Property developer Marco Gaffarena cannot force the co-owners of a Valletta property to honour a promise of sale agreement, a court ruled on Thursday.

The property, in Old Mint Street, has been at the heart of political controversy since 2015, when The Sunday Times of Malta revealed that the government paid €1.65 million for the share of the property Mr Gaffarena had at the time. 

Mr Gaffarena had bought his share for a fraction of that price just weeks prior to the deal.

The co-owners held the remaining one-fourth undivided share of 36, Old Mint Street, Valletta, corner with St Patrick Street. It was set to be transferred to Mr Gaffarena for €68,134 in terms of a promise of sale signed on October 31, 2014.

But when The Sunday Times of Malta revealed that the property had been targeted by two expropriation orders, issued on January 22 and April 20, 2015, the co-sellers backtracked, refusing to proceed with the sale, which was set to be concluded by end of April 2016.

The court upheld the co-vendors’ argument that they could not be forced to sell property which “no longer belonged to them.”

In March 2018 a court had ruled that the Commissioner for Lands was wrong to only offer compensation to Mr Gaffarena and his wife, when the Old Mint property was jointly owned by a group of people.

"The Commissioner should have compensated each of the owners pro-rata," the court ruled. "The government effectively acquired part of the property belonging to all its owners and only paid one owner for it."

An inquiry into the scandal, conducted by the Auditor General, found “collusion” between Land Department officials, Mark Gaffarena and Planning Parliamentary Secretary Michael Falzon, who subsequently resigned. The prime minister launched a court case seeking to nullify the deal.

The First Hall, Civil Court on Thursday upheld practically all the pleas put forward by the co-owners, declaring that conditions in the promise of sale had come into play, thus releasing the co-vendors from proceeding with the sale.

The words of the promise of sale were “clear, unequivocal and left no room for interpretation,” declared the court, presided over by Madam Justice Lorraine Schembri Orland, referring to one condition whereby the final sale was to be made subject to no expropriation order.

Once the property had been targeted by two expropriation orders, the resolutive clause came into effect.

The court also upheld the co-owners' argument that they could not grant peaceful possession over property that no longer belonged to them and that “they certainly could not be coerced to sell that which they no longer owned.”

Moreover, the share to be transferred had never been precisely determined, the court observed, pointing out that the testimony of the two notaries involved in the transfer had “not at all been precise.”

The court said it found it difficult to believe Mr Gaffarena's testimony that he could not recall whether the share had been specified, whether notarial searches had been completed and whether the documents had been passed on to one of the notaries.

In the light of such evidence, the court rejected the applicants’ request.

Lawyers Peter Caruana Galizia and Eve Borg Costanzi assisted the respondents.