In the case 'Michael Zammit v. Kontrollur tad-Dwana et' decided on the 8th February 2019, the First Hall of the Civil Court (Constitutional Jurisdiction) found that Articles 68 and 72(4) of Chapter 37 of the Laws of Malta (Customs Ordinance), together with Article 16A of Chapter 382 of the Laws of Malta (Excise Duty Act), are in breach of Article 1 of Protocol 1 of the European Convention of Human Rights and Article 37 of the Constitution of Malta (the right to property). It also found that Articles 72 and 73 of Chapter 37 of the Laws of Malta (Customs Ordinance), together withArticle 16A of Chapter 382 of the Laws of Malta (Excise Duty Act), are in breach of Article 6 of the European Convention and Article 39 of the Constitution of Malta (the right to a fair trial) and in breach of Article 13 of the European Convention (the right to an effective remedy).

In December 2008, the vessel of the plaintiff in the above-mentioned case was seized by Customs officers on the allegation that he used the vessel to bring packets of cigarettes into Malta without having paid duty.

The plaintiff filed separate proceedings before the First Hall of the Civil Court in terms of Article 73 of the Customs Ordinance in order to have the vessel released. The First Hall turned down his request. The plaintiff then appealed before the Court of Appeal. (The Court of Appeal turned down the appeal and confirmed the judgment of first instance).

After he filed the case in terms of Article 73, the plaintiff obtained a bank guarantee of €45,000 which was received by the Commissioner for Revenue in exchange for the release of the vessel in terms of Article 72(4) of the Customs Ordinance.

Four years after the plaintiff had his vessel seized by Customs officer, he was charged in front of the Court of Magistrates on the grounds of a violation of the provisions of the Customs Ordinance and Excise Duty Act.

According to Article 68 of the Customs Ordinance and Article 16A of the Excise Duty Act the plaintiff, due to the small amount of unpaid duty, could have opted to pay a penalty and the criminal charges would have been dropped. However, if the plaintiff exercised this option, he would have had to renounce to the bank guarantee of €45,000.

The plaintiff filed the above-mentioned constitutional case wherein he alleged that the provisions of Article 16A of the Excise Duty Act were in breach of Article 1 Protocol 1 of the Convention and Article 37 of the Constitution since the renunciation of the bank guarantee would place a disproportionate burden on him.

The Court agreed with the plaintiff in that it found that although the law pursued a legitimate aim, it was disproportionate. The bank guarantee was twenty times the value of the duty and excise tax allegedly due and ten times the penalties that could have been imposed on the plaintiff.

The Court also found that there was a breach of Article 6 of the Convention (the right to a fair trial). The automatic renunciation to the bank guarantee (if he opted for the imposition of a penalty as described above) would mean that a civil case filed by the plaintiff in order to retrieve the bank guarantee would be rendered ineffective because he would be made to give up, in the criminal case, what he is requesting in the civil suit. There would therefore be no equality of arms in the civil suit and the plaintiff would not be able to defend his case.

The Court also found that in this respect the law does not give an effective remedy to the plaintiff and therefore found a breach of Article 13 of the Convention.

Apart from declaring the above-mentioned articles of the law unconstitutional, the Court ordered that should the plaintiff opt for the payment of the penalty, this would not lead to the renunciation to the bank guarantee and the said guarantee would have to be released. 

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