Deprivation of the use of one's money : a comparative and jurisprudential perspective on article 1047 of the civil code

Abstract

The thesis discusses article 1047 of the Maltese Civil Code which deals with the damage resulting from the deprivation of the use of one's money. The first part of article 1047 deals with the injured party's remedy of obtaining (by way of compensation) interest at the rate of 8% per annum. The concept of interest as a form of compensation is widely recognized internationally. However, the procedure for such compensation varies depending on whether the damage was caused by a failure to perform a contractual obligation or by a tortuous act. From this perspective, and following a historical analysis of Article 1047 itself, the thesis evaluates this distinction in the Maltese context and reaches certain important conclusions in this regard. The second part of article 1047 provides that the courts may also award any compensation for any other damage the claimant sustained, including every loss of earnings if the damage was caused maliciously either with the intention to cause such harm, or if the deprivation was an immediate and direct consequence of such act. When the intent is malicious, normally the rule is that compensation is only limited to direct and immediate consequences. However, under this article the law goes further by giving a two-fold remedy, the application of, which is critically discussed in the thesis. With close reference to relevant case-law, the thesis concludes that under Maltese tort law, article 1047 would appear to be an exceptional remedy that awards also lucrum cessans, even though the victim does not suffer from any permanent incapacity. The prevailing tendency has been to interpret this section in a cautious way and this has had some regrettable effects. The author proceeds to suggest some legislative amendments regarding the distinction in the award of damages arising from dolus or culpa The main aim of the thesis is to de-mystify article 1047 by illustrating issues such as the concept of 'interest' and the meaning of 'deprivation' which at first glance would seem rather vague whilst providing a fresh look at this section which seeks to restore its original meaning and raison d'etre.