The current legal regime allowing a defendant seven working days to challenge a freezing order, contrary to the unlimited term available to the prosecution, is to be challenged before the constitutional courts.
This judicial scrutiny comes in the wake of a ruling delivered by Madam Justice Edwina Grima in proceedings related to the Vitals case wherein former prime minister Joseph Muscat, his former minister Konrad Mizzi and former chief of staff Keith Schembri face criminal charges over their alleged involvement in the fraudulent hospitals concession.
At the first hearing before the Magistrates’ Court in May, the prosecution sought and obtained millions-worth freezing orders over the assets of the accused.
Schembri and Mizzi filed an application in terms of law, requesting the Criminal Court to revoke the order or vary it.
During a hearing on Wednesday, the applicants’ lawyers raised a constitutional issue concerning the current legal regime, arguing that it created a lack of equality of arms between the accused and the prosecution.
The crux of their argument pivots upon article 36(8)(ii) of the Proceeds of Crime Act as amended earlier this year.
Those amendments were designed to lessen the negative impact of the draconian law on freezing orders which previously made it possible for the prosecution to obtain blanket seizure and freezing of the defendant’s assets.
In terms of the amendments, such orders are now capped.
The prosecution must quantify and identify the assets to be frozen and the order must be limited to assets believed to be derived from criminal activity.
But once the court upholds the prosecution’s request and issues the order, the defendant has merely seven working days to contest that decision before the Criminal Court which is to deliver its decision accordingly.
On the contrary, the law does not bind the prosecution with any such time limit when contesting or seeking to vary any freezing order.
Such a situation resulted in a breach of the defendant’s fundamental rights to a fair hearing and also to enjoyment of his property.
It also created a disparity of arms between the parties, argued defence lawyers Edward Gatt and Mark Vassallo, requesting the judge to refer the matter to the First Hall, Civil Court in its constitutional jurisdiction to determine such alleged breach.
The Attorney General objected to the request.
However, Madam Justice Grima upheld Schembri’s and Mizzi’s request, deeming the issue as not frivolous or vexatious.
Such freezing orders could trigger “draconian consequences” upon the defendants’ fundamental property rights.
Once confirmed, the freezing order meant that the defendants would not be able to enjoy their property while the criminal proceedings continued and they had no right to claim any ulterior revision of the court order.
The amendments introduced by means of Act VI of 2024 were intended to strike a balance between the right of the state to make sure that proceeds of crime are not dissipated and lost and the accused’s right to enjoy his property.
But the legislator had to make sure that that balance was attained especially when the courts were faced with such complex cases like the one at hand, observed Judge Grima.
The defendants were right in arguing that seven working days were too short for them to adequately contest the freezing order and the court to review its validity.
This was more so in light of the voluminous inquiry involved and the substantial amounts claimed to be proceeds of crime.
In light of such considerations, the court upheld the defendants’ request, ordered the matter to be referred to the constitutional courts and the statutory seven-working day limit to be suspended until the constitutional issue was decided.
Meanwhile, however, the freezing order issued by the Magistrates’ Court still stands.
Lawyers Edward Gatt and Mark Vassallo are counsel to Schembri and Mizzi.