Developer Michael Stivala said on Thursday that it was Joseph Muscat who had reached out to him looking for a job and not vice versa.

Stivala, the president of the Malta Developers' Association, gave the information while testifying in libel proceedings he instituted against independent politician Arnold Cassola.

He said that a third party had informed him that the former prime minister wanted to meet him to discuss the possibility of working together. 

He did not name that third party. 

Stivala sued Cassola for libel over a series of Facebook posts following a Times of Malta report detailing how Muscat had been put on Stivala’s payroll, shortly after his resignation as prime minister, through a consultancy agreement with Stivala’s vast hotel and development group. 

In these posts, Cassola alleged that Stivala had been “gifted illegalities” by Muscat during his tenure and he was now being “paid back” through the consultancy. 

On Thursday, Stivala said that following the unexpected resignation of his brother, Carlo Stivala, from the family business, the company had sought to fill the gap left by his absence. 

While no vacancy notice had ever been published through conventional means, Stivala said that he and other directors of the company sought out certain individuals about working for the company, including people who worked for the “big four” consulting firms and other high-level executives with experience in the tourism and property industry. 

Muscat had not been approached at this time but he was mentioned to Stivala by the third party.

Stivala told the court that he had first consulted his siblings, who also serve as the company’s directors, before setting up a meeting with Muscat. 

“They told me to meet him and see what he had in mind, we discussed how he was an economist and that he had an understanding of the property industry,” Stivala said. 

“So we met at my office for the first time and we discussed what services we were looking for and what services he was able to provide. It lasted an hour, maybe an hour and a half and we agreed we would think about it and speak again at another time.” 

Stivala said that this was the first time he had ever met Muscat on a one-to-one basis, as previously the two had always met on official business while Stivala held various positions within the MHRA and the MDA. 

He said that following this initial meeting, he and Muscat spoke a number of times on the phone and the latter expressed interest in working for him, after which a second meeting was held and contract negotiations began. 

Why was action taken against Cassola?

Lawyer Matthew Cutajar, appearing for Cassola, questioned why Stivala had taken umbrage with Cassola’s Facebook posts when several news portals had carried reports and opinion pieces essentially also alleging that there were ulterior motives to the group awarding Muscat a consultancy. 

He replied that the company’s legal team vets how they are mentioned in the media and the articles cited in court did not accuse him (Stivala) of corrupting Muscat through the arrangement, while Cassola’s Facebook posts did. 

The company, he added, also has an interest in protecting itself from “adverse media attention” to protect its reputation with shareholders and this was why they felt it was appropriate to take action against Cassola. 

Cutajar then exhibited a number of international news articles which reported on Joseph Muscat being named The Organized Crime & Corruption Reporting Project’s ‘corrupt person of the year’ in 2019. 

“You said that you took these steps about adverse media because of your investors, didn’t these bother you as well?” Cutajar asked. 

“No,” came Stivala’s curt reply. 

“The board made its due diligence, we looked thoroughly at whether Dr Muscat was being accused of something concrete and it resulted that he was not and he passed the due diligence.”

“So these articles from various global news outlets did not bother you in how they could be perceived by your investors but the four lines written by Professor Cassola on Facebook did?” Cutajar retorted. 

Stivala reiterated that Cassola’s posts had directly accused him of corrupting Joseph Muscat, while other reporting did not. 

Bank pulled promise of funding for Sliema hotel construction 

While being questioned about various reports of alleged illegalities on a number of his company’s properties and businesses, Stivala revealed that a Sliema hotel development project had to be shelved after a bank reneged on its promise of a loan to move ahead with construction. 

The questioning revolved around an enforcement notice that had been issued on an awning and outdoor catering area outside the Sliema Hotel, which is owned by Stivala but is rented to a third party. 

Stivala had filed a planning application seeking to demolish and rebuild the property, and when this was granted, the permit included a condition that the outdoor catering area had to be removed before the project could go ahead. 

However, some years later, the company filed another application seeking to sanction the outdoor catering area. 

This, he revealed, came as the project’s initial funding had fallen through and the company was facing difficulties in securing alternative funding. 

“APS initially gave us a loan to buy the property and had issued a sanction letter for another loan to fund the redevelopment,” Stivala said. 

“However, in the meantime, the bank had changed its policy and had decided it was no longer going to fund buildings above 11 storeys. So we were in a bit of a confusing position, we had purchased this property and had permits to develop it and APS told us, sorry, we’re no longer going to finance this.”

“A decision was made to temporarily freeze the project and to avoid more adverse media coverage, we decided that in the meantime we would also put in the sanctioning application.” 

The case is set to continue on April 22 

Lawyers Matthew Cutajar and Eve Borg Costanzi appeared for Cassola. Lawyer Vince Galea appeared for Stivala.