Adrian Delia denies in court taking sneaky €86,000 fee in dispute with former client

The leader of the Nationalist Party, Adrian Delia, may have settled his outstanding tax bill, but in a civil court, he still faces the headache of a claim by one of his former clients.

The dispute concerns an extravagant €86,210 fee Delia charged for securing businessman Boris Arcidiacono a handsome loan from HSBC.

The case has been ongoing since 2011, after the Boris Arcidiacono furniture firm alleged Delia had the money paid to him from what remained of an €800,000 loan to settle creditors’ dues and finance a showroom in Msida.

Arcidiacono contends the €86,210 bank draft issued by HSBC to Delia for his services to secure the loan, was never authorised by him.

Delia appeared in court this week to deny the claims, as Arcidiacono counsel Tonio Azzopardi suggested that he got the bank to pay him the money after his client first refused to pay him a Lm50,000 (€116,500) “success fee”.

“I did not ask the bank for the money,” Delia told the court when Azzopardi asked him whether he had been alone when the bank draft was made out to him after finalising the €800,000 loan deal for Arcidiacono. “The client was with me that day, and the cheque was issued by the bank…. The client knew I was to be paid there and then, and the bank had a list of people to pay and affected payment as such. My job was to assist Boris Arcidiacono get the loan, pay creditors and finance a property.”

Arcidiacono disputes that the final cheque, issued to Delia, was made out in his presence. Delia said he later went to eat at The Carriage restaurant with Arcidiacono and his daughter after the bank meeting.

Delia insisted he could not remember whether he had given the bank any form of authorisation from the client to claim the fee. “I don’t remember. It was an agreed amount. The client was present and we then provided him with receipts. Arcidiacono was present when I was paid. He didn’t contest it then, and wrote back requesting that an invoice made out to him by Aequitas Management be changed with the Aequitas Legal letterhead.”

Delia insisted there was no ‘bill’ presented beforehand for the fee, and that Lm50,000 success fee had been agreed upon verbally. “Arcidiacono said he could not afford the retainer so he said he would pay me once I would secure him the loan. That’s why we moved from a retainer fee to a lump sum,” Delia said.

“Arcidiacono later filed a complaint with both HSBC and the Chamber of Advocates, to whom I had to give an explanation. The bank carried out an international explanation and they found nothing wrong, nor did the Chamber.”

Delia said that although he was owed payments from his retainer fee with Arcidiacono, he did not sue to request any outstanding balance and instead was offered by the client to take goods in kind for the legal office. The firm then severed its relationship with the client.

Both HSBC and the Chamber of Advocates have said they find nothing irregular about the payment

HSBC CEO testifies

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

HSBC Malta chief executive officer Andrew Beane said he had reviewed the correspondence on the case. “In particular I took notice of a letter to the bank from the client’s lawyer which, amongst other things, stated that the client was fully aware and that the lawyer had sent receipts to the client,” Beane said, referring to an internal audit carried out on complaint of Arcidiacono.

“The bank was acting on
behalf on a request from a client’s lawyer. From the bank’s perspective [it] has a clear written letter from the client’s lawyer instructing it that the client was fully aware of the payment which the bank had administered... I believe the bank has to rely on the instructions given to it by the client’s lawyer in good faith.”

Boris Arcidiacono is insisting Delia’s request for the fee was made in the presence of former legal partner Georg Sapiano at Aequitas Legal.

“Delia was my lawyer in the negotiations and he asked for a hefty fee, which he called a ‘success fee’ for helping me get the loan. He asked for Lm50,000. I refused, of course, because I was already paying him on retainer and there wasn’t much work involved for him, certainly not to justify anything near that amount. I was the one who had to collate all the documents required by the bank.”

HSBC has insisted that Arcidiacono was aware of the schedule of payments to creditors and legal and professional fees to be paid 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 at an Msida showroom.

But Arcidiacono 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.

Arcidiacono has suggested that the bank had a close relationship with Aequitas Legal. “Dr Sapiano actually told me that it was thanks to them that I would get the loan from HSBC because their firm gives them millions in business, he said, through a remote payments billing agency.”

However, Arcidiacono only complained in 2010 with the bank as to why it had issued the €86,210 fee to Adrian Delia. HSBC employee Eric Mamon said he had been told by Delia, who was leading the negotiations on the loan, “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).”

Arcidiacono is also disputing the receipts from Aequitas Legal sent to him by HSBC: one from Aequitas Legal and the other from associated firm Aequitas Management for the combined sum of €86,210.

“I pointed out to the bank that I never deal with Aequitas Management, which is Dr Delia’s and Dr Sapiano’s business firm,” Arcidiacono said.

HSBC later sent two receipts from Aequitas Legal: one numbered T6778 and dated 2 September 2009, for the sum of €48,450, replacing the earlier invoice issued by Aequitas Management Ltd; the other numbered T6683, dated 23 June 2009 and for the sum of €37,760 – together totalling €86,210.

“The tax invoices were both post-dated and issued by Aequitas Legal,” Arcidiacono said, “but HSBC made out the cheque to Delia’s personal name. I asked for documentary proof of where and when he had deposited the cheque, but the bank was not able to give me that. I strongly suspect that the cheque was merely a formality and that Dr Delia came to some arrangement with the bank under which he would claim the amount left in my loan facility as fees due to him, without my consent or a supporting invoice presented to me, and this amount would be set off by the bank against what he himself owed the same bank.”

ADRIAN DELIA writes (9 June, 2018)

I refer to your article “Delia denies taking sneaky €86,000 fee in dispute with former client” (3 June, 2018). 

Your investigative journalism seems to have left out certain important facts from the said article. Dr Delia would like to point out that the case was originally instituted solely against HSBC Malta on 23 May 2011 and not against him as your article implies. It was only on the 20 June, 2012 that Dr Delia was joined in the suit against HSBC.

You write: “Arcidiacono contends the €86,210 bank draft issued by HSBC to Delia for his services to secure the loan, was never authorised by him”. The impression given is that Dr Delia did something untoward, illegal and ethically incorrect. This is far from reality.

For reasons you know best, you failed to communicate with Dr Delia for him to give you his version of events before you published the said article. It is his understanding that an investigative journalist of your calibre would have deemed it essential to ask for his views and comments before going to print. Had you done so, Dr Delia would have gladly furnished you with all the necessary documentation including the following:

(i) A first tax invoice numbered T 6683 and dated 23rd June, 2009 issued by Aequitas Legal for the amount of €37,760 (inc. VAT);

(ii) A second tax invoice numbered T 11/09 dated 25th June, 2009 issued by Aequitas Management Limited for €48,450 (inc. VAT); 

(iii) A letter dated 10th August, 2009 sent by Adrian Farrugia on behalf of Boris Arcidiacono Limited whereby it was stated “Please find attached a copy of Aequitas Legal Ltd tax invoice T-6683 for the amount of €37,760. We kindly request relative fiscal receipt to cover the said amount, pending since 23rd June 2009. Attached also find, your original invoice T11/09, issued by Aequitas Management Ltd dated 25th Jun 2009, being returned to your goodselves. Please issue same, under heading Aequitas Legal Ltd for the amount of €48,450 including a fiscal receipt” (attached);

(iv) A tax invoice numbered T 6778 and dated 2nd September, 2009 issued by Aequitas Legal for €48,450 instead of the previous tax invoice numbered T11/09.

The letter of the 10 August, 2009 is pretty self explanatory. Dr. Delia is of the belief that a person claiming that he did not know that the amount of €86,210 was being charged to him, or better still, that it was made without his consent and never authorised by him, would not have asked that a tax invoice issued under Aequitas Management Limited be changed to Aequitas Legal. Indeed, that individual would have contested the amount and stated that it was not due or stated that the payment was never authorised by him and that he did not want to pay such an amount. None of this happened at that time. So much for the “sneaky” part! It was only years later that action was taken for reasons best known to the individual concerned.

Finally my client would like to point out that a tax invoice is issued after receipt of funds and not before (the same applies to fiscal receipts). The relative legal fiscal regime at the time provided for this.

Dr Vincent Galea obo Adrian Delia

Editorial Note This was not an ‘investigative’ report but a bona fide report of a court hearing that enjoys privilege as laid down in Article 7 of Chapter 579. Dr Adrian Delia’s denials and the bank’s previous statements refuting the plaintiff’s claims have been already reported, and Dr Delia had ample time to state his case clearly while answering the plaintiff’s counsel’s questions.