€1.5 million disbarred lawyer never paid back to client: appeal refused

The Court of Appeal has dismissed an appeal by disbarred lawyer Patrick Spiteri to a 2016 judgement that condemned him to return over €1.5 million to a former British solicitor who back in 1998 entrusted Spiteri with investing his money.

The original case was filed in 2003 by Stuart Creggy against Patrick Spiteri after having refused to return the cash deposited in Spiteri’s client account.

Creggy, an ex-solicitor and former magistrate in the UK, had been arrested in June 1998 by the UK’s National Crime Squad, which was set up to investigate serious international and organised crime, as part of an international investigation into a $17m investment share fraud run from New York.

A 2014 report published in the Law Society Gazette indicates that Creggy himself was subsequently convicted of money-laundering offences in 2007, for which he received a suspended term of imprisonment of 18 months and a fine of £900,000.

UK court records show the 1998 transfer came from Swiss bank accounts with instructions for their transfer to Spiter. Creggy had told the court Spiteri was the senior partner of “one of the most respectable law firms in Malta” and had a reputation as an expert in international finance and taxation, after having been introduced to him by then Labour minister for justice, Charles Mangion.

In a judgement handed down earlier this month, the Court of Appeal, presided over by Chief Justice Mark Chetcuti, together with Giannino Caruana Demajo and Anthony Ellul, rejected Spiteri’s appeal, which they ruled as frivolous and vexatious, ordering him to suffer double costs.

Creggy had submitted his evidence in the form of an affidavit, explaining that he had been anxious to regularise his affairs after retiring from practice and so had “discussed moving some cash deposits that I had [with Spiteri] and he said that he would be happy to assist. He said the first stage of placing these monies would be for me simply to transfer the monies to his firm’s client or trust account.”

Creggy then instructed Spiteri to hold his funds for the sale of a Brighton property held by an offshore company, Curzon Limited. Spiteri was then Curzon’s director and organised for the property to be sold, for the sum of £122,574.43. The money was transferred to Spiteri’s law firm’s bank account.

When Creggy was diagnosed with leukaemia in 2001, he moved to Florida, where Spiteri visited him three times. When he then met Spiteri in Washington DC, he instructed him to return his funds.

“He replied that he had deposited my funds in Switzerland in a clients’ account and he informed me that in view of the fact that the funds appertaining to other clients of his were also deposited in the same account, he stated that he would need some considerable time to organise payments to me. I was rather surprised by this statement since one is to presume that clients’ funds, particularly if they are of a substantial value, should be kept in separate accounts and not moved without my consent,” Creggy said in his affidavit.

“I last spoke to Patrick Spiteri in person in or about August 2003 when he told me I would have to await my turn as he was not going to give instructions to return the funds while he was in Malta and that if I pursued him it would be war. I have not spoken or heard from Patrick since.”

Spiteri on his part had denied that Creggy was his client, accusing him of being sought by the British and Russian police, and that he had been convicted of forgery in the USA but spared prison on humanitarian grounds. “I do not owe the sums requested simply because these sums belong to third parties and not to the plaintiff,” Spiteri claimed in his own affidavit.

Finally cross-examined in 2013 after his extradition from London, Spiteri pleaded that he had been bound by professional secrecy and was unable to mention third parties who were the true owners of the monies claimed in this case. On the advice of his layer, Spiteri revealed the third parties to be UK residents Ethel Imber Lithman, Adela Lithman, David Diamond and a certain “E F Falougi of Empire Ltd”, and Shai Granot from Israel.

Spiteri then requested a summons for 20 foreign witnesses, but failed to complete the requisite legal formalities to do.

The court noted: “Once the defendant failed to request to summon witnesses who are currently abroad in the manner prescribed by the law, it is truly off-key for him to come here complaining that the first court deprived him of the opportunity to summon these witnesses. It was the defendant himself who failed to make use of the procedure applicable to his circumstances.”

In 2015 Spiteri asked for permission to exhibit an unauthenticated copy of the 2014 judgement by the UK High Court, stating that the money entrusted to him was not Creggy’s but to two unconnected companies. But the Maltese courts denied the request, because the copy had not been duly authenticated. When a month later, Spiteri deposited a duly authenticated copy of the judgement, it was expunged following a complaint by Creggy’s lawyer who argued that it had been deposited in express violation of an order of that court.

The judges did not agree with this ground of appeal, stating that Spiteri should have requested the court’s authorisation to do so, while also dismissing his claim that the money was not Cleggy’s, pointing out that the UK judgement “changed nothing of the fact that the plaintiff was the depositor and that even had the judgement been exhibited according to law, it would have changed nothing.”

Dismissing all of Spiteri’s grounds for appeal as baseless, the court dismissed the appeal, also ruling that it had been filed frivolously and vexatiously, for which Spiteri was condemned to pay double the costs of the case.