Garnishee order against GWU to stay, court rules
The First Hall of the Civil Court has dismissed an application filed by
the General Workers' Union for the revocation of a garnishee order for the
sum of Lm50,000 against it at the request of Malta Shipyards Ltd.
The court, however, fined the company Lm500 and ordered it to provide a
guarantee of Lm4,000 in favour of the GWU.
Mr Justice Giannino Caruana Demajo declared in yesterday's decree that
the GWU had filed an application against Malta Shipyards Ltd asking the
court to revoke the garnishee order and to condemn the company to pay a
penalty in terms of law.
The union had also requested the court to order the company to provide a
guarantee in accordance with the law and, in default of such guarantee, to
revoke the warrant.
Malta Shipyards had previously asked the First Hall of the Civil Court to
issue a garnishee order for Lm50,000 against the union on the basis that the
GWU had caused the company to sustain damages as a result of industrial
action taken at the shipyard.
According to the company, the union was in breach of the collective
agreement in force between the parties and that the company was therefore
entitled to file an action for damages against the union for breach of
contract.
The writ of summons filed by the company against the GWU for damages is
currently pending before the First Hall of the Civil Court.
In its decree the court noted that in order to verify whether the warrant
ought to be revoked in terms of law, the court would have to enter into the
merits of the litigation.
Thus, the court would have to establish whether a collective agreement
was a legal contract between the parties and, if in the affirmative, whether
the union had acted in breach of the agreement.
The court would also have to decide whether the union's actions were
covered by immunity in terms of the law governing industrial relations.
Mr Justice Caruana Demajo declared that such matters required a more
profound study that could be given to the case in this application, which
was of a prima facie nature.
Furthermore, any decision on such matters (on a basis which exceeded that
of prima facie) could prejudice the merits of the litigation between the
parties currently pending before the courts.
The court therefore ruled that the warrant was not to be revoked at this
stage and that, when one considered the business conducted by Malta
Shipyards, the amount of damages claimed was not, prima facie, excessive.
Mr Justice Caruana Demajo added that the company had not, within the 15
days preceding the issue of the warrant, called upon the union to provide
security for the damages claimed.
The court further noted that the GWU was an organisation that had many
members and a regular income from union dues and that it was improbable that
the GWU would be dissolved in the near future. As a result, there was no
legal basis for the warrant to have been issued with urgency and the
company's decision to obtain the issue of the warrant was rather hurried and
untimely.
This did not mean that the warrant ought to be revoked but that there
were grounds for the court to impose a penalty on the company.
Following the GWU's claim for a guarantee on the part of the company, Mr
Justice Caruana Demajo declared that the responsibility for precautionary
warrants (such as the garnishee order in issue) had to be borne by the party
that had sought the issue of the warrant.
As a result, if it eventually resulted that Malta Shipyards had deprived
the GWU of its funds without justification, then the company would have to
make good the damages that would be sustained by the union. It was therefore
appropriate for the company to give a guarantee for payment of damages.
In conclusion, the court dismissed the union's request for the revocation
of the warrant but ordered Malta Shipyards to pay a penalty of Lm500.
The company was also ordered to provide a guarantee (either through a
bank or by effecting a bank deposit) of Lm4,000 in favour of the GWU by
April 3. In the event that the guarantee was not effected the garnishee
order would be revoked.
The court also reserved the right to re-evaluate the value of the
guarantee in a year's time.
Dr Andrew Borg Cardona was counsel to Malta Shipyards Ltd and Dr Aron
Mifsud Bonnici was counsel to the GWU. |
