Malta: Latent Defects And The Actio Aestimatoria

In the case George Borg Marks and Joan Borg Marks (the "Plaintiffs") vs. Yolo Properties Limited (the "Defendant"), Honourable Judge Audrey Demicoli examined the notion of latent defects, the period within which a claim for latent defects must be brought (in the case of immovable property), the moment from which such period starts to run, and the remedial action which is available should the Plaintiff succeed in brining such action. The case was decided on the 11 February 2022 before the First Hall Civil Court (the "Court").

The facts of the case are as follows; On the 31 May 2019 the Plaintiffs bought an apartment (the "Apartment") from the Defendants who sold the apartment to the Plaintiffs in what they deemed to be a finished state. All costs for finishings were also included within the purchase price.

Whilst inhabiting the Apartment, the Plaintiffs slowly became aware of certain latent defects (being hidden defects which render the item sold unsuitable for its use). From October 2019 up until June 2021, the Plaintiffs contacted various persons to attempt to remedy the situation, however their attempts were unsuccessful, and the damage persisted. In June 2021, the Plaintiffs brought in an architect to examine the Apartment who determined that:

It is predominantly for the above reasons that the Plaintiffs claim that the Apartment which they purchased was burdened with latent defects which they were not and could not have been aware of earlier, or, prior to purchasing the said Apartment.

Additionally, they claimed that because of such defects the Apartment was not fit for use and had the Plaintiffs been aware of such defects they would have either refrained from purchasing the apartment, or requested that the property be sold for a lesser amount.

Plaintiffs Requests

The Plaintiffs asked the Court to conclude that they were indeed hindered from enjoying their property as they initially intended to do so. The Court was also requested to declare that the Plaintiffs should be reimbursed for damages caused to the property because of the latent defects described above and that by virtue of the actio aestimatoria, part of the original purchase price paid by the Plaintiffs to the Defendant should be liquidated.

On the contrary, the Defendants claimed that: (1) the damages which emerged were caused due to water leaks which occurred within other apartments and (2) that based on article 1431 of the Civil Code (Chapter 16 of the Laws of Malta) (the "Civil Code"), the Plaintiffs' right to institute the actio aestimatoria was time-barred and therefore the Court should not uphold such claim.

Article 1431 (1) of the Civil Code states that:

1. The actio redhibitoria and the actio aestimatoria shall, in regard to immovables, be barred by the lapse of one year as from the day of the contract, and, in regard to movables, by the lapse of six months as from the day of the delivery of the thing sold.

Court's Considerations

The Court first examined the one (1) year period within which the actio aestimatoria must be brought. In doing so, the Court also referred to part (2) of article 1431 of the Civil Code, which states that:

(2) Where, however, it was not possible for the buyer to discover the latent defect of the thing, the said periods of limitation shall run only from the day on which it was possible for him to discover such defect.

Considering the above, the Court had to assess (i) if the Plaintiffs could have themselves discovered the defects and, if so, (ii) when such defects could be deemed to have been discoverable. The Court proceeded to examine the timeline of events as both the Plaintiff and the Defendant described them.

Timeline of Events

Whilst the Defendants are claiming that the Plaintiffs were aware of such defects from the 10 October 2019, the Plaintiffs are maintaining that between October 2019 and June 2021 they were attempting to establish the source of the problem and seeking to remedy it themselves.

It is only in June 2021, following the opinion of the architect, that the Plaintiffs became aware that such damage could not be remedied and was hence the result of a latent defect.

The Plaintiffs are therefore claiming that the one (1) year period did not begin to run from October 2019, but rather, from June 2021.

Court's Conclusion

The Court, in reaching its conclusion, referred to the judgement Joseph Vella noe vs. Anthony Migneco et noe, decided on the 9 June 2005 before the First Hall Civil Code, , whereby the court had stated that there is no logic in stating that as soon as an irregularity is discovered, one is to immediately deem it as being a latent defect. Similarly, the same rationale was also adopted in the case Briffa vs. Bianchi.

In Dimech vs. Xuereb decided on the 15 December 1997, before the court of appeal, the court went a step further and noted that whilst it is agreed that one is not expected to immediately consider damage which materialises to be a result of a latent defect, as soon as there exists reasonable suspicion that such damage may indeed be a result of a latent defect, then it is from that moment in time that the one (1) year period begins to run.

In conclusion, considering the timeline of events, whilst the Court agreed that the Plaintiffs were not expected to institute the actio aestimatoria immediately (in 2019), the Court ruled that the Plaintiffs should not have waited for a year and nine months to pass before they instituted the said case, especially given that between October 2019 and June 2021 there were several instances in which the Plaintiffs should have realised that the damage was beyond repair.

The Court ruled that the actio aestimatoria could not have been instituted given that more than a year had passed from when the existence of a latent defect became apparent.

This article was first published in the Malta Independent.

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