The court has ordered the revocation of a controversial government deal over property on Valletta’s Old Mint Street, which is partly owned by entrepreneur Mark Gaffarena.
The contract will have to be rescinded within one month, according to a final judgment delivered this week, which confirms a court decision three years ago.
The deal had seen Gaffarena acquire various government properties through two public deeds in part exchange for his one-half undivided share of the palazzo on Old Mint Street.
The Gaffarena spouses had acquired that undivided share merely weeks ahead of two notices in the Government Gazette published in 2015, announcing that the property was being expropriated.
That same year, the Lands Department signed two public deeds whereby various tracts of lands were transferred to Gaffarena in part exchange for his expropriated undivided share in the Old Mint Street property.
The government paid Gaffarena some €1.65 million in cash and land compensation for the share of property he had acquired at a fraction of that price.
In 2016 former prime minister Joseph Muscat together with the Attorney General filed proceedings before the civil courts seeking the rescission of those contracts on the grounds that they breached the Disposal of Government Land Act.
All the other co-owners holding the other undivided half of the same Valletta property were authorised by the first court to intervene in the proceedings.
In March 2018 the First Hall, Civil Court declared the property exchange contracts null and void, ordering their rescission within one month from judgment.
Mark and his wife Josielle filed an appeal arguing that the first judgment had been delivered against an entity that no longer existed, namely the Commissioner of Lands.
But that argument was thrown out since the law enabled the court to correct the case title, replacing Lands Commissioner with Lands Authority even at appeal stage.
The appellants also argued that the first court had rejected their request to file additional pleas.
But the court of appeal declared that the first court was correct in doing so because those pleas were based on premises existing at the time the Gaffarenas had put forward their first pleas in the case filed by Muscat not on behalf of the government but in his capacity as a member of parliament.
Thirdly, the appellants argued that the expropriation targeted individuals rather than the immovable property and that compensation for expropriation of such undivided share was not to be shared among all co-owners.
However, the court held that such an argument was based on “a radically wrong premise” which meant that all the arguments that followed upon it were “consequently and inevitably” wrong.
The appellants seemed to have completely misunderstood the pronouncement of the first court, turning it on its head, said the court, pointing out that nowhere did the first court say that expropriation targeted individuals rather than immovables.
On the contrary, that court had stated that “it was clear that government had acquired one-fourth undivided share of property in both instances.”
That meant that the government had acquired a one-half undivided share of the Valletta property which belonged to all co-owners and not just the Gaffarenas' share.
And that was precisely why compensation for expropriation ought to have been due to all co-owners, not merely to the Gaffarena spouses, went on the court.
“This is so obvious that it is hard to understand how the appellants could honestly have understood otherwise,” said the court, “seriously” questioning the Gaffarenas’ reasoning which was described as “inconsistent and contradictory.”
Without delving further into the issue of valuation of the public properties involved in the deeds of exchange, Mr Justices Giannino Caruana Demajo, Tonio Mallia and Anthony Ellul confirmed the rescission of the contracts, declaring that the term fixed by the first court was to run from date of final judgment.