Legal Articles

Lease agreements, force majeure and fortuitous events

Not all lease agreements contain a force majeure provision. With respect to leases, force majeure is only referred to in “Sub-title I. Of the Letting of Things” of the Civil Code, article 1557, which refers to force majeure in one specific situation, namely  the repair of damages:   “The lessee shall in no case be responsible for the repair of damages caused by force majeure and without any fault of his own.”  In this case, the legislator’s aim is that the tenant has to ensure taking care of the tenement as a bonus pater familias and ergo effects the ordinary maintenance of the tenement, except for repairs which are due to force majeure.  

Therefore, in the absence of a definition of force majeure for the specificities of a lease agreement, one has to look at the general provisions of the Civil Code, Chapter 16 of the Laws of Malta, concerning torts and quasi-torts, namely article 1029:

“Any damage which is produced by a fortuitous event, or inconsequence of an irresistible force, shall, in the absence of an express provision of the law to the contrary, be borne by the party on whose person or property such damage occurs.”

Given the generality of this provision, Maltese jurisprudence has established a number of principles and indicators on what constitutes force majeure:

  • John Abela Limited vs l-Avukat Dottor Leslie Cuschieri LL.D et noe  – in this case the Court held that the plea of casus or force majeure subsists if the fact “jitnissel minn forza magguri ma jista’ jiqfilha hadd.”   The court referred to other decisions, which decisions held that this plea does not subsist when  “…dak li jigri mill-fatt posittiv jew negattiv tal-bniedem u li fuq kollox, ikun imbassar minn qabel minn persuna ta’ dehen ordinarju jew, ghall-anqas, jista’ jigi evitat.”

 

  • In the case Michael Mizzi et vs Tabib Joseph M. Paris et  dated 27 March 2009,  the Court of Appeal defined force majeure as:

 

 

Skond il-Ligi, l-Artikolu 1029 tal-Kap. 16, kull hsara li tigri b`accident jew b`forza magguri, ibatiha, fin-nuqqas ta` disposizzjoni espressa tal-ligi li tghid il-kuntrarju, dak illi fuq il-persuna jew il-beni tieghu tigri l-hsara. F`kazijiet bhal dawn min jallega li dak li gara kien dovut minhabba forza magguri, jew casus ghandu l-obbligu li jippruvah u dana sal-grad ta` probabilita`.  Skond il-gurisprudenza tal-Qrati taghna l-“forza magguri” hija dik il-forza li ghaliha huwa impossibbli li wiehed jirrezisti, mentri l-“kaz fortuwitu” huwa dak meta avveniment ma setax ikun prevedut minn persuna ta` ordinarja diligenza. Il-kuncett tal-kaz fortuwitu jew forza magguri ma jsehhx meta ghall-hsara jkun ikkontribwixxa lfatt, posittiv jew negattiv, tal-bniedem. Ghalhekk skond ilprincipju tad-dritt, biex ikun hemm il-kaz fortuwitu mhux bizzejjed li jkun hemm avveniment insolitu, sproporzjonat, u li jkun prodott mill-forzi tan-natura, imma jehtieg li jkun inevitabili, b`mod li ma jistax jigi evitat bid-diligenza ordinarja tal-bonus pater familias. Din il-prevedibilita` trid tkun ta` probabilitajiet ragionevoli u mhux ta` possibilitajiet remotissimi u inverosimili. (Ara Vol. XXIV p.l.p. 172; Vol. p.l.p. 74; Vol. XLVIII p.l.p. 258)”.

 

  • In Joe Caruana vs Philip Chircop & Sons Ltd et decided on 24 April 2015 (Rik 587/03), the Court of Appeal held that “….il-kuncett tal-kaz fortuwitu jew forza magguri ma jsehhx meta ghall-hsara jkun ikkontribwixxa l-fatt, pozittiv jew negattiv, tal-bniedem. Skont il-principju tad-dritt, biex ikun hemm il-kaz fortuwitu mhux bizzejjed li jkun avveniment insolitu, sproporzjonat, u li jkun prodott mill-forzi tan-natura, imma jehtieg li jkun inevitabili, b’mod li ma jistax jigi evitat bid-diligenza ordinarja tal-“bonus pater familias”

 

  • In the case Anthony Pirotta vs Direttur tad-Dipartiment tal-Muzewijiet decided on 3 October 2008, the Court of Appeal (Superior Jurisdiction) pronounced that in terms of Maltese jurisprudence:

 

“ ‘il-forza magguri’ hija dik il-forza li ghaliha huwa impossibbli li wiehed jirrezisti, mentri ‘kaz fortuwitu’ huwa dak l-avveniment li ma setax ikun prevedut minn persuna ta’ ordinarja diligenza” (Delia v. Segretarju Permanent et, Appell (Inferjuri)19/05/2004 u Borg Falzon v. Darmanin, Appell Kumm. 7/06/1940), kif ukoll “il caso fortuito o la forza maggiore e’ l’evento non dipendente da azione o omissione volontaria o colposa, non prevedibile o almeno non evitabile” (Azzopardi v. Arcicovich et, Appell Civili,  14/11/1919, Vol. XXIV, PI, p.172). Biex ikun hemm il-kaz fortuwitu jrid ikun hemm event imprevedibbli u inevitabbli. It-test ghall-applikazzjoni tal-prevedibilita` o meno ta’ l-event huwa dak tad-diligenza tal-‘bonus pater familias’ fejn in-nuqqas taghha jirrizulta f’colpa (Kurunell Hugh v.Negte Busuttil, Appell Kummercjali, 16/11/1942). Jekk jirrizulta mill-fatti li kien hemm konkorrenza ta’ agir pozittiv jew negattiv tal-persuna allura l-event ma jibqax jinghad li kien kaz fortuwitu (App. Inf. Falzon vs Formosa 4/12/1991).”

 

  • In Michael u Maryanne konjugi Mizzi v. Tabib Joseph M. Paris u martu Mary Paris; Direttur tat-Toroq; u Direttur tax-Xoghlijiet u b’digriet tat-2 ta’ Settembru 2005, il-kawza tkompliet kontra l-Awtorita` dwar it-Trasport ta’ Malta minflok id-Direttur tat-Toroq (Appell Civili Numru. 1324/1999/1), the Court of Appeal reiterated that:

“Skond  il-Ligi,  l-Artikolu 1029  tal-Kap. 16, kull hsara li tigri b’accident jew b’forza magguri, ibatiha, fin-nuqqas ta’ disposizzjoni espressa tal-ligi li tghid il-kuntrarju, dak illi fuq il-persuna jew il-beni tieghu tigri l-hsara. F’kazijiet  bhal dawn min  jallega  li dak  li gara kien dovut minhabba  forza magguri,  jew casus ghandu l-obbligu  li  jippruvah u dana sal-grad ta’ probabilita`.

 Skond  il-gurisprudenza  tal-Qrati  taghna  l-“forza magguri” hija  dik  il-forza  li  ghaliha  huwa mpossibbli  li  wiehed jirrezisti,  mentri  l-“kaz  fortuwitu”  huwa  dak  meta avveniment  ma  setax  ikun  prevedut  minn  persuna  ta’ ordinarja  diligenza.  Il-kuncett  tal-kaz  fortuwitu  jew  forza magguri ma jsehhx meta ghall-hsara jkun ikkontribwixxa l-fatt, posittiv jew negattiv, tal-bniedem.  Ghalhekk skond il-principju  tad-dritt,  biex  ikun  hemm  il-kaz  fortuwitu  mhux bizzejjed li jkun hemm avveniment insolitu, sproporzjonat, u  li  jkun prodott mill-forzi  tan-natura,  imma  jehtieg  li  jkun inevitabili,  b’mod  li  ma  jistax  jigi  evitat  bid-diligenza ordinarja  tal-bonus pater familias. Din  il-prevedibilita`  trid tkun ta’ probabilitajiet ragionevoli u mhux ta’ possibilitajiet remotissimi  u  inverosimili.  (Ara Vol. XXIV p.I.p.172; Vol.p.I.p.74; Vol. XLVIII p.I. p.258)”;

 

Applicability

If one had to apply this to the COVID-19 pandemic , does the current pandemic qualify as force majeure?   Has the pandemic been foreseen and was it evitable?   One can perhaps say that the magnitude has been foreseen by the pertinent authorities, but was this evitable?   Is the pandemic irresistible?  Can anyone stop the virus if no medicine is yet available to counteract the virus?  Does the fact that many states have declared a lock-down on their populations – on grounds of public policy – render the pandemic a force majeure?

Therefore, while the individual lease agreements, in all probability, do not define force majeure, and as a result do not stipulate what exactly happens in a case of force majeure, the tenant cannot easily decide not to pay the rent or to request a discount on his rent on the grounds of force majeure.  The two are separate issues.  Rather, force majeure, and if it is established that the pandemic constitutes a force majeure, may be a ground for an opt-out from a lease agreement.  But first one has to establish that here we are speaking of an irresistible force which is tantamount to force majeure.  And in this case, some lease agreements provide for the early termination of the lease agreement. But again, one has to look at  specific lease agreements.

Therefore, as per Maltese jurisprudence, it has been established that for one to defend successfully a court case on the grounds of force majeure, the following elements have to be established:

  • That the event does not depend on a positive or negative fact of man, or better, that it is not dependent on an action or voluntary omission or on culpa;
  • That the event could not have been foreseen by a person of ordinary diligence, namely unforeseen;
  • That the event could not have been avoided through the exercise of the diligence of a bonus pater familias, therefore the element of inevitability; and
  • That the event was irresistible.

 

Termination of lease agreements

Most lease agreements provide the grounds for the early termination of the lease.  Force majeure may be one these grounds, if it is established and proved on a balance of probabilities that the pandemic qualifies as force majeure.

One can also cite other grounds of termination, besides force majeure.  In fact, it is not unusual that lease agreements contain clauses which provide for the early termination of leases in the specific cases envisaged in the respective lease agreement.   Article 1566 to Article 1575 of the Civil Code also provide for situations with respect to the dissolution of a lease, including  where either of the parties fails to perform his obligation; in which case the party aggrieved by the non-performance may elect either to compel the other party to perform the obligation if this is possible, or to demand the dissolution of the lease agreement together with damages for non-performance, provided  that  in  the  case  of  urban,  residential  and commercial tenements where the tenant fails to pay the rent due punctually, the contract may be terminated only after that the lessor would have called upon the lessee by means of a judicial letter, and the lessee notwithstanding such notification, fails to pay the said rent within fifteen days from notification.

Conclusion

Therefore, for a tenant to terminate the lease, he has to prove force majeure or otherwise pursue other grounds of termination as per respective lease agreement or in terms of the grounds of termination provided in the Civil Code.   On the other hand it does not transpire that Maltese law provides for any waiver of rent or to a discount in the rent, unless there is a voluntary agreement between the landlord and the tenant.  Likewise, the newly enacted Private Residential Leases Act does not provide for instances of force majeure in a lease agreement, or for cases where the rent can be waived or reduced in cases of force majeure.