Case law

  • Case Details
    • National ID: 240/2008/1
    • Member State: Malta
    • Common Name:Raymond Camilleri u martu Redenta Camilleri versus Touring Mediterraneo Ltd
    • Decision type: Other
    • Decision date: 06/12/2010
    • Court: Qorti ta’ l-Appell (Appellate court)
    • Subject:
    • Plaintiff:
    • Defendant:
    • Keywords:
  • Directive Articles
    Unfair Contract Terms Directive, Article 4, 1.
  • Headnote
    use of unfair terms; application of equity in relation to the legal principle of pacta sunt servanda
  • Facts
    Consumers filed a claims asking for a refund of a deposit that they had paid as a deposit for cruise holiday which holiday had to be cancelled because of a serious illnesses by one of the plaintiffs.
    Defendants argued that according to the terms and conditions of the booking any cancellation had to be made in writing to the travel agent. Since plaintiffs failed to make a request in writing to cancel their holiday they were not entitled to a refund. Plaintiffs on the other hand contended that they did request a cancellation though this was not done in writing.
    The Small ClaimsTribunal [being the court of first instance] noted that factually one of the plaintiffs did have a serious medical condition and therefore could not take the cruise. The Tribunal further noted that plaintiffs had requested a cancellation but did not do so in writing as required by the applicable terms and conditions. In fact plaintiffs had visited the travel agency and informed an employee of the said agency. Plaintiffs said that this employee had no stage told them that they had to make a formal request in writing to cancel the cruise.
    Tribunal noted that defendant company was correct in arguing that at law plaintiffs were not entitled to ask for a refund of the deposit once the request asking for a cancellation was not made in writing. However the Tribunal determined that it should not apply the law in a restrictive manner, referring in this regard to the norms under the Consumer Affairs Act relating to unfair terms and to the concept of equity. The Tribunal held that it was not fair and equitable that plaintiffs suffer simply because they failed to send in a written request to cancel. The Tribunal further noted that the employee of the travel agency was duty bound to explain to plaintiffs the steps that they had to take to properly cancel their booking. The Tribunal therefore decided that part of the sum paid by way of deposit should be refunded to plaintiffs.
  • Legal issue
    An appeal was filed by defendant company from the decision given by the Small Claims Tribunal before the Court of Appeal [Inferior Jurisdiction].
    Appellants requested the revocation of the decision of the first court once the Tribunal had determined that plaintiffs did not have a right at law to ask for a refund once the request for cancellation of the cruise was not made in writing – the Tribunal therefore had no grounds to reason that the condition requiring that cancellation must be made in writing is one which is unfair. Appellants argued that the condition was an integral part of the contract and therefore had to be applied irrespective of the reason for the request for cancellation included considerations of equity contending that the only principle that had to be applied was that pacta sunt servanda which principle cannot be render ineffec-tive by any court.
    The Court of Appeal in the first instance examined the reasoning behind the principle of pacta sunt servanda, noting that in the pre-contractual stage an important element was that the parties involved act in good faith and that the parties inform each other of all the elements which guarantee to ensure that there is a full and proper understanding of the contract being entered into. This according to the Court of Appeal extended to a proper explanation of what would happen if the contract could be adhered to. The Court further noted by way of an example that the obligation to make a cancellation in writing would be subordinate to the occurrence of an event which was not pre-determined [in this case serious illness]. The Court in this regard referred to a principle stated in previous case law whereby contractual norms are to be applied in an such an equitable manner.
    The Court further noted that in recent years the Maltese legislator in adherence to Community law has introduced norms to protect consumers especially with regard to standard contract terms in trader – consumer contracts where effectively the consumer was not involved in the actual formulation of the terms of the contract. The Court that these situation lead to a situation of imbalance against the consumer which lead to the enactment of laws regulating the use of unfair terms in trader – consumer contracts.
    The Court of Appeal noted that in this particular case the terms and conditions made in favour of defendant company were a case in point of contractual terms prepared in favour of the trader and where the consumer effectively had no contractual power.The Court in this regard referred also to other terms in the said contract between plaintiffs and defendant company including those relating to ‘non-refundable deposit’, ‘cancellation or curtailment of the Cruise’ and ‘liability of the company’. The Court considered all these conditions as being abusive and contrary to consumer law as applied in conformity with Community law.

    The Court of Appeal given these circumstances decided to confirm the decision of the Small Claims Tribunal.
  • Decision

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