The Labour Party has settled some of its debts – which go back many years – through the sale of Australia Hall in St Andrew’s, The Sunday Times of Malta has learnt.
The deal, which was only possible after the new Labour government instructed the Lands Department to drop a court case against the party over 10,000 square metres of prime property in St Andrews, was reached last month and will also see the former Raffles disco – which 20 years ago was already worth €1 million – return to Labour.
It is not yet known what projects the new owners of the Australia Hall have in mind for the site
The Sunday Times of Malta has obtained a copy of the deal reached last month between the Labour Party and Tamarac Ltd – owned by the proprietors of the furniture business Fino and Chris Gauci from Big-Ben.
It emerges that Labour agreed to sell Australia Hall and its adjacent property, some 6,000 square metres, to a new company called A.H. Development Ltd owned by the same families involved in Tamarac Ltd.
Although the property was sold for €582,343 – a low sum compared to what it would fetch in today’s market – no money has changed hands through this deal. Instead, Labour’s pending debts with the company were paid off.
According to the contract, Labour owed Fino €177,000 for furniture bought in the mid-1990s to furnish the party’s headquarters in Hamrun.
Other debts, amounting to more than €250,000, was also struck off through the deal.
Tamarac Ltd, which had signed two separate promises of sale with Labour in 1995 and 1997 to buy the two properties for €1.5 million, has now agreed to give up one of the properties which it was claiming it had a right to buy.
Labour has also repossessed all the rights over the site of the Raffles Disco – the most expensive of the two properties it owned in St Andrews.
In 2006, Tamarac Ltd instituted legal proceedings against Labour as the party had not honoured its promise of sale agreements on the two properties despite keeping some €250,000 in deposits.
The issue became more complicated in 2010 when the Lands Department, after various warnings, took Labour to court in an attempt to regain the two properties given to the party on a long lease in 1979.
Labour was accused of breach of contract for leaving the properties in a dilapidated state and both the Lands Department and the Attorney General agreed to initiate legal proceedings against it.
However, Labour won the election in March 2013 and in October of that year the government decided to drop the court cases against the party.
At the same time, the lawyers of both Labour and Tamarac Ltd informed the court that the two parties had opened discussions aimed at reaching an out of court settlement.
Since the contract was signed in July, both parties have withdrawn the court cases against each other and said that they are fully satisfied with the deal reached.
It is not yet known what projects the new owners of the Australia Hall have in mind for the site.
The building is scheduled and development in the area is until now restricted.
How the story unfolded
August 7, 1979: Labour government passes parliamentary resolution granting property to PL as compensation for Freedom Press in Marsa.
Property granted on perpetual emphyteusis and consists of three buildings and land in St Andrew’s; a factory in Marsa (currently used to host PL TV station); rent of Maċina in Senglea (used as PL HQ till mid-1990s) and €40,500 in cash.
Early 80s: PL rents part of St Andrews’s property to sons of former Labour minister Joe Grima. Property turned into Raffles Disco.
End of 1980s: Raffles closes down after building is extensively damaged by fire. Australia Hall remains abandoned.
1995: Labour signs promise of sale with Tamarac Company Limited of site for €1 million.
1996: Wallace Fino – co-owner of Tamarac Ltd submits Mepa application to turn ex-Raffles property into child development centre.
1997: Labour government passes parliamentary resolution to barter €549,000 in arrears owed by Labour on St Andrew’s property lease against payment of arrears government owed Labour on former Freedom Press. Government also cedes right to terminate concession to Labour Party for breach of contract.
1997: Labour Party signs promise of sale with Tamarac Company Limited for Australia Hall sale against payment of €600,000.
1997: PN opens case against government challenging resolution – it is later withdrawn.
1998: Labour Party sells part of property to St Michael’s Foundation for €600,000.
1998: Australia Hall suffers substantial damage following fire. Roof totally collapses.
2005: Lawrence Fino on behalf of Tamarac Ltd files Mepa application for Australia Hall and to convert it into a supermarket.
2006: Tamarac Ltd files court case against Labour Party for failing to sign and conclude contracts on the promises of sale on both Raffles and Australia Hall sites.
2009: Lands Department asks Labour Party to restore buildings as per contract obligations or return property back to the government. No action is taken.
2010: Lands Department start legal procedures against Labour leader Joseph Muscat to reclaim ownership of St Andrew’s properties following breach of contract. PL submits counter claim to get back Freedom Press if government ends its contract on St Andrew’s property.
January 2013: Tamarac cases against Labour Party on two promises of sale coming to a close while Lands Department case against party continues.
March 2013: Labour wins election.
May 2013: Tamarac Company Ltd lawyer Ian Refalo and Labour Party lawyer Paul Lia inform court that both parties are close to an out-of-court deal and may withdraw the case.
June 2013: Prof. Refalo tells court no deal has been reached yet with PL as negotiations are still ongoing.
October 2013: Lands Department and Attorney General drop case against Labour Party. On its part, PL drops counter claim on Freedom Press.
November 20, 2013: Court sitting of Tamarac Company Ltd vs PL case. Both parties say they are close to a deal but request more time.
April 2014: Court case resumes – Labour wants six more months to settle issue. Court agrees.
July 2014: Labour and Tamarac settle issue. Labour keeps Raffles – sells Australia Hall against settlement of debts.