In court, Delia denies he charged fees his client did not approve

PN leadership contender Adrian Delia is facing a legal ordeal that will keep his professional affairs in the spotlight

matthew_vella
Matthew Vella
10 September 2017, 7:30am
PN leadership contender, Adrian Delia
PN leadership contender, Adrian Delia
With just a week left to the Nationalist leadership election, a civil case unfolding in the Maltese law courts has embroiled candidate Adrian Delia into a dispute over an extravagant €86,210 fee he charged for securing an HSBC loan for his client.

For Delia is facing a legal ordeal that will keep his professional affairs in the spotlight: a situation that would see him juggling his defence as a party to a civil case, while taking on the challenges the political newcomer faces as Opposition leader if elected.

The case has been ongoing since 2011, after the Boris Arcidiacono furniture firm called into question the fees charged to the company on an €800,000 loan it took out from HSBC to settle its dues to creditors and finance a showroom in Msida.

At the heart of the matter is the firm’s contention that an €86,210 bank draft issued by HSBC to Delia for his services to Arcidiacono, was never authorised by the firm itself.

HSBC employees who witnessed the loan transaction disagree, having told the court there were no objections at the time.

But Arcidiacono insists it had actually refused to pay the success fee when asked by Delia a few days before signing the loan transaction in June 2009. The company already had a retainer with Aequitas Legal. In its court application, the firm says it did not authorise the payment and that no written evidence exists that a success fee was agreed on.

It also told the court that the cheque issued to Delia by the bank was not counter-signed by him, unlike the five cheques issued on the same day by the bank to settle the firm’s dues to its creditors. The cheque was also redeemed that very same day.

But now the court has made Delia a party to the case, which means he will have to answer for the substantial success fee charged to secure the loan, mainly used to pay creditors with whom Arcidiacono was in legal dispute. HSBC has also told the court that in the eventuality that it finds in favour of Arcidiacono, the bank reserved the right to recoup the payment from Delia.

Adrian Delia was then appointed by Arcidiacono to secure the commercial loan, and settle the conditions for the firm to pay off its other creditors.

Although the loan was taken out on 1 June, 2009, it was only in 2010 that Arcidiacono complained with the bank why it had – on that same day – issued the €86,210 fee to Adrian Delia.

According to the testimony of HSBC’s then commercial relationship manager, Robert Delezio, Arcidiacono had “seemed to even contest that [it] was aware of the amounts withdrawn [from the loan account]” – namely the fees paid upon issuing the loan.

HSBC insisted in its official reply to the court that Arcidiacono was aware of the schedule of payments to creditors as well as legal and professional fees, from the €800,000 loan, and that the firm had only requested that a €20,000 sum be left in the account so as to finance structural works to an Msida showroom.

Indeed all bank employees testifying in court said that on the day the loan was issued, both Arcidiacono and Delia were present at the signing of the cheques as the loan contract was read out. Arcidiacono disputes that the sixth cheque, issued to Delia, was made out in his presence.

“Adrian Delia had indicated the amounts of the five cheques issued on that day, which I communicated to Delezio,” HSBC senior manager Ethelbert Fenech Adami told the court on the matter.

Fenech Adami was responsible for issuing the cheques on behalf of the bank, one of which was a bank draft payable to Delia. “At no time was there any objection to any of the cheques being issued.”

This was confirmed by witness Eric Mamo, who described Delia as leading the negotiations on the loan by speaking to the bank’s lawyer and requesting cheques to be made payable to third parties.

“The bank had been informed by Delia, that there was an agreement that should he manage to save the Msida showroom the company had, Delia would be paid the sum of Lm50,000 (€116,500).”

After the loan transaction was settled, Arcidiacono received two receipts from Aequitas Legal and Aequitas Management for the combined sum of €86,210. Both HSBC and Delia insist this was a sign that the firm had accepted to pay the fees, since the company’s accountant asked that the receipt be only issued by Aequitas Legal.

HSBC also insisted in court it was not its duty to verify whether the legal fees requested by Delia were indeed backed up by a contract or agreement.

In a letter to HSBC, dated April 2011, Adrian Delia told the bank that it was “completely incorrect that Mr Boris Arcidiacono was not aware of the payment which had to be effected to me. This payment was agreed beforehand as part of a larger amount, still to date unpaid, as was the fact that it had to be paid on deed.”

Delia said the sum was due to the change in nature of the brief from a purely litigation to a negotiation one. “I confirm that Mr Arcidiacono was fully aware of the issue of said cheque.”

Jersey offshore claims

With a successful career in litigation, Delia’s professional affairs have already stolen the headlines.

At one point, he was the director of an offshore company, whose ultimate owner would have it used to conceal ownership of properties in London’s Soho district that were later raided by the Met Police in a bust on a Russian prostitution racket.

Adrian Delia is contesting the PN leadership with Chris Said
Adrian Delia is contesting the PN leadership with Chris Said
At the centre of the opaque set-up was a Barclays International account on the tax haven of Jersey, which Delia managed as a client account.

After the Operation Pabail raid on the Soho prostitution houses, Delia’s name surfaced in a legal dispute between Emanuel, aka Lolly Bajada and the company Delia represented, Healey Properties – believed to be ultimately owned by Emanuel’s brother Eucharist Bajada.

According to a legal letter, Delia’s Jersey account should have forwarded some £20,000 in monthly rent deposited there for properties owned by Healey, to be later forwarded to the property owners.

Delia later resigned as director of Healey Properties following the London raid in June 2003. A company memo seen by MaltaToday also has the name of Labour deputy party leader Chris Cardona listed as director, but the name is unsigned.

Neither Delia nor Cardona have denied the allegations.

But Delia has brushed off any allegations of impropriety, seeing as he was a lawyer servicing his client as was his duty at the time.

A PN ethics inquiry however said Delia was not forthcoming in furnishing any more information on the use of the Jersey offshore account. The PN’s administrative council, basing itself on the inquiry’s recommendations, asked Delia to reconsider his candidature.

The candidate soldiered on, taking over 616 votes from the General Council’s 1,354 voters, earning himself a place in the run-off with Nationalist MP Chris Said that is to take place on 16 September.

 

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Matthew Vella is executive editor at MaltaToday.