Court of Appeal Judgement
GTG Advocates has successfully assisted and represented a client ("the plaintiff") in the case of 'Steven Norman vs STM Malta Pension Services Limited'1
The Court of Appeal delivered its final judgement in the names of 'Steven Norman vs STM Malta Pension Services Limited' on the 2nd day of October 2024 and declared that the defendant did not exercise prudence, diligence and the attention of the bonus paterfamilias as one should in its role of Trustee of the policy scheme.
The plaintiff had initially filed a complaint with the AFS on the 22nd of December 2021, claiming that the defendant as the service provider was to be held responsible for the damages incurred by him in the course of the administration of his scheme and the underlying policy. The plaintiff had also complained to the AFS that the defendant had not provided him with an accurate application document to the policy scheme in relation to the charging structure of this same policy.
The plaintiff further complained that as Trustees of his pension fund, the defendant had failed to act in his best interest. Furthermore, the defendant had additionally affected several changes to its policy following the plaintiff's signature however, the defendant failed to inform the plaintiff of such changes.
The AFS during the course of the proceedings highlighted that The Trusts and Trustees Act ("TTA")2 is particularly relevant for the defendant considering its role as Trustee of the Scheme. The AFS delivered a long and detailed judgement3 and considered that the defendant had indeed failed to ensure that the charging structure of the plaintiff's life policy was clearly and adequately disclosed to the plaintiff. The AFS also rightfully noted that The Service Provider's ie. the defendant did not provide comfort to the Arbiter that the information contained in the signed Application Forms was correct and accurate at the time when these were signed.
The Arbiter's concluding remarks highlighted that the defendant as the service provider and trustee had the duty and obligation in such roles to properly inform the plaintiff of any material change in the terms and conditions of the product acquired and seek the relevant consent and direction from the plaintiff in the circumstances.
The plaintiff relied on STM Malta as the Trustee of the Scheme to act with the diligence and attention of a bonus paterfamilias, to account to him and provide him with information and highlight material aspects in relation to his Scheme, protect his interests and safeguard his property from loss or damage. The defendant had also to act with due skill, care and diligence and ensure disclosure of relevant material information in a clear and not misleading way. The defendant was also ultimately the Policyholder of the policy and was thus itself in full control of this policy.
The AFS therefore decided the case in the plaintiff's favour and ordered the defendant to pay the plaintiff the amount of 70% (seventy percent) of the amount of the Marketing Fee (undisclosed fee) being the subject of this Complaint that may be charged and paid on his underlying policy, with expenses to be borne by the defendant.
The Appeal
The defendant company subsequently entered an appeal from the AFS judgement and requested the court of appeal to revoke, cancel or vary the AFS decision on the basis that the Arbiter had applied and interpreted the relevant legislation incorrectly.
Following the parties' oral submissions, the court of appeal discarded the defendant's arguments and confirmed the Arbiter's decision stating that the circumstances are very clear and show how the appellant company in its role as service provider did not act with prudence, diligence and the attention of the bonus paterfamilias as one should in its role of Trustee of the Scheme.
The court of appeal confirmed the AFS decision with court expenses to be borne by the appellant company.
GTG Advocates' team for this case was composed of Dr Robert Tufigno and Dr Delilah Vella who acted as legal counsel for the Respondent.
Footnotes
1. Steven Norman vs STM Malta Pension Services Limited' Court of Appeal (Inferior) 67/2023LM.
2. Chapter 331 of the Laws of Malta.
3. Steven Norman vs STM Malta Pension Services Limited, Arbiter for Financial services, 17/05/2023 – Case ASF 163/2021.