Court of Appeal reopens €10 million Spinola Bay property dispute

The Court of Appeal has overturned a key finding in a civil case over a €10 million promise-of-sale on a Spinola Bay complex, ruling that Carmelo Stivala Group Limited was not in default over a €700,000 deposit that was never cashed. The case will now return to the First Hall of the Civil Court to be heard on its merits.

The dispute stems from a 2017 promise-of-sale in which Eighty Two Company Limited agreed to sell Stivala Group a large mixed-use property in Triq Spinola, St Julian’s. After signing, it emerged that part of the airspace above one of the underlying tenements had remained government-owned.

Stivala Group argued that the vendors had promised to sell property they did not fully own and sought a reduction in the agreed €10 million price.

The First Hall had dismissed the claim after accepting the vendors’ argument that Stivala Group was in default because the €700,000 deposit had not been paid. But the Court of Appeal found that the buyer had fulfilled its obligation by handing the cheque to the notary on the day of signing, and that the failure to cash it could not be attributed to the company.

A letter sent later by the buyer, instructing the notary not to release any funds before the airspace issue was resolved, did not amount to blocking the cheque from being deposited.

Because the deposit issue was central to the vendors’ defence, the Court of Appeal set aside that part of the judgment, rejected the pleas tied to default, and ordered the case to be sent back to the First Hall to determine whether a price reduction should be applied. Costs linked to the overturned ruling were imposed on the defendants, while appeal costs were shared equally.

The dispute will now return to the civil court, where the underlying questions of title and valuation will be assessed afresh.

Defence lawyer Vince Galea appeared for Stivala Group. Lawyer Peter Fenech represented the defendants.