Mandat ta' Sekwestru Kawtelatorju - Precautionary Warrant for Unpaid Debts

One of the remedies under Maltese law for a creditor to ensure payment is the Precautionary garnishee order known in Maltese as Mandat ta’ Sekwestru Kawtelatorju which involves the garnishee or garnishees as the case may be (usually a bank) depositing the funds of the debtor in court up to the amount claimed by the creditor in the garnishee application.

Once the said funds are deposited in court, these may not be withdrawn by the creditor and must remain deposited in court until a court decides the creditor’s claim accordingly.

A Precautionary Garnishee order unlike the Executive Garnishee Order may be brought without the necessity of a previous judgement. The demand for the issuance of a precautionary garnishee order is to be made by means of an application in court in the prescribed form. Such demand must be confirmed on oath by the applicant upon filing with this being under pain of nullity. Where in an application there is more than one applicant demanding the issue of a precautionary garnishee order against the same respondent, the oath shall be taken by at least one of the applicants.

The oath may be administered either by the registrar or by a legal procurator appointed as commissioner for oaths under the commissioner for oaths ordinance.[1]

The application for the issuance of a precautionary garnishee order must also contain the origin and nature of the debt or claim sought to be secured and when the right sought to be secured by the act is a debt or a demand which may be satisfied by the payment of a sum of money, the amount of such demand. If the case has already been filed in court, such demand may also specify and include all judicial costs incurred in the course thereof.  

In the case of ‘Carmelo Abdilla vs Auto Sales Limited’[2] the court stated that “... Mandat Kawtelatorju jinħareġ sabiex il-kreditur iqiegħed fiż-żgur il-jeddijiet tiegħu... M’għandux jinħareġ sabiex iġib l-allegat debitur għarkubbtejh”

For a precautionary warrant to be issued, having a favourable judgement is not a requirement since this is intended to prevent the dissipation or disappearance of the assets of the debtor pendente lite.[3] Such precautionary acts will be rescinded if the party against whom the act is issued deposits the sum claimed in court or gives such security as in the court’s opinion, according to the circumstances of the case, may be sufficient to safeguard the rights or claims stated in the act.

According to Chapter 12 of the Laws of Malta, a creditor must file the case on the merits within 20 days from when the precautionary act is issued. A Precautionary act may also be issued simultaneously with the filing of the case on the merits or at any point after the filing of the case on the merits and during the court of proceedings.

The aforementioned process sounds like a safe haven to anyone attempting at recovering a debt, which begs the question – If it is so easy to obtain a precautionary garnishee order, can this system be abused in a frivolous and vexatious manner?

The legislator has put into place legal safeguards to prevent anyone from applying for and obtaining a precautionary garnishee order against someone else, for the heck of it.

In fact, the court may condemn the applicant at whose request a precautionary act was issued to pay a penalty of not less than Eur 1,164.69 and not more than Eur 6,988.12 in favour of the person against whom the precautionary act was issued in each of the following cases[4]:

1. If the applicant without any valid reason, does not bring the action in respect of the claim, within the time established by law;
2. If on the demand of the defendant for the recission of the precautionary act, the plaintiff fails to show that the precautionary act had been issued or that within the fifteen days previous to the application for the precautionary act, he had in any manner called upon the defendant to pay the debt, or, if the debt be not a liquidated debt, to provide sufficient security;
3. If the circumstances of the debtor were such as not to give rise to any reasonable doubt as to his solvency and as to his financial ability to meet the claims of the applicant, and such state of the debtor were notorious; and
4. If the applicant’s claim is malicious, frivolous or vexatious.

In the case of ‘Paul Caruana vs Global Executive Search Limited Et.’[5] the court stated that; “Illi dwar din id-diskrezzjoni ngħad li l-Qorti hija tenuta li timponi l-penali fejn ikunu jirriżultaw l-estremi li l-liġi teżiġi. Il-penali maħsuba fl-artikolu 836(8) tal-Kap 12 hija waħda ta’ ordni pubbliku immirata li tiżgura serjeta` fil-proċess ġudizzjarju u biex ma tħallix li l-istitut tal-mandati kawtelatorji jintuża b’abbuż.”

For more information or assistance, please contact Dr Robert Tufigno and Dr Delilah Vella.

You may also wish to read more on the Following Warrants:

Warrant in Factum

Warrant of Prohibitory Injunction

Warrant of Seizure

[1] Chapter 79, Laws of Malta.

[2] Prim Awla tal-Qorti Ċivili, 17/05/2011.

[3] During Litigation.

[4] Article 836(8) Chap 12, Laws of Malta.

[5] Prim Awla tal-Qorti Ċivili 31/01/2017.