Judge dismisses Gaffarena's attempt to force Old Mint Street sale

A judge has slammed two notaries involved in the controversial expropriation of a palazzo in Old Mint Street, Valletta, involving property speculator Mark Gaffarena.

This afternoon, Gaffarena, who had benefited from the government’s unusual expropriation of his share of a Valletta palazzo, has lost a court case in which he was attempting to force through the sale of another portion of that same building.

In a sworn application filed in 2016, Gaffarena and his wife Josielle called upon the court to force the owners of another quarter-share of 36, Old Mint Street, Valletta to appear on a contract of sale – which, according to the October 2014 promise of sale agreement, ought to have happened in April that year.

In both expropriations of Gaffarena’s two 25% shares of the Old Mint Street palazzo which is currently home to a number of government offices, the Government Property Division had chosen to expropriate only Gaffarena’s shares and not the 50% share of the building from all co-owners – a decision whose legality is being questioned in the courts.

In her judgment dismissing Gaffarena’s case, madame justice Lorraine Schembri Orland highlighted problems with the testimony she had heard.

“The court points to the imprecise testimony of the two notaries in this case. Notary Angela Bezzina renounced her patronage of the [Gaffarenas] after the publication of an article in a local newspaper. From the evidence, this court has no doubt that she was aware of the expropriations because she presented the Form E required for expropriation... Despite this, she didn’t notify the defendants with what she had discovered, despite her obligation as a notary public to act beyond the interests of just one party. She never prepared the searches about the share being sold.”

Notary Antoine Agius, who took over  after Bezzina stepped down was also in the firing line. “Notary Agius was also evasive in his testimony when asked whether he had been aware that there were two declarations by the President of Malta about the expropriation of a quarter share and another quarter share of 36, Old Mint Street, Valletta. The court finds it hard to believe that both the plaintiffs and more so Notary Bezzina, did not inform him of anything. The same notary Agius said that he had no knowledge of this.” However after a letter he filed on 7 April 2016…asking the defendants to appear on the final contract, the Gaffarena’s lawyer had sent him a letter dated 12 April informing him of two declarations of expropriation. This was followed up by a judicial letter by the defendants.

The property in Old Mint Street that houses the BICC offices

“The court also finds it difficult to believe the testimony of Mark Gaffarena who said that he didn’t know if the Notary had established the quota for sale and that he didn’t remember whether she had completed her searches. Neither did he know what papers he had passed on to Notary Agius. All this when he describes himself as a person whose business is the buying and selling of property, where he should have a certain knowledge of issues like title and would be vigilant over the object that he is about to buy and pay for.”

In the light of his testimony, the court said it was unable to establish the price of the deal as this varies according to the quota “which has not been established to this day.”

The case filed by the Prime Minister against Mark Gaffarena was decided in March 2018 in favour of the Prime Minister and Attorney General and the rescission of the contract was ordered. The case is not final or definitive, noted the judge. However, those proceedings deal with the validity of the contract of exchange between the Government and the Gaffarenas and not the validity of the expropriation in itself. “Whatever the final outcome of those proceedings the fact remains that the share of one half of the property today belongs to the Government of Malta. That share was not taken only from the plaintiffs…but also from the defendants.”

According to an NAO report on the expropriations, the property had been bought in November 1898 by Raffaele Psaila, who had left equal shares of the property to his four daughters – who later married into the Galea, Mercieca, Bonello and Cefai families – and their children. Separately, these four shares, the Galea, Mercieca, Bonello and Cefai shares, were passed down over a number of generations.

To date, two of the quarter undivided shares, still belong to the Bonello and Cefai families. The other two quarters, originally belonging to the Galea and Mercieca families, had been purchased by Gaffarena in 2007 and 2015 respectively, and were expropriated by the government in 2015. Gaffarena had obtained the first undivided 25% share from the Galea family on 18 December, 2007, which was expropriated by the government on 12 January, 2015 for €822,500 in cash and lands.

Another 25% share was sold to Gaffarena by the Mercieca family on 26 February, 2015 and expropriated as per the President’s Declaration on 8 April, 2015 for another €822,500 in cash and lands – a mere two months after it was purchased.

The Prime Minister had filed a court case to recover the money and public lands paid to Gaffarena for the irregular expropriation. Half of the Bonello share is covered by a promise of sale with Gaffarena, entered into on 31 October, 2014, which expired on 30 April, 2016; the other half remains in possession of the Bonello heirs. It is this (Bonello) share whose sale Gaffarena was trying to force.

The owners of the remaining 25% of the property in Old Mint Street said that they had never been notified of plans to expropriate the property and only found out by chance. David Cefai, whose family owns the remaining quarter undivided share of the property had made the claim whilst testifying in a case filed by the Prime Minister against the Gaffarenas.

That case was filed with the stated aim of recouping the lands transferred to the Gaffarena couple as part of the deal for the Old Mint Street palazzo’s expropriation. That fourth and final share of the property, belonging to the Cefai family, was also under a promise of sale signed with Gaffarena on 26 March, 2015, the one-year term of which had lapsed on 26 March, 2016.