Maltese civil law traditionally distinguishes between agreements or acts that need to be done
(a) by means of a public deed before a notary public (e.g. transfers of immovable property),
(b) by means of a ‘private writing’ (“skrittura privata”),
(c) by means of a simple document ‘in writing’ (“is-semplici kitba”) and
Recent laws have introduced some novel concepts, but the latter are beyond the scope of this article. The subject of this article relates specifically to the ‘private writing’ (skrittura privata).
Some documents under Maltese law need to be expressed, on pain of nullity, in a public deed or a ‘private writing’, whilst in other cases it is sufficient if these documents are simply expressed ‘in writing’. For example, whereas an agreement to transfer shares needs to be ‘in writing’, a ‘konvenju’ or a pledge over rights must be made either by public deed or by ‘private writing’. The law requires additional formalities when it comes to ‘private writings’, e.g. where the private writing is not signed by each of the parties thereto, it must be attested in the manner prescribed by Malta’s procedural laws. These additional formalities are not applicable to contracts which need to be simply ‘in writing’.
The cause célèbre in this regard is Gerald Vella et vs. Dr. Joseph Cassar noe, (Court of Commercial Appeal – 24.IV.1967). To paraphrase the main reasoning of the Court:
“The term ‘private writing’ needs to be used and understood in a restrictive manner. The law certainly does not require that the two signatures are signed at the same time (Il-ligi certament ma tezigix il-kontestwalita` tal-firmi), but surely the law requires the unity of what is being signed (izda indubjament tezigi l-unita` tal-kontest).”
The Court then establishes that an exchange of letters can constitute a private writing when it contains all elements which are essential to a contract and when the parties are ‘ad idem’ (i.e. in agreement on the same thing). This judgement establishes the important legal principle that even an exchange of letters may satisfy the requisites of a skrittura privata. Fast forward to this day, even a contract signed in counter-parts between a creditor in London and a debtor in Malta need not be signed on the same page, but it is sufficient if the same contract is signed remotely and then signatures are exchanged, sometimes even in pdf form.
Recent court judgements have referred to Vella vs. Cassar and have indicated that a private writing must be made on the ‘same document’ (fuq l-istess document). One such judgement was S.G. South Limited vs Joseph Scicluna et (First Hall, Civil Court – 2.IV.2004), where the Court quoted Vella vs. Cassar as saying that both signatures need to be signed on the ‘same document’. Recently this same exact wording was used by the Court of Appeal in Id-Direttur tal-Artijiet vs. Mediterranean Film Studios Limited et (17.III.2015), which attributed to Vella vs. Cassar the requirement that signatures must be “fuq l-istess document”.
The phrase “l-istess document” is ambiguous. It could mean: (a) that although parties can sign a ‘private writing’ in counter-parts or by exchange of letters, it is necessary that they sign a document which is identical in content; or alternatively (b) that they need to sign on the same physical document. It is submitted that the former interpretation is the correct one.
Vella vs. Cassar never required that a private writing contain signatures on the same physical document, but simply established that the parties needed to be in agreement as to what they were signing. Signing documents in counterparts is the norm in today’s financial world and departing from this would be a step in the wrong direction.
This article was first published in The Business Observer, Issue 33. August 27, 2015.