that for a certain period of time a person performs services for and under the direction of another person in return for which he receives remuneration’. According to such definition the three essential criteria for an employment relationship to exist are (i) the existence of a subordination link, that is looking into whether the person acts under direction of someone else; (ii) the nature of work, that is the person providing the underlying service must be performing 10 Kate Conger, Noam Scheiber, ‘California Bill Makes App-Based Companies Treat Workers as Employees’ (The New York Times, 11 September 2019) <https://www.nytimes. com/2019/09/11/technology/california-gig-economy-bill.html> accessed 12 September 2019. 11 Kate Conger, Noam Scheiber, ‘California’s Contractor Law Stirs Confusion Beyond the Gig Economy’ (The New York Times, 11 September 2019 ) <https://www.nytimes. com/2019/09/11/business/economy/uber-california-bill.html> accessed 12 September 2019. 12 Trevelyan (n 5) 49. 13 Freeland and Prassl (n 6).
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an activity of economic value; and (iii) lastly the presence of remuneration.14 Lastly, in the US, the US Fair Labour and Standards Act defines a worker as someone who is ‘economically dependent’ on an employer, is one who has ‘suffered or permitted work’. This test typically consists of six related factors, which are: a) The extent to which the work performed is an integral part of the employer’s business; b) The worker’s opportunity for profit or loss depending on his or her managerial skill; c) The extent of the relative investments of the employer and the worker; d) Whether the work performed requires special skills and initiative; e) The permanency of the relationship; and f) The degree of control exercised or retained by the employer.15 On the other hand, the US courts then mainly focus on the economic reality test and ‘the ultimate question under this test is whether, as a matter of economic reality, the workers depend upon someone else’s business for the opportunity to render service, or are in business for themselves’.16 When analysing the above tests applied in different jurisdictions and in light of other studies it is abundantly clear that one of the main tests is the test of control. If the company is deemed to have control over the person then that person is inclined to be seen to be an employee. However, the question is: how much control is necessary for employment duties to attach? Within most of the tests mentioned above, one is left questioning what the parameters or rather thresholds are? How much dependence is necessary? What is deemed to be a substantial investment? Take the case of a taxi driver who buys a car, is that seen to be a sufficient investment, which would indicate that he is building his own business? On the other hand, take Uber, doesn’t the investment made by the company in setting up the company, as well as on technology, intellectual property and licensing 14 European Commission (n 2). 15 Jillian Kaltner, ‘Employment Status of Uber and Lyft Drivers: Unsettlingly Settled’ (Hastings Women’s Law Journal, 2018) <https://heinonline-org.ejournals.um.edu.mt/HOL/ Page?collection=journals&handle=hein.journals/haswo29&id=44&men_tab=srchresults> accessed 28 August 2019. 16 Trevelyan (n 5) 49.
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trump the investment made on cars by the drivers?17 Moreover, how much dependence is necessary – does one look into economic dependence or inequality of bargaining power here? In order to obtain a better understanding of the thresholds of the above tests, we will now delve into recent judgements which have tried to interpret this. Some of the seminal cases are those of the Uber judgements. Here the court reviewed the company’s business model and found that the taxi drivers providing taxi services over Uber’s app were workers (workers being an intermediate category entitled to some basic rights including minimum wage protection). This is despite Uber’s claim that they were not providing transportation systems but were in fact a technology services provider. The Tribunal in fact claimed that it is ‘faintly ridiculous’ to say that ‘Uber in London is a mosaic of 30,000 small businesses linked by a common platform’.18 The court found that Uber had too much control over the workers for them to be classified as self-employed. The court considered the influence the company had over the conditions under which the service was provided (for example the company determined the minimum fee), that the fees were received by Uber and then passed onto the drivers, that Uber controlled the drivers conduct through for example the rating applications (whom could also be excluded from providing services or logged off the app for a period of time), that Uber controlled the quality of the vehicles, and that Uber also indirectly controlled the hours the drivers worked by structuring it in a way that only persons whom Uber is their main activity will be able to work and also by rewarding persons who worked long hours.19 The courts also noted that the driver was only given the first name of the passenger, would only know of the destination once the passenger was collected and were not permitted to pass on their contact details to passengers. Moreover, the driver was also expected to follow the route suggested by Uber and would have to justify any deviances. 17 Brishen Rogers, ‘Employment Rights in the Platform Economy: Getting Back to Basics’ (The Harvard Law & Policy Review, 2016) <https://harvardlpr.com/wp-content/uploads/ sites/20/2016/06/10.2_7_Rogers.pdf> accessed 8 August 2019. 18 Uber B.V. and Others v. Mr Y Aslam and Others, [2018] EWCA 2748 [2017] A2 3467, para 137. 19 Massimiliano Delfino, ‘Work in the Age of Collaborative Platforms Between Innovation and Tradition’ (European Labour Law Journal, 2018) <http://www.islssltorino2018.org/wp-content/uploads/2018/09/Delfino-Massimiliano_Szymanski-Charles-Francis-Xavier_Work-inthe-age-of-collective-platforms_between-inovation-and-tradition.pdf> 348.
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On the other end, drivers who supplied and maintained their own vehicles, were permitted to work with other organisations and did not need to wear any company uniform. Having said that, such freedoms were nothing next to the controls the company had over them and it was evident to the courts that the drivers did not have the opportunity to build their own businesses. The court found that the drivers do not and cannot negotiate with passengers and were in a dependent work arrangement. Moreover, the courts also considered the fact that a driver was obliged to take on a job if they were logged into the app and in an area in which Uber operated - which showed that the drivers were at Uber’s disposal.20 The “ABC” test was introduced in the Dynamex case. This test requires the company to prove the following for the worker to be seen as an independent contractor: A. that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact, and B. that the worker performs work that is outside the usual course of the hiring entity’s business, and C. that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.21 The background of the term ‘worker’ was evaluated by the Court in the Pimlico Plumbers case.22 The term was introduced as ‘there were selfemployed people whose services were so largely encompassed within the business of others that they should also have limited protection, in particular against discrimination but also against certain forms of exploitation on the part of those others’.23 The court also looked into the current definition of the term worker at law, which includes: (a) An employee under a contract of service; 20 ibid 350. 21 Nathalie Whitson vs. Lyft inc [2018] 3:18-cv-06539, para 24. 22 Pimlico Plumbers Ltd and another v Smith [2018] UKSC 29, [2018] EWCA 51. 23 ibid, para 9.
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id-dritt (b) An individual who has entered into or works under any other contract … whereby the individual undertakes to … perform personally any works or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any professional or business undertaking carried on by the individual.24 Reference was also made to the definition of worker in the Treaty of the Functioning of the European Union, which in Allonby v Accrington and Rossendale College (Case C-256/01) interpreted the terms workers to mean persons who perform ‘services for and under the direction of another person in return for which [they receive] remuneration’ but excluding ‘independent providers of services who are not in a relationship of subordination with the person who received the services’.25 The court then went on to examine whether the persons claiming they were workers fell within the definition of workers. It was first questioned whether they performed the services personally, and therefore the court examined their right to delegate/ substitute themselves at their own will. It was questioned whether ones right to substitute one’s self under a contract, if only limited or occasional, would mean that this requirement would not be fulfilled, or whether it is enough if just part of the services needed to be performed by the person personally.26 In this case, it was noted that Mr Smith was allowed to be assisted in the job, and was allowed to substitute himself in the case that from his end another job came up. However, in such case Mr Smith had to substitute himself with another Pimlico worker, and with the consent of the company and therefore such right was seen to be limited. In this regard, the judge concluded that ‘the right to substitute another Pimlico operative did not negative Mr Smith’s obligation of personal performance. She held that it was a means of work distribution between the operatives and akin to swapping of shifts within the workforce’.27 It was noted that in other cases focus is made on what the dominant feature of a contract is, and in fact in the case of Mirror Group Newspapers 24 ibid, para 10. 25 ibid, para 4. 26 ibid, para 22. 27 ibid, para 2.
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Ltd v Gunning, focus was made on the fact that the contract did not require personal performance but required the carrying out of the job efficiently. It was argued that although looking into the dominant feature of the contract may help determine the relationship between the person and the company, it is seen to be important to delve deeper and look into the requirement of personal performance.28 Lastly, in this regard the court looked into the wording of contract entered into with the company and noted that all obligations were addressed to Mr Smith. The Court then questioned whether Mr Smith was a customer or client of Pimlico, and in order to address this question looked into the contractual obligations the parties had towards each other when it came to offering and accepting work. It was clear that once Mr Smith took on a job with Pimlico, he was contractually obliged to carry out that work. It was noted that although the contract entered into between Mr Smith and Pimlico stated that he was under no obligation to accept any work, the manual Mr Smith had to also abide by laid down minimum working hours and times. The Court referred to tests which arose from different judgements: 1. Judgement of Langstaff J, sitting with others in the appeal tribunal in Cotswold Developments Construction Ltd v. Williams [2006] IRLR 181, para 53: a focus upon whether the purported worker actively markets his services as an independent person to the world in general (a person who will this have a client or customer) on the one hand, or whether he is recruited by the principal to work for that principal as an integral part of the principal’s operations, will in most cases demonstrate on which side of the line a given person falls.29 2. Judgement of Lord Clarke in the Hashwani v Jivraj [2011] UKSC 40, [2011] WLR 1872, Supreme Court: whether, on the one hand, the person concerned performs services for and under the direction of another person in return for which he or she receives remuneration or, on the other hand, he or she is an independent provider of services who is nor in a relationship of subordination with the 28 ibid, para 32. 29 ibid, para 44.
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person who receives the services.30 3. Decision of the Court of Justice of the European Union FNV Kunsten Informatie en Media v Staat der Nederlanden (Case C-413/13) [2015] All ER (EC) 387: a service provider can lose his status of an independent trader … if he does not determine independently his own conduct on the market, but is entirely dependant on his principal, because he does not bear any of the … commercial risks arising out of the latter’s activity and operates as an auxiliary within the principal’s undertaking. It follows that the status of ‘worker’ within the meaning of EU law is not affected by the fact that a person has been hired as a self-employed person under national law, for tax, administrative or organisational reasons, as long as that person acts under the direction of his employer as regard, in particular to freedom to choose the time, place and content of his work …, does not share in the employer’s commercial risks … and, for the duration of that relationship, forms an integral part of that employer’s undertaking, so forming an economic unit with that undertaking (...)’31 Pimlico tried to argue in this case that Mr Smith was entitled to reject work, was free to take outside work, and that the company did not interfere/ supervise his work. Moreover, they argued that he had an element of risk as he was bound by the quote he gave the client and did not get paid unless the client paid. On the other hand, Pimlico had controls over Mr Smith - he had to wear a branded uniform, his van was to be branded and tracked, he had to carry a company identity card and follow instructions given by the company. There were also controls on what he was paid and when. All these factors pointed towards him not being seen to be an independent contractor. Lastly, I will delve into the Citysprint case,32 in which case the Court studied the relationship between Citysprint and a cycle courier, who claimed she was a worker. The Court considered the fact that one had to undergo a two-day recruitment process and training, as well as enter into a nonnegotiable tick-the-box contract with Citysprint in order to be able for the courier to provide its services over Citysprint’s platform. The court went on 30 ibid, para 45. 31 ibid, para 46. 32 Ms M Dewhurst v Citysprint UK Ltd [2016] 2202512.
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to look into how the services were to be performed and it was noted that the courier had no discretion as to how the services were to be provided. It was noted that the courier had to give her availabilities to the company and generally logged into the app early morning and then at night, with little time between assignments and informed the company before logging out. The way the company worked was if workers were rarely available to work on a regular basis, they were not seen to be part of the team (most worked 4-5 days a week). In fact, most of the workers talked of work as days and not hours. It was noted if one differed from their usual pattern, they would discuss this with controllers, and on certain occasions persons were even asked not to take a holiday given the company needed them to work during those days. The company also implied persons should work for at least three days a week to make it worthwhile for the company from a management point of view. The information booklet also states that should a courier reject work for five times in a row, they would be disengaged by the company. Once workers were logged onto the system, they were expected to take on any jobs assigned to them. One time the courier felt unwell, asked whether she could go home, and was told she couldn’t as there was no one else for the job. She took on the job and stayed as she felt she was obliged to given in her eyes she was working for the company. Through analysing such facts, it was evident to the court that the company exercised control over the working time and pattern of the couriers. The Court also considered that the couriers were paid per job, one week in arrears and this was calculated through a self-billing system with no interaction from the courier’s end. They wore a uniform and were provided some tools for which deductions were made from payments due to them. The Court then looked into when the couriers had the right to substitute themselves and it was noted that reference was made to ‘our couriers’ and that the couriers did not have the right to substitute as the substitution clause was written in such a way that it was only couriers who were already on an assignment who could be substituted. Moreover, the complexity of the job allocation and payment did not lend to the couriers being able to substitute. It was noted that when the courier had asked for someone to substitute her, her request was turned down. Furthermore, the courier at hand did medical courier work, which work Citysprint was bound 253
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by a contract to provide and by means of which contract, Citysprint would be in breach should the courier be allowed to substitute herself. Lastly, it was noted that couriers could only be released from a job on a reasonable request, and no one could bring forward proof of when this was ever done. In making conclusions, it was noted that the bargaining powers of the persons entering into the contract for service needed to be taken into consideration. In such case, it was evident that the bargaining power was not in any way as equal as it would have been should the parties entered into a normal commercial contract. It was stressed that this is a matter that always needs to be kept in mind when looking into the terms of contracts entered into, and that moreover that such terms may not reflect what happens in practice. The Court also concluded that the courier was contracted to perform a personal service. The judge stated that ‘The legal test is not whether there is a valid substitution clause but whether the claimant was contracted personally to carry out the work’.33 One needs to look in whether the dominant feature of the contract was the personal service, or whether it was a particular outcome. In concluding whether Citysprint was a client or customer of the courier, the judge noted that there are two kinds of self-employed persons – those that carry out the services on their own account for their clients and customers, and others who carry out the services on behalf of a business run by someone else.34 The judge agreed that the courier was an integral part of Citysprints business, and that she was working on behalf of the Company this mainly based on the fact that the courier was: 1. 2. 3. 4. 5.
Expected to work when they say they will. Directed throughout the time that they are on circuit. Instructed to ‘smile with your greeting’ and wear the uniform. Told what to do if the parcel cannot be delivered as instructed. Told when they will be paid and paid according to the respondent’s formula after it has made deductions. 6. Told that they are part of the ‘family’ who the respondent describes as ‘our couriers’ on many occasions.35 A common factor in all these cases is that the courts did not find 33 ibid, para 71. 34 ibid, para 75. 35 ibid, para 78.
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them to be full employees, but rather self-employed persons entitled to basic benefits, that is falling within definition of workers. Claims for full employment status were interestingly not made or upheld. Such workers were only given the core basic rights and therefore would continue to experience certain disadvantages of such contracts including low income and unpredictable shifts, as well as unguaranteed work.36
3. Conclusion: Following the study of the different tests and cases in relation to determining that status of persons providing services over such platforms, it is clear that ‘It is the ambiguity between bi-partite and tri-partite classification systems which has come to have a crucial bearing upon the application of employment law to the on-demand economy’.37 A balance needs to be struck between individuals being seen to be employees on the one hand and being seen to be self-employed on the other hand. These businesses are structured in a way where persons engaged with/by them are given more freedom, in one way or another, when compared to traditional employees and therefore it would not be seen to be fair or proportionate for the company to be obliged to comply with all employment laws. It would possibly be an overkill and therefore not entirely possible for businesses structured in such way: that is having some persons only working for a couple of hours, being subject to all rights and obligations under employment law. At the same time these persons would usually not be totally free to work and carry out the services as they wish and please, being subject to many controls introduced by such entities (as seen from case law) and therefore for this reason such persons should be entitled to certain benefits and rights. The concept of a worker under English law seems to be the closest fit to such in-between category, giving employees certain minimum protections. The inclusion of such third category of worker introduced a ‘... category of worker to include not only employees as traditionally defined but also those working under semi-dependent or economically dependant 36 Freeland and Prassl (n 6). 37 Freeland and Prassl (n 6).
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personal work contracts’.38 Workers are seen to be self-employed persons but not working on their own account. Another in-between measure could possibly be the concept of ‘portable benefits’, that is individual persons providing services being able to buy-into benefits such as unemployment insurance, workers compensation plans and the like. Most persons who work within the gig economy would say they find themselves torn, on the one hand wishing to be classified as an employee in order to benefit from all the benefits and rights under employment law and on the other hand do not wish to lose their status as independent contractors due to the flexibility that comes with such status. Having said that, certain companies have been structured in such a way and introduced so many controls over the persons offering services over their platforms that such flexibility is nearly not present and therefore in such cases it is clear on which side of the fence the persons working over their platform fall into. Defining all persons providing the services over such apps as employees would probably lead the so-called workforce of the gig economy having to be reorganised, with persons having fixed shifts and being required to work for a number of hours. It would not be worthwhile for such companies to have such persons on their books (and provide them with all benefits and rights under employment law) for them to then be able to work as they wish and please and possibly only for a couple of hours here and there. The cost would definitely outweigh the benefit, and this can be clearly seen by Uber’s reactions to the recent introduction of laws in this regard in California. The gig economy gives many flexible work opportunities for persons and it is therefore important that such industry is developed properly and that laws cater for such growing industry. It is essential for countries to ‘assess the adequacy of their national employment rules considering the different needs of works and self-employed people in the digital world as well as the innovative nature of the collaborative models; provide guidance on the applicability of the collaborative economy’. 39 Lastly, it is important to note that legislating the ‘gig economy’ would not exactly stop there – defining the employment status of such persons would have widespread implications on other more traditional forms of businesses which have been structured in a certain way for ages such as real estate agents. 38 Freeland and Prassl (n 6). 39 European Commission (n 2) 13.
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Frances Camilleri-Cassar Leave policies and legislation in Malta: How gender equal?
Dr Frances Camilleri-Cassar is the first woman appointed as Full Professor in the Faculty of Laws, University of Malta. Her research interests centre around gender, social policy, and equality law. She has published widely, and her most recent is a monograph entitled: Academic Research Methods for the Law Student: a practical guide, Faculty of Laws, University of Malta.
id-dritt The study gives a direct insight into Malta’s leave policies through unravelling reactions and experiences of a purposive sample of graduate women. Parental leave is unpaid and creates a gender divide as it is taken up largely by women. In parallel, it also creates a sector divide as most care policies exclude those outside of Malta’s public sector. Men’s needs as fathers, as a social issue for leave policies, never feature in political discourse, and have come nowhere close to hitting the political agenda. The reality is that care leave schemes in Malta are based on traditional assumptions associated with motherhood and women’s responsibility to accommodate family obligations around their employment, while the gendered structure of society remains untouched. Women’s voices suggest that Malta’s long and unpaid parental leave is often synonymous with career regression and eventual financial dependence on men. Leave policies that offer no compensation for loss of earnings hinder the equal sharing of care responsibilities and perpetuate gender inequality both at home and in the labour market.
1. Introduction
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ow much do leave policies in Malta assume that men and women both need time to care, as well as for paid work? To what extent do Malta’s leave benefits allow time for the equal sharing of care responsibilities between women and men that, in turn, enhance gender equality in the workplace and domestic sphere? For example, does unpaid parental leave help change or strengthen a traditional gender arrangement? More specifically, to what extent does parental leave support women and men in the equal sharing of time between economic activity, career advancement and family life? The question that concerns this study is the extent to which Malta’s care policies promote gender equality in employment between women and men. It explores care benefits that discriminate between the public and private sectors, such as the five-day paternity leave for fathers in the public sector, and the one-day leave for men who make up the rest of the labour supply. It also investigates the current state of affairs in terms of the take-up of parental leave and the career break in the public sector; no comparative data exists for private sector employees. Through the voices of Maltese women, the 258
Employment Law study also addresses their concerns about employment, career regression and economic dependence on men resulting from long and unpaid care leave.
2. Parental leave The EU Directive (96/34/EC) on parental leave, in force since 1996, is part of a larger EU policy agenda that embraces the promotion of gender equality through the reconciliation of employment and family responsibilities1. As part of EU commitment to gender equality, the Directive obliges Member States to introduce legislation that enables parents to care for their child for a period of three months. The Directive specifies no requirement about payment. ‘Central to this agenda has been the view that gender equality involves both greater participation by women in the labour market and greater participation by men in family responsibilities, and that a range of measures can and should be taken to promote these ends’.2 The father’s quota, which is part of the parental leave scheme introduced in Scandinavian policies in the mid-1970’s, ‘signals a new approach to fatherhood and gender equality’ and represents an effort to influence the gender arrangement in the home and at work3. For example, in 1993, Norway established the right for fathers to an equal share in parenthood and in the care of very young children. A special month of ‘daddy days’ was, shortly after, introduced in Sweden in 1995. Men’s rights to care are recognised in law and policy, and Swedish fathers are encouraged to take parental leave which is non-transferable and lost to the family if not taken. Consequently, men can make a stronger case when facing employers and workmates with their claims to care for children4. While policy for working parents in Sweden is regarded by international standards as generous and important for promoting gender equality, Bjornberg5 seems sceptical of the benefit. In examining Swedish policy and gen1 Peter Moss and Freddy Deven , ‘Parental Leave in Context’ in Peter Moss and Freddy Deven (eds.) Parental Leave: Progress or Pitfall? (NIDI/CBGS Publications 1999). 2 ibid. 3 Leira, A., ‘Cash-for-child care and daddy leave’ in Peter Moss and Freddy Deven (eds.), Parental Leave: Progress or Pitfall? (NIDI/CBGS Publications 1999). 4 Helena Bergman and Barbara Hobson, ‘Compulsory fatherhood: the coding of fatherhood in the Swedish welfare State’ in Barbara Hobson (ed.), Making Men into Fathers: Men, Masculinities and the Social Politics of Fatherhood (Cambridge University Press 2002). 5 Ulla Björnberg, ‘Ideology and choice between work and care: Swedish family policy
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id-dritt der equality in work and family life, she argues that it is taken for granted that women and not men take the lion’s share of parental leave, and that the effects of parental leave on gender equality are not very great. ‘The parental leave package ... constitutes a risk factor for women, since some employers tend to dismiss or downgrade women because of the perceived risks of pregnancy and parental leave’6. Today, Iceland boasts the most developed and effective policy that entails a three-by-three system of a three-month entitlement for the mother, three months for the father, and another three months for sharing between them.7 However, Castro-Garcia and Pazos-Moran8 voice their disquiet with leave sharing, and argue that despite advanced legislation in the Nordic countries, the length of transferable leave makes it difficult, in practice, to achieve full gender equality.
3. What is known about care leave measures in Malta? In Malta, six weeks after parturition and eight weeks before or after are reserved for the mother, as obligatory. Moreover, the mother is obliged to take six weeks following the birth. There is no ceiling on payment, and leave is funded by the employer. A further period of up to four weeks may be taken immediately after the take-up of the statutory fourteen weeks, and which carry a flat-rate payment equivalent to the statutory minimum wage. The four-week leave, which is not obligatory, is funded by government. Public service employees in Malta have the most far-reaching leave arrangements, compared with those in private sector, concerning child and other familyrelated tasks, such as responsibility leave to care for elderly parents, disabled children and spouses. Indeed, the time-to-care leave scheme in Malta’s public service combines maternity, paternity, parental and a career break, which are benefit entitlements that, to date, are not enjoyed by private sector employees. For instance, employed parents in Malta’s public sector are entitled to shared leave of absence for one year, for each child under five years, and a one-off five-year career break, while retaining job security and rights to seniority and promotion. However, no wage compensation is attached to the benefit. A study of the Shared Parental Leave Policy introduced in the for working persons’, (2002) 22(1) Critical Social Policy 33. 6 ibid 48. 7 Gillian Pascall, Gender Equality in the Welfare State? (Policy Press 2012). 8 Carmen Castro-Garcia and Maria Pazos-Moran, ‘Parental Leave Policy and Gender Equality in Europe’, (2016) 22(3) Feminist Economics 51.
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Employment Law UK in 2015 finds that the most frequently reported barriers to the take-up were financial reasons and risks to the partners’ career, highlighting the importance of adequate leave remuneration9. Indeed, there is consensus in the literature that in countries with gender-neutral leave policies and shared parental leave, which carry no compensation for lost wages, these have not been much in demand by fathers. Although parental leave has some potential to change Malta’s gendered arrangement between paid and unpaid work, the entitlement is generally taken up by mothers. Maltese fathers who take advantage of these benefits are still a marginal group. Duvander10 suggests that the key determinant of the length of leave taken by mothers is family responsibilities, whereas it is the economic dimension of work that influences the duration and take-up of leave by fathers. For example, data that draws on Malta’s Office of the Prime Minister Standards and People Division point to a disproportionate use of parental leave by women and men in the public sector. In 2018, fathers’ take-up rate of a one-year unpaid parental leave was three per cent of total number of beneficiaries. In parallel, men’s share of an unpaid five- year career break was a low six per cent of total number of beneficiaries. However, such data are hardly surprising. In view of men’s higher earnings, and the overwhelming reduction in family income if fathers were to stay at home with their children, men are unlikely to take leave, unless it is paid11. A more recent study of why British fathers do not take up their leave benefits finds that financial compensation for lost earnings remains the key determining factor12. In view of Malta’s legislation for the promotion of gender equality, to what extent have parental leave schemes in the Maltese public sector enhanced men’s rights as carers, and their role as fathers? Has parental leave been instrumental in changing the traditional gender arrangement by uprooting the gender divide to a fairer division of paid and unpaid work? I argue that while State policies may be seen as enabling gender equality in the progression of careers, in practice, they are trapped in the traditional way. 9 Katherine Twamley and Pia Schober, ‘Shared Parental Leave: Exploring Variations in Attitudes, Eligibility, Knowledge and Take-Up Intentions of Expectant Mothers in London’, (2019) 48(2) Journal of Social Policy 387. 10 Ann-Zofie Duvander, ‘How Long Should Parental Leave Be?: Attitudes to Gender Equality, Family, and Work as Determinants of Women’s and Men’s Parental Leave in Sweden’, (2014) 48(2) Journal of Family Issues 387. 11 Peter Moss and Freddy Deven , ‘Parental Leave in Context’ in Peter Moss and Freddy Deven (eds.) Parental Leave: Progress or Pitfall? (NIDI/CBGS Publications 1999). 12 Gayle Kaufmann, ‘Barriers to Equality: why British fathers do not use parental leave’ (2018) 21(3) Community, Work and Family 310.
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id-dritt Additionally, Malta has an employment sector divide. For instance, workers in the private sector have the right to three months unpaid, nontransferable parental leave. However, as there is no statutory entitlement, the benefit remains at the discretion of the employer. Following a critical analysis of Malta’s CEDAW report, the UN Committee on the Elimination of Discrimination against Women drew up a list of key areas of concern and recommendations, one of which was expressly pointing to insufficient opportunities for parents engaged in the private sector, to balance their employment and family responsibilities. In 2015, government introduced the Maternity Leave Trust Fund as a means of addressing discriminatory practices against the employment of women. The Fund obliges all private employers to pay a contribution to the state’s coffers for the reimbursement of maternity leave salaries in the private sector. It comes as no surprise that a ten-day paternity leave for fathers, based on the 2019 Work-life Balance Directive by the European Parliament and Council of Ministers, was shot down by Maltese employers.
4. Method of research The study asks about Malta’s parental leave and its implications for legislative measures in gender equality. It engages with voices of a random purposive sample of thirty-nine Maltese women between the age of twenty-eight and thirty-eight years, through in-depth, face-to-face, semi-structured interviews. The primary criteria for the sample of study respondents were partnered heterosexual women, with a tertiary level of education, living with a spouse and dependent children. Degree courses and specialist training undertaken by the study participants include dentistry, mechanical and electrical engineering, architecture and civil engineering, medicine and surgery, law, pharmacy, science, teacher education, commerce, marketing, accountancy and the arts. Arguably, graduate women present a strong test case for an exploration of the impact of Malta’s parental leave and the employment of mothers with dependent children: they are the better-educated, have wider access to employment opportunities, and would likely have had a clear career path in mind. The existing reality of other groups of women among the lower income and working-class couples in Malta, with fewer resources at their disposal, would necessitate further research. Full transcription of recorded data was analysed to identify themes, 262
Employment Law through the qualitative approach. Respondents chose their own pseudonym to protect anonymity. My argument in defence of adopting a qualitative method of approach is this: if I were to adopt a quantitative mode of inquiry, associated with objectivity and statistics, would numbers have told me of Nikki’s ‘big shock!’ during her unpaid parental leave as a medical doctor, when she experienced financial dependence on her husband for the first time in her adult life? She says, ‘I think that’s the biggest shock, ending up not even having one cent which really belongs to me!’ Would quantification have allowed me to hear Jade express that, ‘an important part of me has died, the engineer part of me has died, and I feel really bad!’ after she resigned from her full-time employment as an electrical engineer, to take up uncompensated parental leave? Numbers talk to the extent that both Nikki and Jade would have been a statistic in the parental leave data table. Additionally, I could easily have interpreted their parental leave take-up as reflecting a progressive welfare state. In the contradictions women face, the reality is that both these voices draw strong implications for Malta’s traditional gender regime and its leave policies. I argue that there are aspects to women’s lives that cannot be preknown or pre-defined by a quantitative method of research.
5. Parental leave: what are the implications? To what extent do Malta’s policy initiatives adhere to equality legislation between women and men? For example, are entitlements to unpaid leave schemes a practical option for Maltese fathers? Respondents in the study argue that if their husband were to take time off to stay at home with their children, the family income would be drastically reduced. It is unlikely that men will spend time in caring responsibilities with no compensation for foregone earnings. Indeed, official data point to a disproportionate use of parental leave by women, while fathers’ employment remains untouched by their transition into fatherhood. For instance, respondents share similar views when I ask: to what extent would men use their parental leave entitlement? Katia, a virologist says: Very few, I think ... and those who do, use it for themselves ... personally ... I mean ... they’d have some part-time work ... I am sure
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id-dritt ... or I am not sure, let me put it this way ... but I know many men who applied for parental leave so as to do some private work ... I mean, at the back of their mind ... I think a man would find it harder to ... I think the thought behind it would be for him to do something else during that time ... Similarly, Claire a paediatrician concurs: I think men do take parental leave ... emm ... but as I told you ... some use it for other things ... for trying out a different job ... I mean ... there is abuse ... and maybe that is why parental leave is frowned upon, you see? ... but yes, there are some men who apply for it ... While unequal shares of domestic responsibilities negatively impact women’s job retention and career progression, women’s voices suggest that leave policies in Malta are offered in a manner that does little to encourage men’s care-giving and to promote gender equality. Men will not be drawn to policies without compensation for lost wages. Essentially, it rests with the State to address what is expected of men by placing it firmly on policy agenda together with an individual entitlement to high remuneration for lost wages.
6. Parental leave: an equal right to care? The right of parents to take care of their children at home does not correspond to an obligation for Maltese employers, particularly those in the private sector, to grant leave from employment, and a right to return to the job. Workplace culture and structure are based on assumptions that the ideal worker should prioritise work above any family responsibilities13. Indeed, the women in the study signal that, irrespective of children’s presence and family obligations, employers still expect a full-time attachment to the job. Home and family are considered a private matter, and outside employers’ responsibility. The voices of the women in the study seem to reflect traditional gender expectations that influence workplace culture to the extent that parental leave is often negotiated with the employer on a one-to-one basis, especially where no such leave is included in the collective agreement. Moreover, 13 Linda Haas and Philip Hwang, ‘Policy is not enough: the influence of the gendered workplace on fathers’ use of parental leave in Sweden’ (2019) 22(1) Community Work and Family 58.
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Employment Law Moss and Deven14 argue that ‘existing inequality also gives fathers a more powerful voice than mothers in family negotiations about the use of leave, and contributes to a situation where it may seem self-evident that the mother should take all the leave’. For example, Rose is a qualified electrical engineer who now describes herself as a full-time housewife. During her pregnancy, and as Rose was climbing the career ladder, her husband ‘encouraged’ her to resign from paid work, ‘so as to be able to rest’. As a private sector employee, she had no entitlement to care leave other than the statutory maternity leave. She contends that parental leave in the public sector would be ‘ideal’ as it allows the mother to look after her child until school age, and return to ‘some kind of economic activity, maybe part-time or a half-day job’. I interviewed Rose at her home, and in the presence of her husband who insisted that he must listen to the interview. Both before and during the interview with Rose, I could observe strong male influence on the respondent’s decisions, and a traditional gender arrangement in the home. She says: I think family-friendly policies are always helpful ... they are an opportunity for those who want to continue working ... there is a scheme ... I’m not sure who it applies to ... that scheme where you can stop for some time ... a year or something? ... then you can go back ... that is good ... I did not apply for maternity leave because I had no intention of staying at work, but for those who have the five-year parental leave it is good ... the first five years of a child’s live are the most crucial ... so after five years you can do some work ... maybe some part-time or half-day. Gabrielle qualified in management. She makes up for the care leave deficit in the private sector by using her entitlement to vacation days immediately after the end of the statutory maternity leave. She claims: Emm... I think they’re very good measures especially for those in the public sector as it would have solved a lot of my problems ... but as I am working in a private business, if I go on leave ... for long leave ... they would have to employ somebody else ... so then if they employ somebody else, I’m out ... 14 Peter Moss and Freddy Deven , ‘Parental Leave in Context’ in Peter Moss and Freddy Deven (eds.) Parental Leave: Progress or Pitfall? (NIDI/CBGS Publications 1999).
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id-dritt Brenda too is in private industry, and works full-time as a human resources manager. However, unlike Gabrielle, she returned to work when her maternity leave was up. She emphatically says, ‘I could do that because I have my mother’s support!’ Interestingly, as an HR manager, Brenda’s views on leave schemes for care reflect employers’ perspective: Parental leave? ... I think it’s good ... but we don’t have that in private industry ... forget it! ... that’s excellent! ... but then, let’s put it this way ... you can’t ... now I’m talking from the perspective of private employment ... you can’t expect to pay somebody who is not giving you anything ... you’re just keeping his place ... it’s impossible ... you’d have to employ somebody on a definite contract ’cause you’re not going to send the person out ... then it would be a problem ... there’s a lot of work involved ... it’s not that easy to do. Raquelle is an architect who works full-time for a private firm. As she is not entitled to care leave, her mother looks after her daughter. Raquelle voices her views on parental leave: I think that such policies are very positive, but unfortunately they apply only to persons working for the government ... for example, we have no parental leave ... we do not enjoy the same benefits as those working for the government ... in our case, we rely on the benevolence of the manager above us ... now, very often ... unfortunately ... you find that our managers are still the men ... forty- fifty-year olds ... so their attitude is old-fashioned ... I’m not saying they don’t help, you know ... when I asked for maternity leave they immediately gave it to me ... but I know others who were not given it ... it is very subjective ... I have no parental leave, no ... and the most they might allow are six months unpaid leave ...
7. Parental leave: a path to career regression? Catherine works full time as a qualified geneticist. She argues that family-friendly measures do not always facilitate women’s participation in the labour market, and that unpaid parental leave is detrimental, rather than advantageous, to a woman’s career. Her response illustrates the point: ... parental leave? ... the option to take 5 years? ... I used to think I would take that ... but when I came to it ... I mean, this is the time 266
Employment Law when my career is ... emm ... gaining momentum ... you know? ... and to stop for 5 years it was just not the right time, career wise ... I mean, in 5 years I’d become outdated in my field ... I’d have lost all I studied for during the last 10 years ... and ... emm ... the fact that it is unpaid also matters ... I would not have been able to do it financially ... so there are two things ... career wise and financially ... Corinne is a full-time gynaecologist, and pregnant with a second child. She aims to achieve the post of consultant in Malta’s state hospital. However, she seems convinced that care leave will prove detrimental to her career advancement: ... I would like to proceed to the consultant grade ... eventually ... but it seems unlikely that that will ever happen ... at this stage of my life I will probably take maternity leave or unpaid leave ... that would mean I will be pushed down the career scale ... emm ... I am going to take maternity leave ... that’s for sure ... whether or not I’ll take a year unpaid is still debatable ... I’m still trying ... if ... if possible, I will try to avoid it ... it will definitely affect my career progression ... you cannot ignore the fact that being away from the department for 3, 4, 5 years ... I mean ... when it comes to career advancement ... you know?
8. Gender equality in unpaid parental leave? In many respects, there seem to be some contradictions, at policy level, in Malta’s parental leave benefit. For example, does not unpaid parental leave perpetuate a traditional gender regime? Does not women’s overwhelming take-up of parental leave reaffirm a gendered domestic division of labour, and women’s dependence on men? Does not the gender wage differential automatically predispose women and not men to unpaid parental leave? Bussemaker and Kees van Kersbergen15 signal that ‘a possible loss of earnings as a consequence of parental leave easily extends the inequality between men and women on the labour market, because the earnings of men are not interrupted’. Alternatively, unpaid parental leave may cause financial hardship to those who cannot afford to live on one breadwinner income. 15 Jet Bussemaker and Kees van Kersbergen, ‘Contemporary Social-Capitalist Welfare States and Gender Inequality; in Diane Sainsbury (ed.), Gender and Welfare State Regimes (Oxford University Press 1999).
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id-dritt Lorraine, who graduated as a chartered accountant, has had to shift her career to teaching so as to keep up with her family responsibilities. She says: ... family friendly measures are very good ... very good ... but the fact that parental leave is unpaid ... I know some who could not take it because they needed the money ... they had many expenses ... but I don’t think it can be paid ... I mean ... if we’re staying at home ... it would be cheeky of us to expect to be paid as well, do you understand? During the time of the study, Charlotte was working reduced hours as a pharmacist, and describes the implications of uncompensated parental leave as follows: ... yes, yes, it was a big problem, yes ... in the beginning ... emm ... I mean, the first few months after I had the baby ... when I stopped getting the pay ... it was very, very tough ... I mean ... I admit ... yes ... there were times we could barely cope (brief laughter) ... but then, I mean ... would they consider paying me for so many years? ... yes, it was very ... in fact, that’s why I went back to work during my parental leave ... that’s why ... I know I shouldn’t have done that, it’s illegal … but what else could I do? Francesca, who works in private industry as a mechanical engineer, was forced to exit the labour market as she was not entitled to parental leave. She claims that it would not have mattered to her that parental leave is unpaid, as she relies on her husband’s income. She says: Parental leave is a positive thing because then you can go back when the child starts school ... but in our case it is not applicable [in the private industry] ... I had to resign ... Moreover, Claire, a full-time paediatrician, says that parental leave in Malta is commonly frowned upon, and perceived by employers as a nonessential benefit: … if you are applying for parental leave, you get frowned upon a little bit, you know? ... it’s not something that’s been accepted … there’s been abuse with this parental leave business, you know what I mean? To what extent are Malta’s policymakers aware that parental leave policies 268
Employment Law may be to women’s disadvantage when their husband enjoys no similar benefits? For example, Audrey, who graduated as an architect and was on unpaid parental leave during the time of the study, says that her husband, who works in the private sector, is not eligible to such leave: I did not stop work because I wanted to ... the fact that I work for the government makes it easier for me to stop ... my husband works in the private sector so he has no options ... they have no parental leave ... so it was obvious that I was the one who had to stop not he ... The voices of the women in the study seem to suggest that despite legislative measures and rhetoric from the top, leave policies are drawn up with women in mind and are offered in a manner that do little to promote gender equality.
9. Conclusion The study’s major contribution to knowledge is an understanding of the nature of Malta’s gender equality legislation, its assumptions about gender roles, and the consequent limitations of its parental leave policies. There appears to be a deeply ingrained set of cultural assumptions, structures and obligations that spill over into relationships within the bureaucracy, such that government policies are blunted in their effect. Indeed, the strong pressure to the legacy of the male breadwinner and prevailing gendered stereotypes of society are embedded not only in Maltese culture and its social norms, but also in the State’s own social policy. The findings further imply that while Malta emulates a progressive gender equality agenda forged under EU standards, the experience of Maltese women at work and in the family has remained the same. The majority of careleave takers in Malta are women, and men’s disappointing take-up may well be considered an indicator of the social phenomenon of the division of family work and paid work along gender lines that remains unchanged. It appears, there is much that government can do. Parental leave and career breaks that are paid and inclusive will begin to challenge Malta’s traditional assumptions associated with motherhood and employment. If government really wants to promote gender equality, an essential part of the
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Nathaniel Falzon Conserving our Natural Environment and Sustainability: A Legal Rendition
Nathaniel Falzon acquired an LL.B (Hons) Degree from the University of Malta in 2018 and a Masters in Advocacy Degree in 2019. While pursuing his studies within the University of Malta, he served as Financial Officer and Vice-President of Għaqda Studenti tal-Liġi, as well as Public Relations Officer of JEF Malta. Currently reading for a Master of Laws (LL.M) specialising in International Maritime Law at the International Maritime Law Institute and working within Transport Malta as a legal officer in charge of Data Protection and Compliance.
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It is known that in nature there are neither rewards nor punishments, only consequences. – Robert G. Ingersoll
1. Introduction
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hroughout these last couple of years, one topic has remained in the fulcrum of both local and international affairs, politics and public discourse. This topic has for long been considered as one of the pivotal discussions of our modern age and its repercussions are starting to affect us the more time passes and the situation continues to be exasperated. As a topic it has had its fair share of conspiracies and controversies, with the most notable of all being the ‘Leader of the Free World’ simply dismissing the whole topic and pinpointing the whole issue to his adversaries while dismissing it as a simple political ploy.1 On the other hand, the United Kingdom and Canada amongst other countries, have declared this as an emergency and urged comprehensive and holistic action.2 The topic is none other than the state of our natural environment and how human intervention is affecting the environment with the most notable symptom being that of climate change. The prominence of this issue has led politicians and individuals such as Greta Thunberg, to increase awareness on the topic and tackle the depleting natural environment while also minimising the effects of climate change. All of the above focuses on the natural environment and the need to ensure that it is not only looked after in the short term, but also induce more sustainable and eco-friendly lifestyles and means of living whereby it can be truly said humanity co-exists along with the natural environment. Bearing in mind the foregoing, the author also shares the opinion that this is one of the biggest issues facing today’s humanity and that something must be done. The author claims to have struggled to understand how humans can be indifferent to their surrounding natural ambient and how humanity could simply pursue their own egoistic and unbounded interests at the detriment of everything else. 1 <https://twitter.com/realdonaldtrump/status/265895292191248385?lang=en.> 2 Climate Emergency Declaration, <https://en.wikipedia.org/wiki/Climate_emergency_declaration.>
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Environmental Law Recognizing that there are no clear-cut solutions to this ‘climate emergency’ yet willing to move beyond mere apprehension of this problem, the author has sought to explore and research the topic further and analyse what other jurisdictions around the world have achieved so far. This submission will explore existing and tentative legal frameworks which seek to balance out nature’s right to co-exist in today’s anthropocentric world and asses their viability in the local Maltese scene.
2. What are ‘Nature Rights’? Back in 2012, the International Union for Conservation of Nature declared that assigning rights to nature is a ‘fundamental and absolute key element for planning, action and assessment’.3 Various international organizations have committed themselves towards achieving and advocating such legal concepts on an international scale. Establishing the right to our natural environment has been described as means to ‘treat the disease, not the symptoms’.4 Yet realistically, what is its significance? In the philosophical discussion surrounding the concept of ‘rights’, one finds that the discussion is often compartmentalized into the ‘form’ and the ‘function’ of the rights. While the former focuses on the internal structure of the right, the latter considers the interaction for the right and the rights holder.5 When discussing the ‘form’ of the constitution of rights, the established Hohfeldian incidents are often quoted and consist of the privilege, the claim, the power and the immunity.6 In this particular scenario, the claim proposition is of relevance as by assigning rights to nature we, collectively as a society, would be recognizing that nature should be treated and allocated a number of rights which may hinge or limit other sets of rights.7 Yet in order for a thing to be considered as a rights holder, Professor Stone, who is one of the main 3 Darlene Lee, ‘Rights of Nature at the International Level’, (26 October 2017) available online on: <https://www.earthlawcenter.org/blog-entries/2017/10/rights-of-nature-withinthe-un-and-iucn.> 4 Ibid 5 Stanford Encyclopedia of Philosophy, (19 December 2005) available online on: <https://plato.stanford.edu/entries/rights/#2.2.> 6 Ibid. 7 Mihnea Tanasescu, The Rights of Nature in Ecuador (Palgrave Macmillan, London 2016).
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proponents advocating for the assignment of rights to nature, describes three intrinsic elements which must be considered and included in the discussion: ‘the thing can institute legal actions at its behest, second, that in determining the granting of legal relief, the court must take injury to it into account, and third, that relief must run to the benefit of it’.8 Simply assigning rights to nature and thus considering nature as a rights holder, yet not recognising and providing solutions to the foregoing three characteristics would prove futile. In order to better exemplify his ideas Professor Stone makes use of the current example: To illustrate, even as between two societies that condone slavery there is a fundamental difference between S1, in which a master can (if he chooses), go to court and collect reduced chattel value damages from someone who has beaten his slave, and S2, in which the slave can institute the proceedings himself, for his own recovery, damages being measured by, say, his pain and suffering. Notice that neither society is so structured as to leave wholly unprotected the slave’s interest in not being beaten. But in S2 as opposed to S1 there are three operationally significant advantages that the slave has, and these make the slave in S2, albeit a slave, a holder of rights. The above example depicts how our current legal system (S1) treats nature as indeed our ‘slave’ in today’s anthropocentric society and how the current legal frameworks protects our natural environment yet without wholly considering the environment as a rights holder in its own right. By assigning rights to nature, we are moving away from a century-old approach by allowing courts to recognise nature’s inherent value and whose value is quantified according to its own merit rather than upon consideration to our human value system.
3. Nature Rights in Practice: The Ecuadorian and Bolivian Experience The first jurisdictions which sparked off this movement were Ecuador and 8 Christopher D. Stone, Should Trees Have Standing? – Toward Legal Rights For Natural Objects (Southern California Review) 45 (1972).
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Bolivia back in 2008 and 2010 respectively. An important consideration which needs to be borne in mind is that common to both of the abovementioned countries, one finds a vast and rich natural eco-system as well as different sects of indigenous local people and tribes who live in small communities and have a spiritual connection to their natural environment. These communities pursue what they refer to as ‘Sumak Kawsay’ which translates to ‘good living’ or the ‘good life’.9 One of the central elements of this way of life is the importance of living in harmony with nature in such a way as to be ‘able to preserve their unique culture and identity, and care for an environment that they know will provide for generations to come’.10 This ‘way of living’ is deeply rooted into ancient Quechua people of the Andes and focuses on living sustainably in harmony with Pacha Mama, which according to ancient Inca mythology, refers to the ‘goddess of Earth, life and harvest’ more often termed as ‘Mother Nature’. This presents a different socio-economic perspective which challenges the dominant anthropocentric world view which perceives people’s rights and interests as the be all and end all. Ecuador’s natural environment and its indigenous communities were also adversely affected by various ecological disasters over the years, the most famous one being the oil dumping case of Chevron/Texaco in the lakes and rivers of Lago Agrio region.11 Naturally enough, such disasters laid waste to different ecological ecosystems and thus affected public perception and led to more political consciousness and awareness on such exploits by large conglomerates while also heightening awareness of the need to better protect the natural environment in pursuit of ‘Sumak Kawsay’. All of the above, amongst other considerations, laid the groundwork towards the 64% referendum result in favor of amending the Ecuadorian constitution to recognize nature or ‘Pacha Mama’ as a rights-holder. The Preamble section of the Constitution was amended and nature was described as being ‘vital to our existence’,12 and as a ‘new form of coexistent citizenship, in diversity and in harmony with nature, to achieve the good life, 9 ‘Sumak Kawsay: Ancient Teachings of Indigenous Peoples’, <https://www.pachamama.org/sumak-kawsay. 10 Ibid. 11 ‘Chevron wins Ecuador rainforest ‘oil dumping’ case’ (BBC News, 2018) <https://www. bbc.com/news/world-latin-america-45455984>. 12 ‘Ecuador: 2008 Constitution in English’ <http://pdba.georgetown.edu/Constitutions/ Ecuador/english08.html>.
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the Sumak Kawsay’13 was established. A whole chapter is dedicated towards the Rights of Nature according to which ‘Nature or Pacha Mama, where life is reproduced and exists, has the right to exist, persist, maintain and regenerate its vital cycles, structure, functions and its processes in evolution’.14 All ‘persons, communities, peoples and nations’15 are considered to have legal standing in order to ‘call upon public authorities to enforce the rights of nature’.16 The aforementioned persons, communities, peoples and nations have a right to ‘benefit from the environment and the natural wealth enabling them to enjoy the good way of living’.17 The State is tasked with promoting and motivating individuals to represent natural rights, apply any precautionary or reactionary measures for the wellbeing of nature and its species and decide exclusively on the use, production and exploitation of environmental services.18 The State is also the designated regulator for production, use and development of environment services and management.19 However, one specific article which is of particular relevance to the discussion on the topic of Rights to Nature is Article 72. The mentioned Article reads: ‘Nature has the right to be restored. This restoration shall be apart from the obligation of the State and natural persons or legal entities to compensate individuals and communities that depend on affected natural systems’. In those cases of severe or permanent environmental impact, including those caused by the exploitation of non-renewable natural resources, the State shall establish the most effective mechanisms to achieve the restoration and shall adopt adequate measures to eliminate or mitigate harmful environmental consequences.20 This article embodies the concept of Rights to Nature as it not only establishes that Nature has a right to co-exist and flourish but rather, it has the right to be restored and compensated which right is distinct from the restoration and compensation to be granted to any individuals or communities. Therefore, harm towards nature is not to be quantified in terms of the harm caused to individuals and communities affected but quantified 13 14 15 16 17 18 19 20
Ibid. Ibid. Ibid. Ibid. Ibid. Ibid. Ibid. Ibid.
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on its own merits and solely upon Nature’s terms. Bolivia opted to pursue a different legislative approach by passing legislation rather than entrenching the rights to nature into their constitutional framework. Albeit this difference, however, they still incorporate similar themes which feature in the Ecuadorian framework. These include the concepts of ‘Sumak Kawsay’ and ‘their indigenous concepts that view nature as a sacred home, the Pachamama (Mother Earth) on which we intimately depend’.21 The ‘Law of the Rights of Mother Earth’ (Law 071) was passed in December 2010 by the Bolivian Plurilateral Legislative Assembly and consists of ten articles. Notably, among this Legislative Act, one finds a set of principles which need to be respected such as the guarantee of the regeneration of Mother Earth and that human activities should balance and co-exist in harmony with Nature.22 The rights of Nature must be protected and guaranteed for the ‘well-being of current and future generations’23 and its rights are to be enforced through collective public interest as ‘all Bolivians exercise rights under this Act, in a way that is consistent with their individual and collective rights’.24 The rights granted to Nature include the right to life, diversity of life, to water, to clean air, to equilibrium, to restoration and to pollution-free living.25 The subsequent Article of the Law of the Rights of Mother Earth establishes a set of obligations imposed on the state government and duties on the society at large. The Bolivian state is tasked with developing policies and ‘forms of production and patterns of consumption’26 which balance ‘the needs of the Bolivian people to live well, while safeguarding the regenerative capacity and integrity of the cycles, processes and vital balance of Mother Earth’.27 In this pursuit of sustainability, the State is also expected to invest in the ‘gradual incorporation of clean and renewable alternative sources into the energy matrix’28 and ‘promote peace and the elimination of all nuclear, 21 Nick Buxton, ‘The Law of Mother Earth: Behind Bolivia’s Historic Bill’ <https://therightsofnature.org/bolivia-law-of-mother-earth/>. 22 ‘Law of Mother Earth, The Rights of Our Planet, A Vision from Bolivia’ <http://www. worldfuturefund.org/Projects/Indicators/motherearthbolivia.html>. 23 Ibid. 24 Ibid. 25 Ibid. 26 Ibid. 27 Ibid. 28 Ibid.
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chemical, and biological arms and weapons of mass destruction’.29 On the other hand, the legislative framework imposes a set of duties on the Bolivian society such as to support the sustainable use and rights of nature and adopt ‘production practices and consumer behavior in harmony with the rights of Mother Earth’.30 Lastly, an Office of Mother Earth is established in order to promote and ensure compliance to provisions found in the legislative framework. This approach, particularly the last sections of the Bolivian legislation, contrasts with the abovementioned Ecuadorian model. By opting for legislating on the topic rather than passing constitutional amendments on its existing constitution, the Bolivian legislator had more ‘legislative discretion’ in order to provide a more holistic and extensive framework for the protection of the natural environment. The legislator ventured beyond the assignment of rights to nature and sought to tackle other ancillary issues most notably sustainability by means of assessing the feasibility of fossil fuels as energy sources and pollution of water and air. This approach has led environmentalists to consider this legislative framework as ‘not just an idea, more than a vision’.31
4. Who and How Can Someone Invoke Nature’s Rights Successfully? Following Ecuador’s constitutional reform in 2008 to incorporate nature’s rights, the Ecuadorian Courts did precisely so in the famous Vilcabamba River case.32 In the mentioned case, the Court decided in favor of the river as a holder of rights since such rights were considered as contravened and thus demanded that the municipal government provide compensation for its actions when attempting to widen the road and various construction material were deposited into the riverbed. The significance of this case was in the fact that the court departed from utilizing its more traditional anthropocentric and 29 Ibid. 30 Ibid. 31 Peter Neill, ‘Law of Mother Earth: A Vision From Bolivia’ (HuffPost, 2015 <https:// www.huffpost.com/entry/law-of-mother-earth-a vis_b_6180446?guce_referrer=aHR0cHM6Ly9kdWNrZHVja2dvLmNvbS8&guce_referrer_sig=AQAAAG4NUc2kyaXqxWgN36B8hU_HRf97BHbIKuHjai9wDyvLtxbd5HJQJLkoOuuaUW6gwdZG0LJDEzcCLRILPYd_6_ApJSeTiJWENhiX7di7pVZdG4oLzyTWt7YyNRptDHh-F3FqwifjiY1ELZnGNS8zFbesXaaaHm_erO3eCbt6Cxlt&guccounter=2> 32 Richard Frederick Wheeler y Eleanor Geer Huddle c/ Gobierno Provincial de Loja, juicio 11121-2011-0010 (30 March 2011) < https://www.elaw.org/content/juicio%2011121-20110010>.
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riparian value-system to quantify environmental damages of the sort and instead focus on nature as a rights holder in itself and its damages suffered. According to the Ecuadorian and Bolivian models mentioned above, citizens have the necessary locus standi to represent nature and its rights as established in the Ecuadorian constitution or respective Bolivian legislation. This framework incorporates a comprehensive actio popularis mechanism whereby citizens are tasked with safeguarding the rights prescribed to nature. While this was successfully invoked in the Vilcabamba River case as featured above, this may not always be the case and thus unveils how this model can in itself act as a ‘double edged sword’. Citizens may not always have the interests of nature at heart, and while controversial projects having a detrimental impact on the natural environment may be deemed as necessary for the regeneration or economic growth of a region, they may however go unnoticed and uncontested by citizens, thus once again omitting nature’s interests and rights from the equation. In light of the foregoing, such mechanisms can bring about a situation whereby it will be utilised selectively and not effectively as a legal safeguard to protecting our natural environment and its wellbeing. Professor Stone suggests assigning a ‘Guardianship’ model to represent nature’s rights and interests and alleviate the Ecuadorian and Bolivian model’s shortcoming of public enforcement.33 This would also prove to be a comprehensive solution to avoid a flood of litigation as different individuals would seek to initiate separate legal proceedings even though other individuals or NGOs would have already pursued the path of legal redress and thus bypass the rules of res judicata. This approach according to Professor Stone would ensure: [A] continuous supervision over a period of time, with a consequent deeper understanding of a broad range of the ward’s problems, not just the problems present in one particular piece of litigation. It would thus assure the courts that the plaintiff has the expertise and genuine adversity in pressing a claim which are the perquisites of a true ‘case or controversy’.34 Stone compares this guardianship concept with the same legal procedure 33 Christopher D. Stone, Should Trees Have Standing? – Toward Legal Rights For Natural Objects (Southern California Review 45 (1972). 34 Ibid.
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employed when a company is declared bankrupt and a trustee (provisional administrator or liquidator in our legal system) is assigned to secure the interests of the creditors and process of winding-up.35 This highlights how indeed prescribing rights to nature would not be the end of the discussion but rather laying the groundwork towards furthering our pursuit towards sustainability and better ecological and natural management of our environment.
5. Guardianship Model Even though an analysis of local legislation and frameworks will be dealt with in a distinct section of this submission, I feel that this sub-section is more relevant in this context of the discussion as it relates directly to a tentative guardianship model for nature. On the topic of a ‘Guardianship’ model for Nature, it is appropriate to mention the Maltese proposal for the 1992 Rio Earth Summit whereby the Maltese delegation had proposed the setting up of a Guardianship of Future Generations.36 The Maltese proposition reads: We declare that each generation has in particular, the responsibility to ensure that in any national or international forum, where it is likely that a decision be taken affecting the interests of future generations, access be given to an authorized person appointed as ‘Guardian’ of future generations to appear and make submissions on their behalf, so that account be taken of the responsibilities stated in this Declaration and the obligations created thereby.37 It is to be noted that at the time of the discussion, the recognition of future generations and their respective rights were already established and thus Malta was proposing a move beyond simply recognizing such principles but acting upon them.38 According to the proposal, this model of guardianship was not expected to have any decision-making authority, yet it would be 35 Ibid, (11). 36 UN Document/A/CONF.151/PC/WG./L.8/Rev.1/Add.2), dated February 21, 1992 (Working Group III, 4th session) New York: paragraph 17. 37 Ibid. 38 Carmel Cacopardo, ‘Future Generations Must Be Heard’, Times of Malta, (27 August 2011) <https://timesofmalta.com/articles/view/Future-generations-must-be-heard.382028>
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afforded the possibility to contribute and put forward any reasonable arguments on behalf of future generations.39 While this proposal was not taken up by the Rio Declaration, this framework was enacted and incorporated into Maltese law in the Sustainable Development Act of 2012.40 Similarly, the role of this Guardian of Future Generations is to safeguard inter-generational sustainable development in Malta and shall consist of a Commission of five politically appointed individuals.41 Despite the many mandated abilities found in the mentioned Act, the model adopted appears similar to the Maltese proposal back in 1992, as the role of the current Guardian has simply remained that of advocacy and consultation, which has led many individuals, as well as the author of this submission, to feel that the office of Guardian of Future Generations has left much more to be desired from such a role.42 However, if one had to consider all of this in the grander scheme of things, I believe that this presents Malta with a golden opportunity of salvaging such a prestigious albeit onerous office and legal model. The fact that Maltese law already caters for a Guardian model can in itself lead towards conceiving the possibility of having a distinct or specified Guardian for other elements such as but not limited to, the natural environment. It can be argued that the rights of future generations are generic and include the right to enjoyment of the natural environment similar as we have inherited from our fathers. This model of characterizing different ‘Guardians’ can also prove as a solution to the question of finding and selecting one individual with the right skillset and knowledge in order to occupy the burdensome role of ‘Guardian of Future Generations’ with all its generic rights and interests. This sentiment can be said to have been already recognized by the legislator since Article 8 (2) of the Sustainable Development Act prescribes a Commission format composed of different individuals from different backgrounds and varying expertise.43 If we were to adopt such a model or rather vary upon what we already have present in our legal framework, we would be moving towards what Professor 39 UN Document/A/CONF.151/PC/WG./L.8/Rev.1/Add.2), dated February 21, 1992 (Working Group III,4th session) New York: paragraph 13. 40 Sustainable Development Act, Chapter 521 of the Laws of Malta, article 8. 41 Ibid. 42 Cacopardo, ‘The Guardian of Future Generations’ (Blog ta’ Carmel Cacopardo) <https:// carmelcacopardo.wordpress.com/tag/rio-earth-summit-1992/> 43 Sustainable Development Act , Chapter 521 of the Laws of Malta, article 8(2).
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Stone had suggested as a spinoff from the Maltese Rio Summit proposal in his book.44 Professor Stone foresaw the potential of Malta’s proposal, yet he favored specialisation of such Guardians in order to be able to ‘place heavier reliance on scientific expertise inasmuch as each ‘object’ requires distinct bodies of knowledge’.45 He concluded that such specialised Guardians can: [C]oncentrate and mobilize knowledge; their opinions are therefore authoritative, and readily enjoy a credit that may be denied the speculations of a well-respected generalist. Considering the concern over the long-term effects on human life of specific assets and activities, future persons might wish that those who spoke for them had more than practical wisdom and humility.46 Professor Stone’s adaption would also vary the functions of these ‘specialized Guardians’ as proposed by Malta in the Rio Summit as well as the current mandate found in the Sustainable Development Act. Rather than simply assigning an advocacy role for sustainable development, Professor Stone suggested that due to the specialisation of the Guardian and thus such office being more well-equipped and knowledgeable to fulfill its role, the Guardian ought to be given leave to act as a ‘special intervenor-counsel’47 and ‘to initiate legal and diplomatic action on the future’s behalf in appropriate situations’.48 Thus, under this model the Guardian is considered as the only ‘special intervenor’ having locus standi to initiate and participate in legal proceedings. This can be an alternative to the situation under the Ecuadorian and Bolivian model which leaves the enforcement of constitutional rights of nature to a question of actio popolaris. At the same time, as previously mentioned, this mechanism would not expose the Court to a barrage of cases as the flood gates are open for any individual to assert claim since citizens are afforded collective locus standi. While these suggestions are not to be considered definitive, they should serve as an eye-opener to legislators in order to equip the Guardian with more effective means to achieve its raison d’etre, be it the protection of future generations or our natural environment. 44 Christopher D. Stone, Should Trees Have Standing? – Toward Legal Rights For Natural Objects (Southern California Review 45 (1972) 107. 45 46 47 48
Ibid. Ibid. Ibid. Ibid.
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6. Prescribing Legal Personhood to Nature: The New Zealand model Another noteworthy legislative framework is that of New Zealand which assigned legal personality and shifted decision-making procedures from a governmental authority to a more representative body. Effectively, this amounted to no significant or radical legal implications with respect to existing environmental protection. Nor can it be said that this has brought about the end of private property in relation to nature and its ecosystem. However, such models provide for comprehensive frameworks which are focused on reaching compromises and balancing out both community and human interests as well as recognising nature as equal rights holder. Particularly by means of prescribing nature a legal personality in New Zealand, it can be said that the legislator has managed to create a mutuallybeneficial framework on two levels. Firstly, governmental and indigenous Iwi representatives must actively participate in the decision-making process to achieve consensus and thus end an age old dispute over who has the legal and legitimate claim for the land in question and secondly, reconcile governmental/societal interests against endemic tribal and ‘spiritual’ conceptions who identify themselves as having a genealogical connection with nature.49 Similar to Ecuador and Bolivia, in New Zealand one also finds a strong indigenous identity and community which also has strong connections to their natural surroundings and environment. In Maori genealogy, the Whanganui River and Te Urewera forest are considered as sacred ancestors and for long have been at the center of different claims to the status of the land in question. In New Zealand the legislators did not assign rights to nature holistically across the board but rather focused on specific natural phenomena: a river and a forest. According to the Te Uruwera Act of 2014, the said forest is established as its own legal entity ‘and has all the rights, powers, duties and liabilities of a legal person’50 and thus it is no longer within the confines of the National Parks Act. Through this new conception of natural legal personality, it can 49 ‘Maori View of their Natural World’ (Cultural Survival Quarterly Magazine, December 2000) <https://www.culturalsurvival.org/publications/cultural-survival-quarterly/maori-viewtheir-natural-world>. 50 Te Uruwera Act 2014.
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be said that nature is liberated ‘from human speculation’.51 However, the above-mentioned legal personality and its constitutive legal characteristics and implications ‘must be exercised and performed on behalf … Te Urewera by the Te Urewera Board and in a manner provided for in this Act’. Amongst the different functions which are to be assumed by the Board, one finds that they are responsible for drafting a management plan as well as ongoing monitoring of such plans and propose any modifications, be it expansion, removal or establishing any interests therein the land of Te Urewera forest.52 The indigenous Iwi and Hapū Maori tribes are not eliminated from the decision-making process and the ‘Board must consider and provide appropriately for the relationship of Iwi and Hapū and their culture and traditions with Te Urewera when making decisions’.53 This is reflected in the constitution of the said Board which is made up of a total of nine members, six of which are nominated by the trustees of the Tūhoe - Te Uru Taumatua (representatives of the Tūhoe indigenous community) and the remaining three appointed by the Government. The chairperson of the Board is chosen from the six members nominated by the trustees. Day-to-day management will be shared between the Chief Executive of Te Uru Taumata, a Tuhoe body and a government appointee.54 The purposes of the Act are to ‘preserve as far as possible the natural features and beauty of Te Urewera, the integrity of its indigenous ecological systems and biodiversity, and its historical and cultural heritage’55 and ensure that Te Urewera remains a ‘place for public use and enjoyment, for recreation, learning, and spiritual reflection, and as an inspiration for all’.56 According to the Te Uru Taumatua, ‘in re-affirming this natural order the Board through Te Kawa is disrupting the notion of our false superiority over the natural world’ and ‘returning to our place in nature, as her child’.57 A similar legal framework was extended to the Whanganui river which is the longest navigable river in New Zealand. When comparing the 51 era> 24. 52 53 54 55 56 57 era>.
Te Kawa O Te Urewera – English <https://www.ngaituhoe.iwi.nz/te-kawa-o-te-urewTe Uruwera Act 2014. Ibid. Ibid. Ibid. Ibid. Te Kawa O Te Urewera – English <https://www.ngaituhoe.iwi.nz/te-kawa-o-te-urew-
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Whanganui58 and Te Urewera legal framework, one notices both a number of consistencies and discrepancies. Maori’s spiritual connections and symbolism towards nature remains a central element as the Whanganui river is quoted as ‘Awa Tupua’ (river of sacred power or ancestor).59 For long this river has been subject to conflicting claims and in a case back in 1962, the New Zealand Court of Appeal declared Maori customary ownership of the riverbed and had been extinguished by the granting of Crown titles to riparian blocks. Therefore, the Act was groundbreaking as it recognises Maori claims and one of its purposes is to ‘record the acknowledgement and apology given by the Crown to Whanganui Iwi’.60 In 2017, New Zealand enacted legislation which recognized the river along with all its interconnected natural elements as a legal entity and thus possessing all the ‘rights, powers, duties and liabilities’61 of any legal person established and recognized by law. Similarly the Te Puo Tupua office, which is composed of two individuals nominated by the Iwi and the government respectively, is vested with the management and legal representation of this newly vested legal entity and all of its rights, powers, duties and liabilities as it will act as the ‘human face of Te Awa Tupua’ and act in the name of Te Awa Tupua.62 Among the functions of the newly established office, one finds that it is to perform landowner functions and rights and set up a contestable trust fund which is established in order to support the health and well-being of Te Awa Tupua.63 The government has committed itself to support the mentioned trust fund by means of an initial 21 million US dollars as well as an ongoing 140,000 US dollars per year for 20 years pledge.64 Te Puo Tupua is to be assisted and supported by another body called Te Karewao and a strategy group of 17 members that represents Iwi, relevant local authorities, departments of State, commercial and recreational users and environmental groups is to be consulted and approve the river strategy.65 This highlights 58 Te Awa Tupua (Whanganui River Claims Settlement) Act 2017. 59 Kenny Warne, ‘A Voice for Nature’ <https://www.nationalgeographic.com/culture/2019/04/maori-river-in-new-zealand-is-a-legal-person/> 60 Ibid. 61 Te Awa Tupua (Whanganui River Claims Settlement) Act 2017. 62 Ibid. 63 Ibid. 64 Kelly Buchanan ‘New Zealand: Bill Establishing River as Having Own Legal Personality Passed’ (Global Legal Monitor, 22 March 2017) <https://www.loc.gov/law/foreign-news/ article/new-zealand-bill-establishing-river-as-having-own-legal-personality-passed/> 65 Te Awa Tupua (Whanganui River Claims Settlement) Act 2017
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the recurrent spirit of co-management and co-governance by providing participatory holistic decision-making features throughout the Act. This co-management model of assigning legal personality can be described as a success in New Zealand as it will be further replicated with respect to the Taranaki Mountain following an agreement signed by Crown and Maori representatives in late 2017.66
7. Achievements of the New Zealand Model The assignment of legal personality rights in New Zealand can also be said to be both a compromise on the conflicting claims from the Maori tribes and the Crown over the mentioned areas and the re-orientation of human predominance over nature. This framework rests on a more collaborative ethic of achieving proper administration through means of co-management bodies. By assigning legal personality, the land which was previously managed solely by the Crown and considered a national park is now established as its own ‘legal person’ and is to be governed and represented by the Board established in accordance to its constituent Act. The Board’s roles have been absorbed from the Minister of Conservation and governmental bodies previously assigned by virtue of the National Parks Act 1980, in the case of Te Urewera. Therefore, this can be summarized as a transfer of administration from the Crown to this newly formed legal entity while established rights of public freedom of entry and access on the land remaining untouched.67 On the specific question of natural mineral exploitation within the Te Urewera territory, the debate no longer remains a question to be dictated by the Crown and its Ministers but rather it is shifted onto the Board who has the authority to issue permits regulating mining. The same legal standards and protection previously invested in the government are transferred onto this Board and while one can say that this model does not extend the extent of legal protection previously incorporated, the decision-making authority has 66 Derek Cheng, ‘Mt Taranaki will be granted special legal status similar to Te Urewera and the Whanganui River’ (NZ Herald, 21 December 2017).<https://www.nzherald.co.nz/nz/ news/article.cfm?c_id=1&objectid=11963982>. 67 TUA s 5(2).
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changed and thus more oversight and scrutiny can be achieved.68 The spirit of co-management and co-governance is also something which is quite distinctive in the New Zealand model. It is clear and established that indigenous and government representatives will have different conceptions and perspectives on our natural surroundings and how to manage our human interactions. However, statutory requirements necessitating unanimous decision-making or consensus decisions, ensure a high degree of collaboration and discussion rather than lambasting and bulldozing any criticism or opposing views. Any votes taken must have the support of the vast majority of the representative members, thus all stake holders have to actively pursue a comprise acceptable to other members.69 This approach coincides with various contributions in favour of ‘legal pluralism’ and the theory of ‘relative authority’. One such legal pluralist advocate is Nicole Roughan, who contends that authority and decision-making ‘should be conceived as relative, shared and interdependent, not binary, monist, or independent’.70 This framework can be said to embody the various tenets of effective democratic policy-making and while indigenous communities may not feature across the globe, like-minded environmentalists and conscious citizens can fulfill such a role within other countries should similar frameworks be adopted around the world. As concluded by Katherine Sanders, ‘the legal personality model should be valued as a framework that acknowledges disagreement and seeks to structure and support the process of negotiation and compromise that arises from it’.71
68 Katherine Sanders, ’Beyond Human Ownership’? Property, Power and Legal Personality for Nature in Aotearoa New Zealand (Journal of Environmental Law 2018) 225. 69 Te Urewera Board may make a decision supported by a minimum of 80% of its members - TUA 2014 s 33, 34, 36 (1)(a); and Te Kopuka may make a decision supported by a minimum of 75% of its members if in the opinion of the chairperson consensus is not practicable - TATA 2017 sch 4, cl 6 and cl 10.s. 70 Nicole Roughan, ‘Authorities: Conflicts Cooperation and Transnational Legal Theory’ (OUP, 2013) 15. 71 Katherine Sanders, Beyond Human Ownership? Property, Power and Legal Personality for Nature in Aotearoa New Zealand, (Journal of Environmental Law 2018) 234.
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8. The Maltese Scenario After a thorough discussion on the different models embodied in other jurisdictions, it is only fair that we look closer to home and analyse how and what Malta has legislated on the topic. The Maltese Constitution does not include any outright constitutional protections for the environment or nature. However under Article 9, Chapter II of the Constitution, one finds that the State has been tasked with the duty to safeguard the landscape and the historical patrimony of the Nation.72 Article 9 (2) continues that the State is duty-bound to ‘protect and conserve the environment and its resources for the benefit of the present and future generations’.73 The State is also duty-bound to address any form of environmental degradation, be it of air, water or land, and the State should ‘promote, nurture and support the right of action in favor of the environment’.74 While this may by itself be considered as a significant provision in the pursuit of achieving constitutional environmental legal protection, it is important to note that the aforementioned Article is found under the ‘Declaration of Principles’ chapter of the Constitution and thus their relevance in relation to their respective legal enforcement can be debated. This sentiment is embodied in Article 21 which declares that the provisions found within Chapter II of the Constitution shall not be ‘enforceable in any court, but the principles therein contained are nevertheless fundamental to the governance of the country and it shall be the aim of the State to apply these principles in making laws’.75 An interesting legal moot point would be how the courts are to interpret and apply such principles. Professor Durgas Das Basu, an esteemed Indian constitutional jurist, claimed that Indian courts are ‘not debarred from taking cognisance of the Directives as part of the Constitution for other purposes, e.g. for the purpose of interpreting other provisions of the Constitution or laws made by the Legislature’.76 In fact the Indian Supreme Court has often interpreted the words ‘making of laws’ in their Article 37 (our equivalent of 72 Constitution of Malta, Article 9. 73 Ibid. 74 Ibid. 75 Ibid, Article 21. 76 Tonio Borg, ‘Chapter II: a proper interpretation of its principles’ Times of Malta, (14 January 2018), available online on: <https://timesofmalta.com/articles/view/Chapter-II-a-proper-interpretation-of-its-principles-Tonio-Borg.667892>.
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Article 21) as allowing the courts to interpret laws in accordance to these Principles.77 In a recent article by Tonio Borg, he declares that Chapter II (Declaration of Principles) and Chapter IV (Fundamental Rights and Freedoms of the Individual) of the Constitution are to be considered as ‘inextricably intertwined and do not have a separate existence’.78 This interpretation was upheld also by the Indian Supreme Court in Keshavaanda Bharati v State of Kerala (1973) whereby the Court declared that ‘there is no anti-thesis between Fundamental Rights and Directive Principles… and one supplements the other’.79 In another case, the Principles and Fundamental Rights were described ‘like two wheels of a chariot, one no less important than the other. You snap one and the other will lose its efficacy… to give absolute primacy to one over the other is to disturb the harmony of the Constitution’.80 Despite the abovementioned interpretation of other Courts to their ‘variation’ of Article 21 within their constitutional framework, Maltese Constitutional jurisprudence provides us with a divergent opinion on Chapter II of the Constitution.81 When in the Doctor’s Strike case of 1977, the applicants relied on Article 7 on the right to work and Article 12 on the State’s duty to protect work (both Articles found under Chapter II), the Constitutional Court did not consider that these articles are a legitimate legal basis due to the non-enforceability in a court of law as established under Article 21.82 This conflicting interpretation of our Principles chapter of the Constitution puts us in a ‘direct collision’ course with other jurisdictions with whom we share the same constitutional understanding and completely ostracises such constitutional principles from any form of tangible legal enforceability. Upon moving onto Maltese legislation, it is clear that the legislator has recognized the importance of our natural environment and his role as a legislator in protecting it and prescribing the corresponding legislation and frameworks in order to achieve this. 77 Ibid. 78 Ibid. 79 Keshavaanda Bharati v State of Kerala, 1973. 80 Minerva Mills v. Union of India, 1981). 81 Tonio Borg, ‘Chapter II: a proper interpretation of its principles’ Times of Malta, (14 January 2018), available online on: <https://timesofmalta.com/articles/view/Chapter-II-a-proper-interpretation-of-its-principles-Tonio-Borg.667892> 82 Ibid.
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In the opening sections of the Environmental Protection Act, the legislator gives prominence to the topic at hand by immediately establishing that environmental protection should be shouldered by every natural and legal person as well as the State.83 This distinction is seen in Article 3 and 4 whereby the former establishes that ‘it shall be the duty of every person and entity, whether public or private, to protect the environment and to assist in the taking of preventive and remedial measures’.84 As for the latter and State’s duty in protecting the environment, the legislator lists a set of criteria which ought to be followed in order to achieve such protection. These include managing ‘the environment in a sustainable manner’,85 ‘tak[ing] such preventive and remedial measures as may be necessary to address and abate the problem of pollution and any other form of environmental degradation in Malta and beyond’86 and ‘safeguard[ing] biological diversity’.87 The State’s duty in the pursuit of the protection of our environment should not simply consider the present generation but must also consider future generations.88 Yet similar to what was discussed above at a constitutional level, Article 5 waters down the applicability and legal enforceability of these provisions as they are not directly enforceable in any court of law and thus their relevance can only be considered in the interpretation of the provisions of the Act.89 One can point out the ‘irony’ that the legislator considers the provisions and principles employed as ‘fundamental to the Government of Malta’ while at the same time reduces them to mere reference points devoid from legal enforceability.90 This is also replicated in Article 3 of the Development Planning Act which establishes that, ‘[i]t shall be the duty of the Government to enhance the quality of life for the benefit of the present and future generations … through a comprehensive sustainable land use planning system’.91 The aforementioned Article continues to list a set of criteria of how this shall be achieved such as to ‘preserve, use and develop land and sea for this and future generations, 83 84 85 86 87 88 89 90 91
Environmental Protection Act, Chapter 549 of the Laws of Malta. Ibid, article 3. Ibid, article 4 (a). Ibid, article 4 (b). Ibid, article 4 (g). Ibid. Ibid, article 5. Ibid. Development Planning Act, Chapter 552 of the Laws of Malta, article 3.
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whilst having full regard to environmental, social and economic needs’92 and ‘identify regional planning shortcomings and address any problems found in relation thereto’.93 However, the subsequent Article immediately waters down the previously mentioned provisions by declaring that they are ‘not directly enforceable in any court’.94 Nonetheless, the legislator felt the need to reiterate that these provisions are considered as ‘fundamental to the Government of Malta’ and they also serve as a means in order to interpret any of the provisions found therein within then Development Planning Act. This draws parallels with the above situations featured both at a Constitutional level in the Declaration of Principles Sections as well as in the Environmental Protection Act. If we are to be considered as a jurisdiction which is seriously and actively doing its part in safeguarding and protecting our natural environment, then this ought to be reflected in our legislative framework. Simply stating that it is the State’s duty to take care of our natural environment yet voiding such provisions from legal enforceability is nothing less than merely paying lip service to such an agenda and doing otherwise. If we are to be taken seriously on the international level, similar to what we have done on multiple occasions such as in Arvid Pardo’s historic Common Heritage of Mankind concept back in 1967 and the Maltese proposition of appointing a Guardian for Future Generations in the 1992 Rio Earth Summit, we should lead by example and enact legislation and legal frameworks which dignify nature and provide readdress and solutions to the problems facing humanity. Environmental protection as a concept, or rather principle, is already present in our current legislative framework. It is also abundantly clear that Maltese society desires that more must be done in order to protect our natural environment.95 May this submission be a call to our legislators to reflect their electorate’s wishes and legislate on the matter by elevating these ‘principles’ to a set of legally enforceable provisions which provide for legal recourse and thus providing a higher degree of accountability and enforceability. By establishing legal enforceability, State authorities as well as natural and legal 92 Ibid. 93 Ibid. 94 Ibid, article 4. 95 Yannick Pace, ‘Immigration, housing and environment top Maltese concerns in Eurobarometer survey’ Malta Today, (5 August 2019), <https://www.maltatoday.com.mt/news/ national/96730/immigration_housing_and_environment_top_maltese_concerns_in_eurobarometer_survey#.XV5R_S2B1QI>.
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persons can be held accountable for their actions or omissions affecting our natural environment and provide adequate compensation for its wellbeing and welfare. In the same way as the Maltese delegation in 1992 Rio Earth Summit advocated for moving beyond simply recognising principles and act upon such convictions, the Maltese legislator ought to recognize that the principle of conservation of our natural environment is an established tenet of today’s society and thus requires holistic and comprehensive legal protection. This can be achieved through various ways and means and while the frameworks mentioned in this submission may be a good starting point, they are not to be interpreted restrictively as the only legal frameworks pursuing the rights and interests of our natural environment’s interests. A golden opportunity which should, or rather must, feature this issue is the upcoming constitutional reform to establish Malta’s second republic.96
9. Conclusion Nature has a right to co-exist and flourish just as much as we have on this planet. Even if we are to contend that we have a superior right over nature due to our composition and consciousness as human beings, this right of nature to co-exist and flourish can in itself be considered as an inherent concept within the rights of future human generations which is an already established right within the sphere of international law. Future generations have an equal right to enjoy and exist in this planet in the same way as we have inherited such rights from our predecessors and the latter from their own predecessors. Arguably the natural ecosystem is not the same as it was twenty years ago, let alone as it was one hundred years ago. Hence even if we were to focus solely on anthropocentric considerations, establishing legal personality frameworks and rights for nature can also be seen as respecting the rights of future generations in the enjoyment of this natural world and its resources. Assigning rights to nature may seem extreme and radical for some. 96 Jeremy Micallef, ‘Updated: President Vella launches constitutional reform public consultation exercise’ Independent, (2 August 2019) <https://www.independent.com.mt/articles/2019-08-02/local-news/President-Vella-launches-constitutional-reform-public-consultation-exercise-6736211742>.
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It may also be considered as a ‘hippie or tree-hugger’s utopian dream’. Its implications, both at a political as well as at a socio-economic level, can be diverse and require further studies. However, we have all seen this before. Not long-ago we used to live in a society in which people enjoyed a different set of rights according to their race and social status. Not long-ago societies discriminated against women as they were considered sub-ordinate to men and were not even afforded the right to vote in elections. Activists supporting these agendas in pursuit of racial, social and gender identity equality were for long considered as ‘extreme and radical’ just as we may at times consider environmentalists and their notions of prescribing rights and legal personality to nature to be of the same sort. Nonetheless nowadays we live in a world, and even more so country, which has overcome and championed over most of these past discriminatory albeit established practices. May we one day live in a society which recognizes and provides legal protection and enforceability to these ‘extreme and radical’ ideas of adequately safeguarding our natural environment.
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Ethan Brincat The Right to a Healthy Environment in the Constitution of Malta - Abstract of ‘The Second Republic: A Green One’
Ethan Brincat is a fifth-year law student currently reading for a Master of Notarial Studies degree at the University of Malta after having graduated as a Bachelor of Laws (Honours) in 2019. Though as a notarial student, his main area of practice is in civil law, he remains passionate about other areas, including international and constitutional law.
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I
n the years following independence and continuing until the present day, the first Maltese republic has aged steadily and the it is generally being felt that it no longer caters for some of the new political, legal, and social challenges that the Maltese State is currently facing at the local, European, and world levels. Chief among these challenges that the country is facing, and one which the Constitution contemplates only superficially, is the environment. One hopes that an eventually reconstituted Republic of Malta places the environment, specifically the right to a healthy environment, as a top priority. Act No. XXII of 2018 developed a declared constitutional principle that had sat unchanged since the original promulgation of the Constitution.1 Article 9 of the Constitution entitled ‘Safeguarding of landscape and historical and artistic patrimony’ falls under Chapter II, entitled ‘Declaration of Principles’. Before being amended by Act No. XXII of 2018, said article was very brief, and only read as follows: 9. The State shall safeguard the landscape and the historical and artistic patrimony of the Nation.2 This means that the legislator, way back in 1964, already thought that the ‘safeguarding of landscape and historical and artistic patrimony’ is a principle by which the State, eventually a Republic, is to operate. One would be disappointed to read that not only did Article 9 of the Constitution not formerly make express reference to the ‘environment’, but that the term ‘environment’ was not found anywhere else throughout the Constitution, including in the miscellaneous provisions of the Constitution under Chapter XI. The phenomenon of environmental awareness is perfectly captured by Raymond Mangion in his article entitled ‘Constitution and green rights’ for the 13 June 2015 issue of the Times of Malta, where he states that: The protection of the environment in Malta has, over the past months, been at the epicentre of discussion without precedent. It has never mobilised and brought together so many diverse groups of society with the object of inducing institutions and politicians to take environment 1 Parliament of Malta, Act No. XXII of 2018 ‘Constitution of Malta (Amendment) Act, 2018’. 2 Constitution of Malta, Chapter II ‘Declaration of Principles’, Article 9 ‘Safeguarding of landscape and historical and artistic patrimony.’
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protection more seriously. Also, public opinion is now wholeheartedly and strongly pleading for real enforcement.3 In the absence of the term ‘environment’, the Constitution referred to the ‘landscape’. The word ‘landscape’ was considered at that time to be the appropriate term to refer to the natural environment. ‘Landscape’ is usually a term used to refer to the environment in its entirety, that is the environment that surrounds the people and that is vital for them to survive and thrive. From this perspective, it evokes a sense of environmental wellbeing. One should also appreciate the fact that at the time of Malta’s independence, society might have conceived the term ‘environment’ as consisting mainly of the landscape. Over time, society came to realise that there is more to the environment than just the landscape for its existence. Thankfully, society’s environmental outlook today has widened to include ideas such as air, water, and light and noise pollution and therefore, it is no longer enough for the supreme law of a country to vaguely refer to the landscape alone and forsake other issues which are just as pressing, though perhaps less visual. It had to be Act No. XXII of 2018 to enshrine, for the first time, the term ‘environment’ in the Constitution. The legislator declared that Act No. XXII of 2018 was ‘An Act to amend the Constitution of Malta, to ensure that the environment is given recognition in the Constitution.’ The new Article 9 of the Constitution with the added sub-article (2) reads as follows: 9. (1) The State shall safeguard the landscape and the historical and artistic patrimony of the Nation. (2) The State shall protect the environment and its resources for the benefit of the present and future generations and shall take measures to address any form of environmental degradation in Malta, including that of air, water and land, and any sort of pollution problem and to promote, nurture and support the right of action in favour of the environment.4 Another important issue that Act No. XXII of 2018 did not extinguish was the issue of definition of the State’s obligation to ‘safeguard’. Fortunately, the term itself is inclusive of State measures rather than prohibitionist of 3 Raymond Mangion, ‘Constitution and green rights’ Times of Malta (Valletta, 13 June 2015) < https://timesofmalta.com/articles/view/Constitution-and-green-rights.572253 > accessed 18 April 2020. 4 Constitution of Malta, Article 9.
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the same. Before the amendment, there was absolutely no indication in the Constitution of how the State was to honour such a crucial obligation as per this principle. After the amendment, the State’s obligation to safeguard was widened to not only entail the landscape, and the historical as well as artistic patrimony, but also to include the protection and conservation of ‘the environment and its resources’. Interestingly, the notions of posterity and intergenerational equity were also introduced for the first time as the State’s obligation is now clearly aimed for ‘the benefit of the present of the present and future generations’. Once again, such a statement raises the question of how the State is to follow through with this now-wider obligation, for the sake of the Republic, under the declared principle. With the amendment, this question is now partially, albeit vaguely, answered. Sub-article (2) states that besides safeguarding and protecting, the State also has an obligation to ‘take measures to address any form of environmental degradation in Malta’. It can be presumed that the State is to ‘take measures’ through its three organs: the legislature, executive, and judiciary. The legislature, that is Parliament, composed of the Office of the President of Malta and the House of Representatives, is to continue to legislate rules, that must be followed by natural and legal persons alike in Malta in favour of the environment. The Laws of Malta contain hundreds of environmental laws and regulations arising either out of domestic legislation enacted by the Maltese Parliament, or through the transposition of European Union law directives, or through the ratification of public international law instruments. Each of these are meant to provide a legal basis by which the various enforcement entities within the executive, that is government, may exercise jurisdiction over. The various courts and tribunals constituted by the Constitution and other special laws are to be given the jurisdiction and the competence to interpret the rules created by the legislator and adjudicate cases of an environmental, administrative, or constitutional nature. The new sub-article (2) to Article 9 of the Constitution inserted term ‘environmental degradation’. Such term can be construed to ‘include’ degradation to the ‘air, water and land’ of Malta and ‘any sort of pollution problem’ affecting them. The legislator’s use of the word ‘include’ implies that the Maltese legal drafters did not want to close the constitutional door on the scientific study of environmental degradation. This can be compared back to how the 1964 legal drafters opted for the nowadays-vague term ‘landscape’, which is still present in sub-article (1), because the mindset in 300
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regard to environmental degradation at the time was restricted to that. Since the term ‘landscape’ has been left in, it is to be considered in a different perspective namely as to what landscape means today, thereby giving way to the ‘environment’. Another thing the legal drafters in 2018 wanted in their amendment was for the newly introduced sub-article (2) to be an indicative, rather than an exhaustive, provision. This is why they inserted the term ‘including’ so that not only do they manage to capture the contemporary mindset of environmental degradation of the ‘air’, ‘water’, and ‘land’, but to leave it open-ended so that future legal drafters or the participants of a future constitutional convention will be able to add to it as the circumstances of the time may necessitate. Lastly under sub-article (2), the State is obliged ‘to promote, nurture and support the right of action in favour of the environment.’ This means that the State must ‘promote’ the right of its citizens to bring an action before Maltese courts whenever they perceive that the executive institutions are actively participating or passively allowing their environment to be degraded. This promotion of ‘the right of action in favour of the environment’ is a further example of the State’s duty to ‘take measures’ through its judicial organ. Nurturing the ‘right of action’ may mean that at some point, there may be the introduction of a locus standi, that is a legal base from which citizens can challenge any law that the legislature may enact, that government may enforce, or that the judiciary may interpret, that goes against the guiding principles declared under Chapter II of the Constitution. Such a locus standi would be in the form of an enforceable human right under Chapter IV entitled ‘Fundamental Rights and Freedoms of the Individual’ of the Constitution as distinct from the right to life, as shall be discussed. To ‘support’ such a judicial right may mean that the State must take the side of the citizens that exercise it, by providing them with protection as the weaker parties to cases against big businesses and corporations as well as affluent lobby groups with a wealth of resources at their disposal by which they might seek to stifle such a right. As it stands, the principle in Article 9 of the Constitution is nonjusticiable, meaning that it may not form the subject-matter of an action for its enforcement by a person against the Maltese State before a Maltese court or tribunal because of the following Article 21 of the Constitution: 21. The provisions of this Chapter shall not be enforceable in any court, but the principles therein contained are nevertheless fundamental to the governance of the country and it shall be the 301
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aim of the State to apply these principles in making laws.5 Mangion refers to these declared principles as ‘second generation’ rights, meaning that they are fundamentally of an economic, social, and cultural nature. These are to be contrasted with human rights proper (‘first generation’ rights) under Chapter IV of the Constitution.6 While the former principles are unenforceable in court, the latter rights are, and fiercely so. Giovanni Bonello, in his article entitled ‘Misunderstanding the Constitution: A battery of pointless ‘principles’?’, for the 7 January 2018 issue of the Times of Malta, states that the principles declared under Chapter II of the Constitution were stripped of their potency. This took place when the Constitutional Court declared them to be unenforceable and reduced them to little more than guidelines in 1977, during the ten-year dispute between the government and Maltese doctors and subsequent strike by the latter. In the concluding paragraph to his contribution, Bonello states ‘There you have it – a potent tool for ensuring good governance has languished, debased and unused, for over half a century. Thank those courts which dismissed these principles as valueless and scrap.’7 Tonio Borg replied to Bonello’s ‘excellent piece’, in the 14 January 2018 issue of the Times of Malta entitled ‘Chapter II: a proper interpretation of its principles’. In the introductory paragraph, Borg regrets the opinion sometimes embraced by Maltese courts, including the Constitutional Court, that ‘Chapter II is merely a list of pious hopes not enforceable in a court of law, a mere cosmetic chapter even though contained in the highest law of the land.’ Instead, Borg writes, that ‘Chapter II and Chapter IV of our Constitution are therefore inextricably intertwined and do not have a separate existence.’8 Mangion explains that the ‘non-actionable’ principles under Chapter II of the Constitution are entrenched in the first tier, and therefore, they can be added to or ‘legislatively removed’ by an absolute majority in the House of 5 Ibid., Article 21 ‘Application of the principles contained in this Chapter.’ 6 Raymond Mangion, ‘Constitution and green rights’. 7 Giovanni Bonello, ‘Misunderstanding the Constitution: A battery of pointless ‘principles’?’ Times of Malta (Mriehel, 7 January 2018) < https://timesofmalta.com/articles/view/ Misunderstanding-the-Constitution-A-battery-of-pointless-principles-Gi.667330 > accessed 18 April 2020. 8 Tonio Borg, ‘Chapter II: a proper interpretation of its principles’ Times of Malta (Mriehel, 14 January 2018) < https://timesofmalta.com/articles/view/Chapter-II-a-proper-interpretation-of-its-principles-Tonio-Borg.667892 > accessed 18 April 2020.
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Representatives. Meanwhile, the rights and freedoms under Chapter IV of the Constitution are entrenched in the second tier and therefore, require a House majority of two-thirds.9 Borg agrees that declared principles are nonenforceable as substantive provisions because they are legal principles acting as the basis for of legal reasoning.10 The question now is what the implications would have been had the parliamentarians decided to entrench the right to a healthy environment as a ‘full-blown’ human right as other jurisdictions have done. The door is not yet closed on such a prospect as the addition of an ‘express locution’ for judicial enforceability of environmental rights remains in discussion before the possible proclamation of a second republic.11 This statement is something Borg does not agree with, having concluded his piece with the following: There is no need for a Second Republic to adjust this interpretation. What is needed is men of good will who avoid a positivist approach to law. Too many incidents in the past based on this view have distorted the true meaning of the Constitution. … The Constitution is a living instrument, but it remains a document. It can only be brought to life though constructive interpretation by fearless men and women who give a proper meaning to words aridly found in the Constitution.12 Therefore, the only constitutional remedy available to a plaintiff against the Maltese State is to bring an action under Article 33 of the Constitution entitled ‘Protection of right to life’: 33. (1) No person shall intentionally be deprived of his life save in execution of the sentence of a court in respect of a criminal offence under the law of Malta of which he has been convicted. (2) Without prejudice to any liability for a contravention of any other law with respect to the use of force in such cases as are hereinafter mentioned, a person shall not be regarded as having been deprived of his life in contravention of this article if he dies as the result of the use of force to such extent as is reasonably justifiable in the circumstances of the case 9 10 11 12
Raymond Mangion, ‘Constitution and green rights’. Tonio Borg, ‘Chapter II: a proper interpretation of its principles’. Raymond Mangion, ‘Constitution and green rights’. Tonio Borg, ‘Chapter II: a proper interpretation of its principles’.
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(a) for the defence of any person from violence or for the defence of property; (b) in order to effect a lawful arrest or to prevent the escape of a person lawfully detained; (c) for the purpose of suppressing a riot, insurrection or mutiny; or (d) in order to prevent the commission by that person of a criminal offence, or if he dies as the result of a lawful act of war.13 Maltese courts have traditionally been reluctant to accept an argument for the enforcement of the right to a healthy environment under the right to life. However, following a number of Continental European judgments, the need has arisen for Maltese courts to consider making a more flexible interpretation of the right to life to cater for environmental rights. An interesting development took place before Maltese courts in February 2019, relating to a number of class action lawsuits brought by workers who suffered harm at their workplace as a result of exposure to asbestos, a hazardous material, as well as family members of workers deceased due to the same. Whereas in prior judgments, Maltese courts had awarded damages in tort, within the limits allowed under that institute of civil law, 2019 marked the first time that a Maltese court, the First Hall of the Civil Court in its Constitutional Jurisdiction presided over by Mr Justice Joseph R. Micallef, awarded great constitutional damages. This was possible because of a flexible interpretation of Article 33 of the Constitution and Article 2 of the European Convention on Human Rights, both relating to the right to life.14 This thinking and reasoning of the Court is heavily inspired by the jurisprudence of the European Court of Human Rights. The ideal constitutional remedy that the author envisages is one where the spirit, if not the letter, of the non-justiciable Article 9 from Chapter II of the Constitution is replicated in a new article either under Chapter IV of the current Constitution or its equivalent in a new constitution. This would eliminate the need for the plaintiff/s in an action or class action against the State to prove 13 Constitution of Malta, Chapter IV ‘Fundamental Rights and Freedoms of the Individual’, Article 33 ‘Protection of right to life.’ 14 Council of Europe, European Convention on Human Rights, Section I ‘Rights and Freedoms’, Article 2 ‘Right to life’.
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the, at times unclear, link between environmental damage and the right to life. As it stands, if the plaintiff fails to prove that State action or inaction is in fact breaching their right to life, they risk having the case thrown out by the court. It would also eliminate the (over)stretching of the right to life by virtue of their being a specific human right to a healthy environment. Within the current constitutional framework, the author would include something along the lines of the following, placed right after Article 33 on the right to life to symbolise the complementary and supplementary relationship between the two rights: 33A. (1) No person shall, through any form of environmental degradation or pollution problem, be deprived of his right to live in a healthy environment. (2) For the purposes of this article, the term “environment” shall include (a) The air; (b) The water; (c) The land; and (d) Living and non-living resources. (3) No person shall be deprived of his right to enjoy the historical and artistic patrimony of the Nation.15 This would mean that the individual would have a right of action in favour of the environment directly under this hypothetical ‘Article 33A’ on the right to a healthy environment should the State fail in its obligation to protect and conserve the environment, as in Article 9(1), without having to prove the causal link between the State’s active or passive failure and the breach of the right to life under Article 33. Article 2 of the European Convention on Human Rights on the right to life states the following: ARTICLE 2 15
This is a fictional article.
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Right to life 1. Everyone’s right to life shall be protected by law. No one shall be deprived of his life intentionally save in the execution of a sentence of a court following his conviction of a crime for which this penalty is provided by law. 2. Deprivation of life shall not be regarded as inflicted in contravention of this Article when it results from the use of force which is no more than absolutely necessary: (a) in defence of any person from unlawful violence; (b) in order to effect a lawful arrest or to prevent the escape of a person lawfully detained; (c) in action lawfully taken for the purpose of quelling a riot or insurrection.16 From this, one can see that Article 33 of the Constitution is almost an exact replica of Article 2 of the ECHR. A great part of the argumentation on the environment before the ECtHR takes place under the right to life. Section I of the ECHR on rights and freedoms, on which Chapter IV of the Constitution of Malta is based, also lacks a specific human right pertaining to the environment. A possible reason for this is that the right to life has been interpreted flexibly to include the right to a healthy environment. If one were to keep on adding text to human rights one runs the risk of making them exclusive rather than inclusive. One might say that Malta has made a ‘Great Leap Forward’ in human rights. Starting from the Constitution of Malta of 1964 with a noble declaration of principles under Chapter II and a ‘Bill of Rights’ under Chapter IV, the latter being fashioned after the time-tested ECHR, the first republic is already firmly with the European fold. However, an enforceable right to a healthy environment is a must, either as part of the continuing evolution of the first republic, or as part of a metamorphosis into a second, greener, republic. Given that a lot of the legal framework for a green republic is in place, there might not even need to be a second republic for Malta to be ‘crowned’ with a right to a healthy environment in its Constitution. What matters to the 16
European Convention on Human Rights, Article 2.
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individual is the presence of a legal base from which they can enforce their precious right. This looks and seems to be achievable without the need for a second republic as what is needed for the most part is stronger enforcement procedures.
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Maria Chetcuti-Cauchi Malta’s new Trademark Act and Trade Secrets Laws 2019
Dr Maria Chetcuti Cauchi is a senior partner at Chetcuti Cauchi and heads the Real Estate and Intellectual Property & ICT practices. Throughout her years of experience, Maria assisted clients in various Intellectual Property aspects, including IP planning, business and brand protection, branding strategy and structuring and transfer of technology agreements. Maria has represented clients from the automobile, agricultural, food and beverages, personal care, consumer electronics, furniture, gaming and software industries. Maria also specialises in real estate transactions focusing on providing bespoke advice to buyers seeking to invest in Malta through the use of investment and holding vehicles, structured asset plans, private equity and real estate funds, special purpose vehicles and trusts.
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1. EU 1.1 Trademarks
H
aving regard to the crucial economic position of trademark rights and regulation within the EU and within the national economies of all Member States, the EU embarked on an exercise for the total reform of its trademark legislation in 2008. It was felt that such review of the functioning of the trademark system in Europe was required for various reasons, including: • further harmonising the national laws of Member States; • streamlining of procedures; • facilitation of cooperation between Member States; • supporting anti-counterfeiting initiatives and actions; and • to improve trademarks systems to reflect the modern business environment. In 2009, the Max Planck Institute1 was tasked with the review of such laws, resulting in a report to the Commission which launched its proposal for the revision of the Trademarks Directive and the Regulation in March 2013. Following a process of drafts, consultations and revisions, the European Parliament finally approved the European Trademark Reform Package in December 2015. The new European Union Trademark Regulation and the new Trademark Directive were published in the Official Journal of the European Union on 24 and 23 December 2015 respectively. The Regulation (EU) 2015/2424 entered into force on 23 March 2016. Member States had until 14 January 2019 to transpose the provisions of Directive (EU) 2015/2436, which entered into force into national laws 20 days after publication. Directive 2008/95/EC was repealed with effect as of 15 January 2019. 1
One of the 84 research institutions operated by the Max Planck Society.
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2. Malta 2.1 Trademarks With regards to trademark law, from a Maltese trademark perspective, for many years, the main law governing such matters was the Trademarks Act 2000 (“the Old Trademarks Act”). Four years after the enactment of the EU Trademark Regulation listed above, Malta revised its TM laws with the salient objective to transpose the provisions of Directive 2015/2436. The new Malta Trademarks Act (‘the New Trademarks Act’)3 has approximated our local trademark laws to the collection of EU Trademark laws as well as the domestic trademark laws of the other EU Member States. Whilst upholding that the Commercial Code,4 the Enforcement of 2 Act XVI of 2000 which came into force on the 01st January 2001, as Chapter 416 of the Laws of Malta. 3 Act XII of 2019 which came into force on the 14th May 2019, as Chapter 597 of the Laws of Malta. 4 Commercial Code (Chapter 13 of the Laws of Malta).
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Intellectual Property (“IP”) Rights (Regulations) Act,5 and the Intellectual Property Rights (Cross-Border Measures) Act6 are important legislative sources for trademark rights and protection in Malta, the publishing of the New Trademarks Act represents an important milestone in the development of Malta’s trademark legislation. The New Trademarks Act amplified the extent of protection, modernised traditional trademark law to bring it in line with new technologies and increased the level of protection for brand owners. Below is a representation of the salient features. 2.2 Trade Secrets With regards to Trade Secrets, before the enactment of the new Trade Secrets Act7, Malta relied purely on contract law when it came to the protection of proprietary know-how or proprietary technology. The new Trade Secrets Act transposed Directive (EU) 2016/943 on the Protection of Undisclosed Know-How and Business Information (trade secrets) against their Unlawful Acquisition, Use and Disclosure (“the Directive”). The question begs: why are trade secrets so important that they require special protection? The process of research and creation leads to development of substantial knowledge that might often fall outside the scope of the protection provided by traditional Intellectual Property Rights (IPRs). Furthermore, some enterprises might not find it apt for their information to be protected through such traditional IPRs. Having said that, such information is invaluable for industry innovation and competitiveness and such trade secrets need to be kept “confidential” as the contrary would deter enterprises from investing heavily in their R&D.
5 Enforcement of Intellectual Property Rights (Regulation) Act (Chapter 488 of the Laws of Malta). 6 Intellectual Property Rights (Cross-Border Measures) Act (Chapter 414 of the Laws of Malta). 7 Act XXIX of 2018 which came into force on the 14th May 2019, as Chapter 589 of the Laws of Malta.
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2.2.1 Definition Despite various mentions scattered in different pieces of Maltese legislation, before the implementation of the new Trade Secrets Act, Maltese law provided no formal definition of ‘trade secret’. Such scattered references were purely conceptual and trade secrets per se were never formally defined or properly regulated. In fact, trade secrets holders would many times commonly safeguard their rights and interests through fiduciary obligations and non-disclosure agreements, with contract law being the main limb of law covering this area. Some noteworthy and well-known trade secrets are Coca-Cola’s Coke recipe, KFC’s chicken coating recipe, the Google algorithm, or the New York Times Bestseller List. Other examples include business methods, market analyses, business relationships, pricing information, office techniques, customer or supplier lists and related data, recipes, computer programmes and computer databases. 2.2.2 Protection Again, before the enactment of the Malta New Trade Secrets Law, there was no specific source of law for trade secrets protection. The most significant provisions which were usually used to protect trade secrets were set forth in: • The Maltese Civil Code8 - with its provisions on fiduciary obligations that could apply in certain circumstances to protect trade secrets, in particular, those obligations arising by virtue of law, contract, quasi-contract, trusts, assumption of office or behavior and when a person receives information from another person subject to a duty of confidentiality and he or she is aware, or should have been aware, that the use of such information was meant to be restricted. A fiduciary is obliged by law to carry out his or her obligations with utmost good; 9 • The Maltese Criminal Code10 - although this law does not directly deal with trade secrets, it regulates certain general offences which can be applied to trade secrets, in particular, the 8 9 10
Civil Code (Chapter 16 of the Laws of Malta) ibid, Article 1124A Criminal Code (Chapter 9 of the Laws of Malta)
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general offence related to the disclosure of professional secrets that punishes any person who discloses a secret of another, obtained by reason of its profession or office. 11 Another general provision that could potentially apply to trade secrets concerns the disclosure of secrets by public officers or servants.12 • The Maltese Competition Act13 - again, although this law does not directly deal with trade secrets, it also contains general provisions which could have potentially be applied to trade secrets, in particular, if the disclosure or unauthorised use of trade secrets causes a practice prohibited under the Maltese Competition Act, such as the abuse of a dominant position,14 or an agreement with the effect of distorting, preventing or restricting competition.15
3. The New Trademarks Act, 2019 3.1 New Trademark Typologies The Old Trademarks Act defined a trademark as any sign capable of being represented graphically; and which is capable of distinguishing goods or services of one undertaking from those of other undertakings. A glance at a broad definition of the generic term “sign” in the Oxford English Dictionary provides that a sign is ‘[a] symbol or word used to represent an operation, instruction, concept, or object in algebra, music, or other subjects’.16 Accordingly, the said term can be broadly deemed as inclusive of the terms “design” and “colour”, which have been expressly included in the introduced Act. However, it is also possible to hold that the inclusion 11 ibid, Article 257 12 ibid, Article 133 13 Competition Act (Chapter 379 of the Laws of Malta) 14 ibid, Article 9 15 ibid, Article 5 16 LEXICO powered by OXFORD, <https://www.lexico.com/en/definition/sign>, accessed 11 December 2019.
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of “sounds”, as a separate and isolated term altogether in the introduced Act, eliminated any potential ambiguity and/or claims, thereby providing definitive confirmation and protection to proprietors upon such means of communication and unique identifiers. Service marks, collective marks and certification marks are also covered by the New Trademarks Act. It is with relief that one notes that “unconventional trademarks” have been introduced in the New Trademarks Act. This is a welcome novelty aligning traditional trademark law with modern and novel scenarios. Sound, movement, colours, patterns and olfactory (relating to the sense of smell) marks are a few examples. The New Trademarks Act does away with the obligation to represent the trademark graphically within the registration process, hence opening doors to applications of new categories of marks that can be filed and represented through widely acceptable and available technology, as long as this representation is clear, precise, autonomous, easily accessible, intelligible, durable and objective.17 Older national and regional systems did not permit this, with cases such as the landmark Sieckmann case, delineating that the criteria for a mark to be eligible for registration are difficult to reach unless a graphical representation is possible.18 The case is widely recognised as a landmark decision of the CJEU on the graphical representation of non-conventional trademarks such as the “methyl cinnamate” scent, which the applicant had described as ‘balsamically fruity with a slight hint of cinnamon’. The CJEU had ruled that: • a chemical formula depicting this scent did not represent the odour of a substance and was not sufficiently intelligible, nor sufficiently clear and precise; • a written description was not sufficiently clear, precise and objective; and • a physical deposit of a sample of the scent did not constitute a graphic representation and was not sufficiently stable or durable. Considering that within the gamut of EU case law, a conservative approach had been adopted along the years, the new Maltese Act is a major steppingstone to modern interpretation, in that by doing away with the obligation to 17 18
Example JPEG, Text, MP3 and MP4 formats. Case C-273/00 Sieckmann v German Patent and Trademark Office (2002)
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represent a mark graphically, it guarantees greater flexibility to companies to practically apply for the registration of ANY type of mark. The sign should be able to be represented in any suitable form using the generally available technology, and therefore not necessarily by means of graphic tools, provided that the representation offers sufficient guarantees in this sense.19 3.2 Search and Opposition Rules The Trademark Search and Opposition Rules20 came into force on Friday 26th October 2018, heralding a change in the trademark procedure for searches and opposition for trademark applications received on or after the above date. 3.2.1 Search Process The search process has now been simplified and limited to a search in the Maltese national database. Under the Old Trademarks Act, the examiner was expected to compare search results from the EUIPO and Malta Register to the proposed mark and make a decision on each result prior to effecting a final decision on whether a trademark may be registered in Malta or not. By means of the change in the New Trademarks Act, applicants applying to register a trademark in Malta will not have their requests turned down on the basis of EU registered trademarks, where trademark owners might have no intention of ever using such registered trademarks in Malta. 3.2.2 Opposition Process Under the Old Trademarks Act, trademark owners were not permitted to oppose the registration of another trademark whilst the trademark was in the process of being registered before the Industrial Property Registrations Directorate (IPRD). Their only remedy was in court. The New Law now allows the possibility of trademark owners to prevent and stop conflicting marks 19 Article 13 of Directive (EU) 2015/2436. 20 Subsidiary Legislation (SL) 597.03 entitled Trademark Search and Opposition Rules (Legal Notice 343 of 2018)
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from being formally registered in the first place. The process now permits that within 60 days from the publication of the new trademark application on the IP Online Journal, the TM existent owner/holder can initiate proceedings for opposition before the IPRD. This would be a process that precedes any initiation of proceedings before the courts of Malta for any invalidation or revocation of an existent registration. The IPRD would take a decision on whether to accept or refuse the opposition. The decision of the Office can be appealed before the Court of Appeal. Final registration of the application would be published on the IP Online Journal. 3.3 The Exclusion of Functionality Another substantive major change under the New Law relates to the extension of the functionality exclusion.21 Under the Old Law, a trademark was deemed to be functional (and hence non-registrable) only if it resulted from the shape of a trademark. Article 5 of the New Law expands the extent of the functionality exclusion to encapsulate the ‘shape, or another characteristic’ of a mark. Therefore, any characteristic of a trademark which may be considered “functional” can now form the basis of an objection to a trademark registration. 3.4 Grounds for Refusal 3.4.1 Absolute Grounds The New Trademarks Act stipulates that some marks shall not be registered as trademarks and, if already registered, shall be liable to be declared invalid. These would be marks that fall within the list of trademarks that are refused or invalidated under absolute grounds for refusal or invalidity22. These would be: a. signs that cannot constitute a trademark; b. trademarks that are devoid of any distinctive character; c. trademarks that consist exclusively of signs or indications that may serve, in trade, to designate the kind, quality, intended 21 22
Article 4(2) of the old Trademarks Act (Chapter 416 of the Laws of Malta) Trademarks Act, Chapter 597 of the Laws of Malta, Article 5
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purpose, value, geographical origin, the time of production of goods or of rendering of the service, or other characteristics of the goods or services; d. trademarks that consist exclusively of signs or indications that have become customary in the current language or in the bona fide and established practices of the trade; e. signs that consist exclusively of: • the shape, or another characteristic, that results from the nature of the goods themselves; • the shape, or another characteristic, of the goods that is necessary to obtain a technical result; or • the shape, or another characteristic, which gives substantial value to the goods; f. trademarks that are contrary to public policy or to accepted principles of morality; g. trademarks that are of a nature as to deceive the public or are likely to deceive the public, such as to the nature, quality or geographical origin of the goods or services; h. trademarks that have not been authorised by the competent authorities and are to be refused or invalidated pursuant to Article 6 of the Paris Convention; i. trademarks that are excluded from registration pursuant to Paris Union legislation, the Laws of Malta or international agreements to which the Paris Union or Malta is a party, providing protection of designations of origin and geographical indications; j. trademarks that are excluded from registration pursuant to Paris Union legislation or international agreements to which the Paris Union is a party, providing for protection of traditional terms for wine; 320
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k. trademarks that are excluded from registration pursuant to Paris Union legislation or international agreements to which the Paris Union is a party, providing for protection of traditional specialities guaranteed; or l. trademarks that consist of, or reproduce in their essential elements, an earlier plant variety denomination registered in accordance with Paris Union legislation or the Laws of Malta, or international agreements to which the Paris Union or Malta is a party, providing protection for plant variety rights and that are in respect of plant varieties of the same or closely related species. An exception to the above lies in situations where if, before the date of application for registration, or before the date of action for a declaration of invalidity, a trademark had acquired a distinctive character as a result of the use made of it in Malta, then such a mark would not be refused registration or declared invalid. A trademark shall also be liable to be declared invalid where the application for registration of the trademark was made in bad faith by the applicant.23 Similarly, a trademark shall not be registered or, if registered, is liable to be declared invalid where and to the extent that: (a) the use of that trademark may be prohibited pursuant to provisions of law other than trademark law of Malta or of the Union; (b) the trademark includes a sign of high symbolic value, in particular a religious symbol; (c) the trademark includes badges, emblems and escutcheons other than those covered by Article 6 of the Paris Convention and which are of public interest, unless the consent of the competent authority to their registration has been given in conformity with the laws of Malta.24 23 24
ibid, Article 5(2) ibid, Article 5(3)
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A trademark which consists of or contains: (a) the arms, or any of the principal armorial bearings of the arms appertaining to the President or the Roman Catholic Archbishop of Malta, or any insignia or device so nearly resembling such arms or any such armorial bearing as to be likely to be mistaken for them or it; (b) a representation of the Presidential or Episcopal flags; (c) a representation of President or the Archbishop, or any colourable imitation thereof; or (d) words, letters or devices likely to lead persons to think that the applicant either has or recently has had Presidential or Episcopal patronage or authorisation, shall not be registered unless it appears to the Comptroller that consent has been given by or on behalf of the President or the Archbishop. The proviso further provides that the Minister may by regulations extend the applicability of the provisions of this sub-article to apply mutatis mutandis in respect of religions other than the Roman Catholic Apostolic Religion.25 The law continues to provide other situations where the trademark would either be refused registration or, if registered, would be considered to be invalid. These would cover matters such as: •
trademarks which consists of a representation of the national flag of Malta;
•
trademarks which contain a representation of the national flag of Malta shall not be registered if it appears to the Comptroller that the use of the trademark would be misleading or grossly offensive.26
A trademark shall not be registered in the cases specified in Article 127 or Article 128 except as provided in said New Trademarks Act. Article 127 provides that: 25 26
ibid, Article 5(4) ibid, Article 5 (5)
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ibid, Article 127
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intergovernmental organisations of which one or more Convention countries are members. A trademark which consists of or contains any such emblem, abbreviation or name which is protected under the Paris Convention shall not be registered without the authorisation of the international organisation concerned, unless it appears to the Comptroller that the use of the emblem, abbreviation or name in the manner proposed : (a) is not such as to suggest to the public that a connection exists between the organisation and the trademark; or (b) is not likely to mislead the public as to the existence of a connection between the user and the organisation. The provisions of Article 128 relative to emblems of an international organisation apply equally to anything which from a heraldic point of view imitates any such emblem. The New Trademarks Act provides that, by virtue of Article 128 the authorisation of an international organisation is or would be required for the registration of a trademark, and that organisation is entitled to restrain any use of the mark in Malta which is being used without its authorisation. The Article ends by providing that if bona fide use of the trademark in question began before 1st January 2000, then nothing in the New Trademarks Act affects the right of such a bona fide person.28 3.4.2 Relative Grounds The New Trademarks Act also provides for situations related to relative grounds of refusal. A trademark may not be registered or if already registered, shall be declared invalid, if: • 28
it is identical to an earlier trademark, and the goods or services for which the trademark is applied to or is registered are identical with the goods or services for which the earlier trademark is ibid, Article 128
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protected;29 •
due to its identicality with, or similarity to, an earlier trademark and the identity or similarity of the goods or services covered by the trademarks, there exists a likelihood of confusion on the part of the public, including the likelihood of association by the public with the earlier trademark;30
•
the mark is identical with, or similar to, an earlier trademark, irrespective of whether the goods or services for which the trademark is applied are identical with, similar or not similar to those for which the earlier trademark is protected where the earlier mark has a reputation in Malta or, in the European Union in the case of an EU trademark, has a reputation in the Paris Union and the use of such a later trademark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier trademark;31
•
the agent or representative of the proprietor of the trademark applies for registration thereof in his or her own name without the proprietor’s authorisation, unless the agent or representative justifies his action;32
•
an application for a designation of origin or a geographical indication had already been submitted in accordance with the Paris Union legislation or the laws of Malta prior to the date of application for registration of the trademark or the date of the priority claimed for the application, subject to its subsequent registration33 and the mentioned designation of origin or geographical indication confers the right to prohibit use of a subsequent trademark on the person authorised under the relevant law to exercise the rights arising therefrom;34
•
rights to a non-registered trademark or to another sign used in the course of trade which were acquired prior to the date
29 30 31 32 33 34
ibid, Article 6(1)(a) ibid, Article 6(1)(b) ibid, Article 6(3)(a) ibid, Article 6(3)(b) ibid, Article 6(2) ibid, Article 6(3)(c)(ii)
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of application for registration of the subsequent trademark, or the date of priority claimed for registration of the subsequent trademark, and that non-registered trademarks or other signs confer on its proprietor the right to prohibit the use of the subsequent trademark35 and to the extent that the use of the trademark may be prohibited by virtue of an earlier right, subject to some exceptions, and protected by means of copyright, registered designs or other rights that the Minister may prescribe by regulation.36 A trademark shall not be refused registration or declared invalid where the proprietor of the earlier trademark or other earlier right consents to the registration of the later trademark.37 Also, where grounds for refusal of registration or for invalidity of a trademark exist in respect of only some of the goods or services for which that trademark has been applied or registered, refusal of registration or invalidity shall cover those goods or services only.38 Earlier marks39 are defined as: (a) trademarks of the following kinds with a date of application for registration which is earlier than the date of application for registration of the trademark, taking account, where appropriate, the priorities claimed in respect of those trademarks: (i)
EU trademarks
(ii)
trademarks registered in Malta
(iii) trademarks registered under arrangements which have effect in Malta;
international
(b) EU trademarks which validly claim seniority, in accordance with Regulation (EU) No. 2017/1001, of a trademark referred to in sub-article (2)(a)(ii) and (iii), even when the latter trademark has been surrendered or allowed to lapse; 35 36 37 38 39
ibid, Article 6(4)(a) ibid, Article 6(4)(b) ibid, Article 6(5) ibid, Article 6(9) ibid, Article 6(3)(c)(i)
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(c) Applications for the trademarks referred to in sub-article (2) (a) and (b), subject to their registration; (d) Trademarks which, on the date of application for registration of the trademark or, where appropriate, of the priority claimed in respect of the application for registration of the trademark, are well-known in Malta, in the sense in which the words “wellknown” are used in Article 6 bis of the Paris Convention. By way of procedure, the main progress under the New Law was the introduction of a process for the resolution of “relative grounds” disputes. Under the Old Law, an objection to a trademark registration when this conflicted with a pre-existent registered mark could only be raised by the Malta IPRD. Applicants, in turn, were offered only two options for objection: (1)
comply to registration conditions set by the IPRD; or
(2)
argue their case before the IPRD.
Once registered there was only one route available to owners for recourse, which was a court suit before the First Hall of the Civil Court. Under the New Law, new solutions have been provided in that the Comptroller shall examine whether an application for registration of a trademark satisfies the requirements of this New Trademarks Act, but it also allows the Minister to prescribe regulations as to whether such an examination shall include ex officio relative grounds for examination.40 For the time being, it seems that the role of the IPRD will be limited to the examination of trademark applications on absolute grounds only. The Trademark Search and Opposition Rules41 only require the Directorate to carry out “relative searches” for the purposes of notifying owners of identical or similar marks once a trademark application has been filed. The ultimate responsibility for objection to a trademark application, before registration, will at the end, fall upon trademark owners. 40 ibid, Article 48 41 Subsidiary Legislation (SL) 597.03 entitled Trademark Search and Opposition Rules (Legal Notice 343 of 2018)
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3.5 Classification of Goods Under the New Trademarks Act, we find a clear delineation and reference as to which system needs to be applied when dealing with the classification of goods and services. Whereas under the Old Law it was stated that: (1) Goods and services shall be classified for the purposes of the registration of trademarks according to such system of classification as may be prescribed; and (2) Any question arising as to the class within which any goods or services fall shall be determined by the Comptroller, whose decision shall be final,42 The New Law provides us with a more specific indication of the manner in which goods and services should be classified and delineates that the goods and services in respect of which trademark registration is applied for shall be classified in conformity with the system of classification established by the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957 (“the Nice Classification”).43 Article 45 gives further details in that it provides that: • the goods and services for which protection is sought shall be identified by the applicant with sufficient clarity and precision to enable the competent authorities and economic operators, on that sole basis, to determine the extent of the protection sought; • the Office shall reject an application in respect of indications or terms which are unclear or imprecise, where the applicant does not suggest an acceptable wording within a period set by the Office to that effect; • the use of general terms, including the general indications of the class headings of the Nice Classification, shall be interpreted as including all the goods or services clearly covered by the literal meaning of the indication or term. The use of such terms or indications shall not be interpreted as comprising a claim to 42 43
Old Trademarks Act, Chapter 416 of the Laws of Malta, Article 32 Trademarks Act, Article 45
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goods or services which cannot be so understood; • where the applicant requests registration for more than one class, the applicant shall group the goods and services according to the classes of the Nice Classification, each group being preceded by the number of the class to which that group of goods or services belongs, and shall present them in the order of the classes; • goods and services shall not be regarded as being similar to each other on the ground that they appear in the same class under the Nice Classification. Goods and services shall not be regarded as being dissimilar from each other on the ground that they appear in different classes under the Nice Classification; • any question arising as to the class within which any goods or services fall shall be determined by the Comptroller, whose decision shall be final. 44 The above reliance on the Nice Classification are a far cry from the previous Act, since the Old Law did not provide us with any details or accurate information for such classification. The above definitely gives more certainty to any applicant when it comes to classifying the goods and services that the mark will represent. 3.6 Official Indication that a Mark is a Trademark A welcome addition to the New Trademarks Act is related to the reproduction of trademarks in reference works. Under the new law, the proprietor of a trademark can call upon publishers of encyclopedias, dictionaries or similar reference works (whether in print or electronic format) to include, in their publication, an indication that the trademark is a registered trademark. This procedure is expected to aid right-holders in avoiding that their mark is diluted, becomes a generic term and no longer benefits from formal protection.45
44 45
ibid, Article 45(2),(4),(5),(6),(7) & (8) ibid, Article 14
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4. The New Trade Secrets Act 4. 1 Definition Notwithstanding that trade secrets are still an unregistrable intellectual property right, it is fair to say that the Maltese New Trade Secrets Act46 has upgraded this legal concept to a higher status by giving it official legal recognition in a formal Act of Law as well as granting increased certainty to the right holder. The said Act incorporated the main objectives of the Directive (EU) 2016/943 by: • ensuring an equivalent level of protection of trade secrets to that of the EU and other Member States; • adopted a uniform definition of the term “trade secret”; and • provided common measures against the unlawful acquisition, use, and disclosure of trade secrets. It defines a “trade secret” as a method of information which meets all the following cumulative requirements: (a) It is capable of being a secret, i.e. generally not known among or accessible to persons within the circles that normally deal with that kind of information; (b) has commercial value because it is secret; and (c) it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.47 4.2 Lawful & Unlawful Acquisition, Use & Disclosure Part of the objectives of the Trade Secrets Act is to set out rules to safeguard against the unlawful acquisition, use and disclosure of trade secrets. 46 47
Trade Secrets Act, Chapter 589 of the Laws of Malta ibid, Article 2
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The law provides that the acquisition of a trade secret without the consent of the trade secret holder shall be considered unlawful, whenever carried out by: (a) unauthorized access to, appropriation of, or copying of any documents, objects, materials, substances or electronic files, lawfully under the control of the trade secret holder; and (b) any other conduct which is considered contrary to honest commercial practices.48 Additionally, the unlawful use or disclosure of a trade secret happens when carried out by a person who acquired the trade secret unlawfully; or was in breach of a confidentiality agreement or a duty not to disclose the trade secret; or in breach of a contractual or other duty to limit the use of the trade secret.49 The acquisition, use or disclosure of a trade secret is also to be considered unlawful whenever a person, at the time of the acquisition, use or disclosure, knew or ought to have known that the trade secret had been obtained directly or indirectly from another person who was using or disclosing the trade secret unlawfully within the meaning of sub-article (2) above.50 Similarly, the production, offering or placing on the market of infringing goods, or the importation, export or storage of infringing goods for those purposes, is also considered an unlawful use of a trade secret where the person carrying out the activity knows or ought to have known that the trade secret was used unlawfully.51 The law also provides for situations where an application for the measures, procedures and remedies provided for in the New Trade Secrets Act shall be dismissed where the alleged acquisition, use or disclosure of the trade secret is carried out in any of the following cases (exemptions from infringement): (a) for exercising the right to freedom of expression and 48 ibid, Article 6(1) 49 ibid, Article 6(2) 50 ibid, Article 6(3) 51 ibid, Article 6 (4) – “Secondary liability” which refers to those cases where the recipient knew that the trade secret was unlawfully obtained from another.
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information as set out in the Charter of Fundamental Rights of the European Union, the Constitution of Malta and the European Convention Act including respect for the freedom and pluralism of the media; (b) for revealing misconduct, wrongdoing or illegal activity, provided that the respondent acted for the purpose of protecting general public interest; (c) disclosure by workers to their representatives as part of the legitimate exercise by those representatives of their functions in accordance with the law, provided that such disclosure was necessary for that exercise; or (d) any disclosure by an employee to a whistle-blowing reporting officer or a whistle-blowing reports unit as provided for in the Protection of the Whistleblower Act; and/or (e) for the purpose of protecting a legitimate interest recognised by law.52 The remedies provided by the New Trade Secrets Act in cases of infringement include: • • •
the award of damages to the right holder; imposition of sanctions on the infringer; and publication of the court decisions.
The law also provides for the preservation of confidentiality of the trade secrets in the course of legal proceedings and the provision of provisional and precautionary measures.53 4.3 Employment It is apt to also assess the implications of the New Trade Secrets Act on the employer-employee relationship. The “trade secret holder” is defined by law as either a company or 52 53
ibid, Article 7 ibid, Article 9
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individual who has the right to manipulate or exploit the trade secret. In the case of an employer-employee situation, the trade secret holder would many times be the employer with the trade secret being used or worked with during the day-to-day running of the business. As with any other IP right, the realm of trade secrets seeks to strike a balance between the rights of the holder and the rights of other stakeholders within society at large. The Trade Secrets Act in fact seeks to maintain equilibrium between the right to protect such trade secrets and worker protection. This is achieved even through the introduction of safeguards to employees and their representatives. The safeguards provide that nothing in the Trade Secrets Act is to be understood to offer any ground for restricting the mobility of employees and in particular, the law shall not provide any ground for: (a) limiting employees’ use of information that does not constitute a trade secret; (b) limiting employees’ use of experience and skills honestly acquired in the normal course of their employment; and/or (c) imposing any additional restrictions on employees in their employment contracts other than those restrictions imposed by law.54 Since trade secrets are not registrable, formal steps need to be taken to show that protective measures have been taken in order for a given piece of information to be granted “trade secret status”. Businesses should consider adopting some or all of the following: (1) Non-disclosure agreements; (2) Confidentiality agreements and clauses; (3) Termination forms; (4) Written employee policies defining the employees’ rights and obligations; 54
ibid, Article 4(2)
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id-dritt (5) Technical and physical security measures, including passwords, encryption and data access limitations, and (6) Company handbooks: • explaining different IP rights, including trade secrets; • clarifying that the holder of such IP rights is the company; • listing the company’s trade secrets; • explaining how such information is to be handled with additional levels of secrecy. Employers need to ensure that the above measures are in conformity with the law and do not exceed the limits imposed by such law. The implementation of the New Trade Secrets Act by the Courts will be interesting to follow. A noteworthy recent judgement that dealt with trade secrets and fiduciary obligations (albeit prior to the implementation of this Act) is the case of M.A.I.N. Services55. It is interesting to note that the judgement did not merely examine in extensive detail the nature and the effects of fiduciary duties but also dealt with the concept of trade secrets theft and misappropriation of confidential business information by the defendant. Galea (the defendant) had previously been an employee and director of the company M.A.I.N. Services Ltd (the plaintiff). Eventually he resigned from his position and a key foreign supplier ended its business relationship with the business relations with Galea. In its analysis, the Court observed the following: • the business that the defendant was planning to open was in the same line of operation of the plaintiff; • the defendant had shown signs of opening his own business 55 (2017).
M.A.I.N. Services Limited v Galea Albert Pro, App. No. 1246/2007, First Hall Civil Court
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before he resigned from his position with the plaintiff and had even applied for his own VAT number before his official resignation; • due to his position as employee/director, the defendant used to solely represent the plaintiff company with the foreign supplier and had intimate knowledge of this supplier; • the defendant had access to sensitive data belonging to the company. In view of the above, the Court concluded that the defendant could not proceed to open an identical or quasi-identical business to that of the plaintiff due to the fact that the defendant had been entrusted with a fiduciary position, and such fiduciary duty persisted post-resignation.
5. Conclusions The changes presented in the New Trademarks Act have been welcomed by industry and right-holders alike. Such changes have achieved a higher level of modernisation and clarification to this area of law. The widening of the scope of a trademark to better align it with modern definitions; the removal of the requirement of graphical representation of a mark; the opening for non-conventional marks to successful registration; the streamlining and introduction of a new opposition procedure; and the introduction of a procedure for the resolution of disputes based on “relative grounds” opposition, are all welcome additions to the previous laws and regulations. This revision has enabled Maltese trademark law to advance to a level that is conformant to its European counterpart, whilst at the same time also creating an assimilation to the local laws of individual member states. The main aim behind such changes was the strengthening of the gamut of local laws and regulations covering this topic, in particular the introduction of opposition proceedings prior to the registration of a trademark, hopefully providing for a more equitable and practical procedure. Similarly, the New Trade Secrets Act was a very welcome addition to 335
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the whole range of laws regulating IPRs. According to national experts, the previous sporadic legal system touching upon trade secrets used to deter right-holders from bringing an action before the courts due to the lack of formal legal recognition and protection of such secrets. Previously, any plaintiff would have to face an uphill struggle in obtaining recognition for his/her rights and for the enforcement thereof. Trade secrets do not need to be novel; protection does not require registration or payment of any official fee (as opposed to trademarks, patents or designs) and is not for a limited period. For these reasons, the protection of valuable business information under the Act has become particularly attractive to SMEs who are planning to invest more in R&D and creative solutions but are looking for higher levels of legal certainty.
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