A former notary has successfully appealed a two-year prison term and a lifetime interdiction for allegedly meddling with figures on a public contract which meant that his clients’ credit was not adequately guaranteed.

Pierre Falzon, the 61-year old notary who voluntarily renounced his warrant in 2012, had been found guilty of making a false declaration on a constitution of debt contract and registering the ensuing hypothec for a lesser amount.

The case dates to October 2007 when Falzon drew up a promise of sale agreement over the purchase of one-half undivided share of two properties at Swieqi and Cospicua for Lm38,000 (€88,500). 

The Cassar spouses, as purchasers, subsequently renounced the Cospicua property but did not claim back part of the deposit money, choosing instead to place it on account of the Lm19,500 (€45,500) purchase price due on the final deed. 

Once their notary had assured them that relative searches were in order, the couple began to hand out money to the seller - a building contractor - to cover expenses in finishing the Swieqi property that consisted of a maisonette and garage. 

The purchasers ended up paying the full purchase price agreed upon on the promise of sale. 

For this reason, they instructed Falzon to draw up a constitution of debt and register the relative hypothec securing their rights against the seller. 

That deed was signed on September 28, 2007. 

But they later discovered that the property was targeted for judicial sale by auction and worse still, that the hypothec had been registered for ‘Lm3,506’ rather than ‘Lm35,000.’

On the constitution of debt, ‘Lm3,506’ was pencilled in at a later stage, while the figure in words read ‘Lm35,000.’ 

The Cassars later claimed that their notary had ‘urged’ them to sign papers whereby they effectively renounced their hypothecary rights in favour of third parties, and so ended up getting only a small fraction of their money back.

They filed a complaint against Falzon who was prosecuted, landing the jail term and perpetual interdiction upon conviction in 2018.

When the case moved to appeal, the accused argued that once the parties on the deed had agreed that the amount owed was Lm35,000, additional hypothecs could be registered to cover the capped value “if necessary.”

Moreover, why did the purchasers insist on the constitution of debt when the amount was secured by the promise of sale agreement itself, argued Falzon. 

When delivering judgment Mr Justice Giovanni Grixti, noted that nowhere in the constitution of debt was there reference to expenses but only that the amount referred to the “price paid for property on a promise of sale between the parties”.

That debt agreement was signed in 2005, while the relative hypothec was registered two years later, meaning that the creditors had signed a blank document as far as the date was concerned, he added.

Following the judicial sale of the Swieqi property, a second constitution of debt was signed between the parties in 2008 for the amount of €81,530, equivalent to Lm35,000.

The Magistrates’ Court had given a “precise interpretation” of the law when saying that as a public officer the notary was bound to register the hypothec within 15 days and to declare the correct amount. 

The function of the court of appeal was not to judge the case afresh but to determine whether the first court could “reasonably and legally” reach its conclusion.

And after doing so, a lurking doubt remained in this case, said Mr Justice Grixti. 

'No evidence of expenses'

Cassar, a businessman, had put forward no evidence of expenses he claimed to have paid to the contractor, no architects or contractors were brought to testify, no receipts for works were produced and nor was there proof as to how such payments were made. 

When all was considered, the court was not convinced that everything had happened in the way the purchaser claimed.

If Cassar had already paid the full purchase price, why did he hand over an additional Lm15,500 (€36,100) for expenses when he was not bound to do so?

The promise of sale had been pending “for years,” observed the court, questioning whether this was actually a joint business venture between the parties to sell the finished property. 

Such issues could not have gone unconsidered by the first court, since they cast “serious doubts” upon the evidence put forward by the prosecution, said Mr Justice Grixti.

There were “more than reasonable doubts” which the first court ought to have considered in favour of the accused and thus it could not have reasonably reached that conclusion.

Even if the first court made a “correct and learned evaluation of the law,” the evidence showed that “all was not as claimed” by the alleged victim, said the court, upholding Falzon’s appeal and quashing his conviction.

Lawyers Michael Sciriha, Franco Galea and Matthew Xuereb were defence counsel.