Old Mint Street revocation is political stunt, Gaffarena says
Court appeal attacks decision by Prime Minister to take legal action on decision mandated under his ministerial purview
He obtained a handsome €1.65 million land and cash deal through what many believe was a direct political interest by a sitting government member.
But now businessman Mark Gaffarena is appealing the revocation of the controversial Old Mint Street expropriation deal from which he profited, arguing that it was an exercise in political point-scoring.
In March, the courts revoked all transfers made in terms of two expropriation contracts and ordered the return of all assets to government, after Prime Minister Joseph Muscat filed a court case against Gaffarena and his wife Josielle to recoup the lands transferred in the expropriation of a palazzo in Old Mint Street, Valletta.
The government had paid €1.65 million in 2015 for the expropriation of his part-ownership of the palazzo that Gaffarena had bought for a fraction of the price just weeks earlier, in a deal denounced as corrupt by the Opposition and which led to the resignation of parliamentary secretary Michael Falzon.
Two investigations were carried out by the Auditor General and the Internal Audit Investigations Department, where the expropriation contracts were found to be null as they referred to two undivided quarter-shares of the entire property and not the part belonging to Gaffarena. The Lands Authority later argued in court that much more land had been transferred by way of compensation than what should have.
The courts rescinded the expropriation late last month, ruling that the Commissioner for Lands should have compensated each of the owners pro-rata and that the government had “effectively acquired part of the property belonging to all its owners and only paid one owner for it.”
The Gaffarenas filed an appeal earlier this week arguing that the decision should be overturned and that “this is all an exercise founded on a political basis.”
CONTINUED FORM PAGE 1
In the appeal submitted by lawyer Keith Bonnici, Gaffarena says the judgment was null as it was given against an authority which no longer existed by the time the judgment was issued.
In fact, the Commissioner of Lands was replaced by the Lands Authority in April 2017.
Gaffarena is claiming that the Commissioner for Lands was replaced by the Lands Authority, which, however, never requested to be a legitimate respondent to the case after the changeover.
Indeed, the court referred to the Commissioner for Lands during the proceedings till the very end, with the judgment calling on that entity to appear on the deed revoking the contracts.
Gaffarena contends that since the new entity did not step in to take the Commissioner’s legal place, the judgment cannot be executed and is therefore null.
“The appellants submit that this illegitimacy cannot be remedied today,” his lawyer said in the appeal.
Another ground for Gaffarena’s appeal was that the request for revocation was filed by Prime Minister Joseph Muscat against the Commissioner of Lands, whose department was the legal responsibility of the parliamentary secretariat for lands – the same Joseph Muscat.
Muscat had assumed political responsibility for the ministry after the resignation of Falzon.
“It is clear that Muscat is at the same time the plaintiff as well as the minister burdened with the legal responsibility for two of the defendants – the Commissioner for Lands and the Registrar of Lands. It is therefore against the concept of public order that there is a case in Court where both the applicant and the defendant are the same person who has legal responsibility for the alleged illegal actions,” Gaffarena said in his appeal.
Other grounds
Gaffarena is also arguing that the law was misquoted over the distinction between “common undivided” ownership and “common divided” ownership, namely as to whether the expropriation had to be benefit all owners when the section of the law cited reads “the owner”.
He said it was not true that the presidential declaration ordering the expropriation referred to “an undivided quarter of all the shares in the property” but to the undivided quarter of the Old Mint Street property.
“The declarations make no reference to physical persons. Here we are talking about buildings and nothing else,” the lawyers submitted.
The reasoning that the exchange of property has to take place with all the co-owners being entitled to compensation for their part of an undivided quarter expropriated by the government was “based on a legal principle that doesn’t exist” and the conclusion was “mistaken on many levels”, Keith Bonnici argued.
PwC report ‘not up to standard’
Bonnici also attacked a technical report by auditors PricewaterhouseCoopers, who were commissioned by the IAID, saying the court “completely ignored” the testimony of the architect who drew up the report, who said the Gaffarenas failed to produce a valuation of their own to discredit that submitted by PwC.
The Gaffarenas had no legal requirement to present a new valuation but they only had to show that the report by PwC was not carried out according to industry standards. Bonnici argued that once the PwC report had been discredited, and that the government had not attempted to discredit the valuations of the Old Mint Street property and those of the compensatory lands in Handaq, Zebbug, Sliema and Mqabba, Gaffarena had no reason to produce another valuation.
“Government had every opportunity to request the nomination of a new technical expert but had instead rested solely on the PwC report, arguing that the other party had gone a step further and ‘made it (architects Joseph H. Spiteri and Stefan Scotto’s valuation) its own.”
The lawyer said that the architect on PwC’s independent property valuation had testified “clearly and unequivocally that he had not presented a technical report to PwC”, suggesting that the report was not made according to the technical standards required, and therefore had no weight.
He also said the architect failed to visit the properties in question, did not sign the PwC report and that he valued a number of properties as irrigated land when they were in fact non-irrigated. “The fact that the report had been drawn up by PwC means nothing if it doesn’t satisfy the requirements established by the Chamber of Architects.”