Updated | Schembri gets damages over blunder that sparked Panama falsification report

Malta Independent ordered to pay €8,000 in damages over report sparked by Daphne Caruana Galizia claim that Keith Schembri had falsified HSBC statements

Daphne Caruana Galizia had alleged Keith Schembri had falsified HSBC documents but the bank had told the court that a drop-down menu mistake had led to a grave misrepresentation of the banking letters.
Daphne Caruana Galizia had alleged Keith Schembri had falsified HSBC documents but the bank had told the court that a drop-down menu mistake had led to a grave misrepresentation of the banking letters.

The Malta Independent has been ordered by a court to pay €8,000 in total damages to the Prime Minister's chief of staff Keith Schembri, Kasco director Malcolm Scerri, and Nexia auditors Brian Tonna and Karl Cini in two libel cases.

The libel suits were filed against The Malta Independent on Sunday’s editors Pierre Portelli (now PN head of communications), David Lindsay and Stephen Calleja, arguing that a news report it carried was libellous and defamatory.

The Malta Independent on Sunday was following up on a blog published by the same newspaper’s columnist, Daphne Caruana Galizia, and claimed that HSBC Bank Malta was expected to launch an investigation into the possible fraudulent presentation of documents concerning Schembri and Malcolm Scerri, the general manager of Kasco Ltd.

READ MORE HSBC drop-down menu blunder that sparked Panama falsification ruckus

The newspaper’s report attempted to cast doubt on the validity of two HSBC information reports, citing the fact that a letterhead bore the name of a branch which was closed.

It however transpired that the bank had no intention of probing the matter since the legitimacy of the quoted documents had been confirmed.

In both cases, magistrate Francesco Depasquale held that the defendants had opted to publish almost in its entirety a blog post by Daphne Caruana Galizia, who had originally made the allegations. “The defendants could have easily restricted their article to the first paragraph of the story, which in actual fact was the only 'investigation' which the writer made before reproducing the story which had already been published some days before – but this was not done.”

“Instead, the author chose to emphasise… that there was going to be an investigation by HSBC on that which he described as ‘alleged fraudulent documents vouching for Keith Schembri and Malcolm Scerri.’”

The court said the intention of the author was not to inform the public of an issue of public interest but to reaffirm allegations that Schembri and Scerri had used false documents to open overseas companies. “Pierre Portelli had been informed that it appears that all this had been an administrative error, but this detail was totally omitted [in the report] and was mentioned only three days later, when the damage was already done.”

The news website had also allowed third parties to leave comments on the article, some of which gave the message that the plaintiffs were involved in criminal activity and forgery.

The court noted that it would have been far better had the defendants not tried to shy away from responsibility for the comments and instead tried to identify those who made them in order for them to be made co-defendants. This would have limited their responsibility and passed it on to the armchair critics who “choose to comment from the comfort of their own homes, behind the shield of a computer system,” it said.

Magistrate Depasquale said he had “serious concerns” about the malicious misuse of comment boards, which he said were being used to undermine freedom of expression. “Whilst everyone has the liberty to express his thoughts, nobody has the right to judge a person and allege facts which turn out to be false, without eventually facing punishment.”

In a statement, Nexia BT partners Brian Tonna and Karl Cini welcomed the outcome of the court case, and said the libellous story had not been signed and had repeated allegations made by the late Daphne Caruana Galizia.

“Pierre Portelli should also shoulder responsibility with respect to the content of the aforesaid article as he was in contact with the head of communications at HSBC and had been adequately and timely informed that the case in question resulted from a ‘prima facie’ administrative error, yet this fact was conveniently left out of the article which appeared on the 8 May 2016 but was only reported in the corrected article on the 11 May 2016 after refusing to issue an apology,” the two men said.

“Additionally Pierre Portelli, who had been made aware of this administrative error, decided to ignore this matter when he replied to the lawyers of Brian Tonna and Karl Cini, as if he had no knowledge of this. It is to be noted that Pierre Portelli decided not to take the witness stand during the proceedings.

“It is clear that despite having knowledge of the administrative error, the editors allowed libelous and defamatory comments in respect of Brian Tonna, Karl Cini and Nexia BT to be posted on their website in relation to the article without controlling said comments or otherwise filtering or censuring the content.”

Tonna and Cini were awarded €3,000 of the total damages. Brian Tonna and Karl Cini said the money will be donated to ALS charity Dar Bjorn in Nexia BT's name.


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