The General Workers Union breached its contractual obligations when it leased parts of its Valletta headquarters to ARMS Ltd and Sciacca Grill Ltd, a court declared on Thursday, annulling both leases.
Judgment was delivered in civil proceedings filed against the union by former opposition leader Simon Busuttil in 2017 following the findings of the Auditor General who reported that the union had breached its contractual obligations and recommended court action against it.
Since no action was taken by the government, the opposition filed a case before the First Hall, Civil Court challenging the validity of the two lease agreements.
It all started when the union rented out parts of the building in South Street corner with Old Bakery Street, Valletta in 2014.
The dispute pivoted upon two contracts whereby the union had originally been granted the premises under title of perpetual emphyeusis by the then-Lands Commissioner.
The first contract was signed in February 1957 in the records of notary Victor Miller.
In December 1997, following a parliamentary resolution, that contract was amended to allow the union to assign parts of the property under title on emphyteusis or lease for commercial purposes.
But it was only as long as the union held 51% of the shares in the business to which the property was leased.
However in 2014, the GWU leased a part of the property on South Street to Kasco Foods Ltd, now Sciacca Grill Ltd.
It also leased another part of the property on Old Bakery Street to ARMS Ltd at annual rent of €61,950.
The opposition argued that both leases breached the terms of the emphyteutical concession and also the parliamentary resolution in terms of the Disposal of Government Land Act.
The union did not satisfy the majority shareholder condition.
The court, presided over by Mr Justice Mark Simiana, concluded that it was "manifestly not the case" that the union satisfied the majority shareholder condition.
The leases went against the parliamentary resolution which had allowed the union to transfer parts of the government property to third parties.
Although ARMS Ltd was a government-owned entity, the parameters of the emphyteutical concession of 1957, as subsequently amended in 1997, could not be stretched beyond the literal meaning of the terms of the concession.
And although the opposition did not expressly request the court to annul the leases, there was nothing holding back the court from doing so.
The court thus declared that the GWU had violated the concession whereby it acquired the property from government and also the parliamentary resolution, thereby declaring both leases to ARMS and Sciacca Grill null.
However, the court turned down the opposition’s request to annul the original emphyteutical concession in favour of the union, declaring that the request went beyond the parameters of the relative law under which the transfer was effected.
Requests invoking eviction 'superfluous'
Meanwhile, the GWU said it had successfully fended off an attempt by the PN to evict the trade union from its historic Valletta headquarters, developed over the last decades on a public land concession that was granted to it by the State in 1957.
"The court stated that any requests invoking eviction were “superfluous” given that this is a special and exceptional action that could not be contemplated under the action filed by the Nationalist Party."
The GWU said this is the second court victory since a Constitutional Court in December 2018 found the union’s right to a fair hearing had been breached when Madam Justice Jacqueline Padovani Grima refused to recuse herself from the case, due to her familiarity with the plaintiff’s lawyers from the Fenech & Fenech law firm.
GWU general secretary Joseph Bugeja expressed his satisfaction at the court verdict: “The effect of this court decision today is that the Workers’ Memorial Building is here to stay, to be enjoyed by workers and their families and GWU members, allowing this trade union to continue working as a shield for workers’ rights.”
Lawyer Edward Debono assisted the opposition. Lawyers Aaron Mifsud Bonnici, John Bonello, Chris Vella and Marycien Vassallo assisted the GWU.