Fiduciary obligations and the concept of 'Prestanome' in Maltese law

Abstract

Fiduciary obligations were introduced in the Civil Code, Chapter 16 of the Laws of Malta by Act XIII of 2004, introducing the relevant articles in 1124A and 1124B. The Act in question also introduced amendments within the institute of mandate, to formally codify the prestanome mandate which had been developed through judge made law, based on the offerings of renowned continental jurists. The Act also introduced new trust laws, which also sheds light on the close proximity of the fiduciary concepts which bind the subject matter of the relevant act. This research initiated with a thorough assessment of the parliamentary debates which took place prior to the introduction of the relevant sections of the Civil Code and the amendments to our trust law, which proved particularly valuable in identifying the sources of our law in Common Law, as well as in Roman Law. This allowed a thorough research on the fiduciary obligations, what the fiduciary relationship entails, and the relevant implications for the parties to fiduciary duty through case law, both in Maltese Courts, and beyond. Article 1124A is relevant to any discussion on the prestanome mandate - lending one's name to another, a person acquiring, or holding property on another person's behalf. The Courts have often dealt with situations in which apparent owners are found to be no more than mere mandataries for a hidden mandator, the real owner of property. Before the introduction of article 1124A in the Civil Code the Courts acknowledged the civil law concept of prestanome mandate which produced a similar relationship between two parties through the holding of property for the benefit of another, with the matter now being established in our Civil Code - prestanome mandataries, similar to trustees, are also bound by fiduciary obligations.