A buyer's year to rescind runs from the eviction threat

The First Hall of the Civil Court held on 23 April 2026 that a buyer who wants to undo a sale because of a threatened partial eviction must act within one year of learning of the threat. Madam Justice Audrey Demicoli found that the buyer knew by March 2017 that part of its land was a planned road, but waited until 2019. She accepted the plea of prescription and rejected all the claims.

The facts

In Topcat Holdings Limited vs Eurostyle Limited, the buyer bought a penthouse office in shell form and a divided plot of about 310 square metres by public deed on 14 May 2015. The seller guaranteed peaceful possession and declared that the property was not affected by any expropriation order or similar public scheme.

The buyer used the plot as parking for its staff. On 7 September 2018 the Planning Authority served an enforcement notice, treating the land as a public road turned without a permit into private parking. The buyer then learned that a 1959 Government Gazette notice had declared part of the land needed for a public purpose.

The buyer sued the seller, its director, the Planning Authority, the Lands Authority and the State Advocate. It sought a declaration of ownership, the annulment of the enforcement notice, damages and rescission of the sale under articles 1408 to 1423 of the Civil Code (Chapter 16 of the Laws of Malta).

What the court held

A partial judgment of 23 February 2022 had already dismissed the claims against the Planning Authority. Article 97(11) of the Development Planning Act (Chapter 552) gives anyone aggrieved by an enforcement notice an appeal to the Environment and Planning Review Tribunal. Because that special remedy existed, the buyer could not turn to the general jurisdiction of the civil courts, and the court rejected the claim to annul the notice.

The court released the State Advocate. Under article 181B of the Code of Organization and Civil Procedure (Chapter 12), the government is represented by the head of the department responsible. Complaints about the notice lay against the Planning Authority, and complaints about expropriation against the Lands Authority.

It also released the Lands Authority, which had no legal relationship with the buyer, since no claim attacked the expropriation itself. The director was released too. He signed the deed only for the seller company, and an action on the warranty lies only between the parties to the contract.

That left the seller's plea of prescription. Article 1417(1) allows a buyer to ask, within one year, for a sale to be dissolved where the eviction affects only part of the thing, but a part so important that the buyer would not have bought without it. The court treated the one-year period as prescription, following the Court of Appeal (15 December 2015).

Eviction, the court held, includes a real threat of eviction, among them a threat from a competent authority because the property lacks the necessary permits. The court found that the parking plot was a deciding factor in the purchase. A bank loan letter described the plot as reserved parking, and the notary testified that the buyer needed parking.

The buyer, however, knew of the threat by 21 March 2017 at the latest. On that date it applied to the Planning Authority to change a “planned service road” on the plot into parking, an application it withdrew in June 2018. The court noted that the seller's own 2006 deed described part of the land as destined for expropriation.

A court-appointed architect also found the €40,000 price low, at about 20% of the value of legal parking of that size. In the court's view, the price should at least have raised doubts about what the buyer was acquiring.

The judicial letter was served on the seller in January 2019, more than a year after March 2017. The court concluded that “kien iddekorra l-perjodu ta’ sena minn meta s-soċjeta’ rikorrenti ġiet a konjizzjoni tat-theddida t’evizzjoni parzjali” (the one-year period had run from when the applicant company learned of the threat of partial eviction). The buyer had raised no defence to the plea and was ordered to pay the costs.

Why it matters

A buyer who finds that part of a property is earmarked for a road, or lacks a permit, cannot wait for a formal eviction. The year runs from knowledge of the threat, and the buyer's own planning application can prove that knowledge. A challenge to the enforcement notice itself belongs before the tribunal, not the civil courts.

Where it sits

The warranty of peaceful possession protects a buyer against eviction from the thing sold, and Maltese courts do not confine it to eviction ordered by a judgment. The court relied on the First Hall of the Civil Court (27 February 2008), which held that a real potential threat from a third party is enough, and on the Court of Appeal (27 January 2017).

That appeal ruling approved the First Hall of the Civil Court (25 May 2016), which followed the Court of Appeal (25 May 2001) in extending the warranty to forced eviction by an authority where the property lacks the required permits. On who may be sued on the warranty, the court cited the Court of Appeal (17 March 2021).

On the planning remedy, the partial judgment relied on the First Hall of the Civil Court (27 May 2016 and 7 July 2004). On who is the proper defendant, the court cited the Court of Appeal (5 October 2001).

Source

First Hall of the Civil Court, 1195/2019, 23 April 2026.