Government, Delia, oppose Steward’s request to exhibit new evidence in hospitals appeal case

The government and Adrian Delia have both filed replies to several requests and claims made by Steward Health Care in its appeal against a court’s decision to rescind the hospitals concession contract

Steward Health Care runs three former public hospitals that were granted on concession
Steward Health Care runs three former public hospitals that were granted on concession

Government and MP Adrian Delia have filed applications today, asking the courts to dismiss appeals to a judge’s recent decision to rescind the Steward hospitals concession contract, on the grounds of fraud.

The Government is requesting that its case be heard urgently, citing the public and national interest.

In a statement issued on Tuesday afternoon, the Government said that while it had not filed an appeal to the decision handed down by Judge Francesco Depasquale in the First Hall of the Civil Court in February, it had responded to a total of ten court applications that had been filed by Steward-related companies.

In its responses, the Government opposed Steward's request to exhibit new evidence and documents, adding that should the court uphold this request, the Government was reserving the right to respond to them by itself exhibiting documents that “were not available, and neither in existence” before the judgement was handed down.

This, it explained,  was because of developments which had occurred after the case was concluded.

It also opposed Steward's request for a preliminary reference to the European Courts.

Steward entered the temporary emphyteutical concession “with their eyes open and their pockets widened” - Adrian Delia 

Nationalist MP Adrian Delia also filed his replies to Steward Healthcare’s appeal and other court filings made by its related companies. Delia had filed the original court case demanding that the contract be rescinded.

The issues dealt with in the replies, which number five in all, overlap at times, but essentially argue that:

1. Steward Health Care International, S.L.U. needed to first prove that it has a valid juridical interest, as it was not a party to the original lawsuit.

Delia's lawyers argue that the convoluted ownership structure meant that the company which filed the appeal had not been a party to the original lawsuit.

“The shareholder of Steward Malta Assets Limited (C-70625) and Steward Malta Management Limited (C-70624) is the respondent company Steward Malta Limited (C-70546), while the shareholders of the respondent company, Steward Malta Limited, is Steward Health Care International Limited (C-83293), and therefore the interested third party, that is, Steward Health Care International S.L.U, does not even have a legal relationship with the same companies because they are not the shareholders of the present respondents, and therefore this is clearer evidence that they should not have the right of appeal because they have no juridical interest in the case”

Delia argued that the third party company’s claim to have an interest in the business forming the subject matter of the present case, is "completely incorrect and misleading as this business is a contract made by other people that cannot affect the rights of a non-party."

He described as "fatuous"  the claim made by the third party company to have suffered a violation of its fundamental right to property, "when it is not the owner itself, nor the shareholder of the contracting companies that were found to have defrauded the people of Malta and Gozo. That here they are expecting to keep public property [as security] for their debts when the parties were found to have entered into the temporary emphyteutical concession in a fraudulent manner and consequently fraus omnia corrumpit."

“Therefore...the appellant is of the humble opinion that Steward Health Care International S.L.U, a company incorporated and registered in the Kingdom of Spain, which is not a shareholder of the respondent companies, has no juridical interest to file this appeal and therefore its claims must be rejected, with costs against the same interested third party.”

2. That Steward had failed to give a valid reason for only exhibiting several documents, which had been in their possession from the start, at the appeal stage.

Likewise, Delia argued, Steward Health Care International S.L.U had failed to give valid reasons to justify its request to only exhibit the documents listed in its application at the appeal stage, when it also emerges from those same documents that they had been available and producible in court by Steward Malta Limited during the original proceedings before the First Hall of the Civil Court.

3. That Steward's request for a preliminary reference to the Court of Justice of the European Union was spurious

Delia argued that Steward Malta Assets Limited, Steward Malta Management Limited and Steward Malta Limited had also failed to justify their requests for a preliminary reference to the Court of Justice of the European Union.

Steward's request and the questions proposed by them in their application of 15 March 2023 “absolutely do not raise any genuine point of interpretation of European law," and were not necessary in order to decide the present case, which he said, is entirely based on provisions of domestic law.

Steward's request for the preliminary reference was also inadmissible, Delia argued, because it had to request the interpretation of a European law in a general manner that was in the community interest "and not to ask the European Court  to pronounce itself on the compatibility of a domestic law with a European one, or to serve as a further appeal from the decision by the domestic courts." 

The request for the preliminary reference is also inadmissible, because it only relates to a domestic issue that is not of community interest, he said.

4. That Steward’s appeal effectively admits that it had failed to ensure that the original concession had not been won fraudulently when it took on Vitals Global Healthcare’s business. 

Also evident from the appeal filed by the Steward companies, Delia said, was their repeated reference to the fact that the temporary emphyteutical concession was fraudulent, and that they had failed to carry out the appropriate due diligence that it was obliged to do according to the law before it acquired the shares of Vitals Global Healthcare company. Steward had claimed to have been pressured by the Maltese Government into reaching an agreement as soon as possible in order to acquire the company, Delia said.

"Therefore it can never be said that Steward Malta Limited and the related companies had nothing to do with the shortcomings of Vitals Global Healthcare and the related companies," argued Delia's lawyers, because "it itself had failed to ensure this, because having acquired the shares of the company Vitals Global Healthcare, it was also going to take on everything that had been done incorrectly or through collusion and fraud by Vitals Global Healthcare." This was a clear admission by the company to the fraudulent nature of the concession, said the lawyers.

“Therefore all this shows that the Steward companies entered the temporary emphyteutical concession, with their eyes open and their pockets widened. Their failure to carry out the proper due diligence, cannot now exempt them from their obligations and responsibility, because of the harm inflicted by them and by government functionaries on the people of Malta and Gozo, as a result of their shortcomings.” 

“In spite of the fact that they had bound themselves to carry out structural works in the hospitals, seven years after the concession was granted, they had not completed works at St. Luke’s Hospital to attract medical tourism, they had not built the new Gozo General Hospital, nor had they restructured the Karin Grech hospital, major obligations that should have been fulfilled and have not been fulfilled, but that they have already been paid for and therefore have misappropriated the money to the detriment of the Maltese State.”

Lawyers Edward DeBono, Nicholas DeBono and Thomas Bugeja filed Delia's replies.