CASE OF MERCIECA AND OTHERS v. MALTA
Violation of Art. 6-1;Pecuniary damage - claim dismissed
David Scicluna;Lech Garlicki;Ledi Bianku;Nicolas Bratza;Päivi Hirvelä;Zdravka Kalaydjieva
6. The applicants were born in 1952, 1954, 1961, 1960, 1964, 1963 and 1945 respectively and live in Malta. They are certified public accountants acting personally and in their capacity as partners of the partnership Deloitte & Touche Certified Public Auditors & Accountants. 7. On an unspecified date the applicants were sued, personally and in their capacity as partners of the partnership Deloitte & Touche Certified Public Auditors & Accountants, as auditors of PCO Ltd, in a civil action by a company, V. The latter claimed that the applicants’ audit firm had acted negligently and fraudulently in its drawing up of PCO Ltd’s audit report/financial statements, and was therefore liable for the losses sustained by V as a result of its reliance on those documents. 8. During the proceedings the applicants raised a preliminary plea to the effect that reliance by V. on the audit report when taking a particular credit decision, and knowledge on the part of the applicants of such reliance when taking that decision, were lacking. These requirements were fundamental to this type of action. 9. On 1 December 2003 the Civil Court dismissed this plea in a preliminary judgment. 10. On 3 December 2003 the applicants requested special leave to appeal the preliminary judgment under Article 231 (1) of the Code of Organisation and Civil Procedure (“COCP”). On 12 December 2003, the Civil Court in its ordinary jurisdiction granted leave to appeal. 11. On 29 December 2003 the applicants lodged an appeal. 12. On 8 June 2004, having heard the parties’ arguments, the Court of Appeal dismissed the appeal as out of time. It noted that while the legislator had clearly established that the time-limit for lodging an appeal against an interlocutory decree ran from the date of authorisation to appeal, in respect of an appeal against a “judgment” the legislator had made no distinction between a “judgment” and a “partial judgment” (sentenża parżjali). It followed that the twenty-day time-limit which ran from the date of delivery of a judgment according to Article 226 (1) of the COCP applied also to appeals necessitating prior leave to appeal. 13. On 17 September 2004 the applicants instituted constitutional redress proceedings before the Civil Court in its constitutional jurisdiction, claiming that such an erroneous interpretation by the Court of Appeal deprived them of access to court. 14. On 15 November 2006 the Civil Court upheld the applicants’ claims, finding that a right to appeal could not arise before leave to appeal had been given. Moreover, an appellant did not have to tolerate the delays of a court in giving leave to appeal. The Court of Appeal’s interpretation had therefore deprived the applicants of access to court in violation of Article 6 of the Convention. It declared the Court of Appeal’s judgment null and void. 15. On 2 March 2007 the Constitutional Court, on appeal by the Attorney General, acknowledged that the interpretation given to the law had been erroneous, thereby depriving the applicants of their right to appeal at an early stage. Nevertheless, it did not uphold the first-instance judgment, since a wrong interpretation did not suffice to lead to a violation of the Convention. While reiterating that an appeal could be heard before the Court of Appeal only once, it considered that the applicants had the opportunity to appeal in the civil case after the final judgment. Thus, given that a defect in first-instance proceedings could be remedied on appeal, the right to a fair hearing would similarly not be violated if a remedy which had been inappropriately denied became available at a later stage of the proceedings. 16. Article 231 (1) of the Code of Organisation and Civil Procedure (“COCP”) (Chapter 12 of the Laws of Malta), at the relevant time, read as follows: “Where several issues in an action have been determined by separate judgments, appeal from any such judgments may only be entered after the final judgment and within the prescribed time, to be reckoned from the date of such final judgment; and in such an appeal express mention of the judgment or judgments appealed from shall be made: Provided that an appeal from such separate judgments may be entered before the final judgment only by leave of court to be read out in open court; such request for leave to appeal shall be made either orally immediately after the delivery of such judgment or by application within six days from such judgment.” 17. The Article was amended in 2005, whereby the following phrase was added to the proviso: “and when such leave to appeal from such separate judgments is granted the time for the filing of the appeal in respect thereof shall commence to run from the day on which the said leave is read out in open court.” 18. Article 226 (1) of the COCP reads as follows: “An appeal is entered by means of an application to be filed with the registry of the Court of Appeal within twenty days from the date of the judgment.”