Former prime minister Joseph Muscat is challenging a €30 million freezing order imposed on his assets as part of criminal proceedings related to the hospitals deal.

The assets freeze was imposed last month when Muscat was charged with money laundering, bribery and corruption, among a host of other charges related to the deal that saw three state hospitals handed over to Vitals Global Healthcare. He pleaded not guilty.

Lawyers for Muscat have filed an application challenging the freezing order in court, saying that the sum of €30 million was inflated and that any freezing order with respect to Muscat should instead be limited to the €60,000 mentioned in the proces verbal of the magisterial inquiry that led to the arraignment.

The lawyers insisted that before issuing the freezing order, the court should have itself been convinced that there was enough evidence to justify the amounts, instead of simply resting on the assertions of the prosecution that it was so.

Lawyer Ishmael Psaila also pointed out that earlier this week a lack of clear evidence had seen a freezing order issued against Sciacca Grill lifted. That solidified the need for the prosecution to substantially prove how it drew up the figures listed in the freezing order.

In his rebuttal, prosecutor Francesco Refalo said that the court at its discretion, may see fit to approve a freezing order if there was valid reason to do so and when the charges made against the accused supported the issuance of such an order.

Prosecution: Amounts related to the circumstances of the case

The prosecution, he said, had followed the letter of the law when drafting the freezing orders and that the amounts requested for the assets freeze related to the circumstances of the case. Refalo added that it was not the competence of the court hearing this challenge to decide on the merits of the case, but only to decide whether there was a valid enough reason to issue the freezing order or not.

During the same proceedings, lawyer Stefano Filletti, appearing for Adrian Hillman, who stands accused of fraud and money laundering, argued that there was no documentary evidence to support issuing a freezing order against him and said that he had been targeted simply due to his friendship with Keith Schembri, Muscat's former chief of staff -who is also one of the accused.

Pointing out that he would be resting on similar points of law to rebut all the defendants challenging the freezing order, Refalo went on to tell the court that he wished to compare the situation to when freezing orders were signed off during an arraignment. When a person was arraigned under arrest and the prosecution requested a freezing order, the court would not have seen any evidence to support this request and it based its decision on the circumstances around the charges.

Similarly, he said, in this case, freezing orders were based on similar circumstances.

Lawyers for Sciacca Grill also briefly made submissions during proceedings. On Tuesday, Magistrate Rachel Montebello discharged Sciacca Grill, a company that operates a chain of restaurants, from proceedings due to the prosecution failing to sufficiently prove why it had been included in proceedings. The prosecution held that the company, which once had ties to Keith Schembri, had skimmed money off contracts it received to supply the state hospitals. But lawyers Franco Debono and David Bonello successfully argued that the prosecution did not produce a shred of evidence to substantiate its claims.

In court on Wednesday, Debono requested the court to note that, given the previous day’s events, the effects of the freezing order on the company had been extinguished due to a lack of prima facie evidence and out of “extreme caution” he asked the court to declare this as fact.

Lawyers seek constitutional reference

Lawyer Edward Gatt, representing Keith Schembri and Konrad Mizzi, requested a constitutional reference on the current laws that regulate freezing orders, as in their current form they may present a situation in which the accused’s right to a fair hearing could be breached.

Gatt said that in relation to this, proceedings had become “frustrating and tedious” and were becoming an obstacle to people being able to attain justice.