Court throws out MDA boss’s €260,000 request after tenants skipped €220-a-day rent payment

The tenants of a Gzira outlet rented to them by developer Michael Stivala of ST Hotels, also the president of the Malta Developers Association, have accused him of levying on them “usurious” penalties after they failed to pay rent in a timely fashion.

The two Italian nationals were called on to pay Stivala over €260,000, which they said was an excessive amount representing a €700 daily penalty over and above their daily €220 rent, which they had failed to pay him on time.

“This amount is not only totally disproportionate, but it constitutes usury,” their lawyer told the Court. “The amount requested is too excessive in that it goes against the public order, and indeed illegal, intended only to abusively force the tenants into submission.”

ST Hotels rented out the outlet at 141, The Strand in 2018 to the firm Calice Rosso, owned by Italian natioal Paolo Dellamano, but run with co-nationals Pablo Esposito as co-director and Maria Carriero, for a daily rent of €180. Esposito and Carriero were guarantors on the lease agreement. To date, the company Calice Rosso is still being run by Paolo Dellamano without Esposito.

The daily rent increased to €200 and €220 (or €6,600) after each six-month period, and then again by 10% in 2020.

The defendants failed to continue paying their rents and utility bills from April 2020, and after failing to respond to calls to pay their rent, were told they would be inflicted with a €700 daily penalty which, according to the rental contract, was liable when the rent is left unpaid after just seven days.

After failing to agree on an amicable settlement, in which the Italians informed Stivala they were no longer principals of the Calice Rosso company, Michael Stivala lodged court action against the tenants.

Lawyers for the tenants told the court that Stivala had no right to impose any penalties on them, because proceedings were now ongong in the Rent Regulation Tribunal, the forum tasked with settling urban rental disputes.

“It’s the tenants who have suffered the greatest damage here after having spent so much money to make the outlet usable,” the defendants’ lawyers told the court.

The Court heard how Stivala had only referred to a first rental contract, when the defendants claimed that he had not referred to a private agreement in May 2020 – “a misleading omission” they said – to amend the original rental contract.

“The defendants were no longer guarantors of the Calice Rosso company, as agreed with ST Hotels... this confirms that not only was there consent between all parties, but also a recognition that the defendants had relinquished their roles in Calice Rosso.”

In her decision, Madam Justice Anna Felice referred to case law saying that given that proceedings were ongoing in the rent regulation tribunal, the matter had to be dealt with in that forum. She turned down the case, and ordered Michael Stivala to bear all legal expenses.