Land Authority’s failure to defend itself risks reversal of court judgement on Gaffarena scandal

The court’s decision to annul the exchange of property in the Gaffarena deal could be reversed at appeal stage because of the Land Authority’s failure to defend itself in the case, lawyers told The Shift News.

A number of lawyers said that since the Land Authority did not appear in court instead of the now defunct Lands Commissioner, who oversaw the deal, this could lead to the reversal of the judgment at appeal stage.

Another ambiguity arises from the fact that Prime Minister Joseph Muscat, in his capacity as an MP, sued a government department which fell under his responsibility.

The scandal was revealed by The Shift News journalist Caroline Muscat who at the time was a senior journalist for The Times of Malta in 2015. The government had paid €1.65 million for part ownership of the Valletta property that Gaffarena had bought for a fraction of the price just weeks earlier.

The investigation stopped the transfer of millions more and protected the families owning the property from further exploitation. Gaffarena had acquired parcels of land as part of the deal equivalent to the size of more than 10 football pitches –  the total estimate of the deal that at that point had managed to go through was €3.4 million, in cash and parcels of land, to the Gaffarenas.

Parliamentary Secretary Michael Falzon was forced to resign after a report by the National Audit Office (NAO) concluded there was collusion between government officials and Gaffarena.

The court concluded that the government had acquired part of the building which is owned by all owners but only compensated one owner so it deemed the contracts invalid. This is in line with conclusions in the NAO report that compensation should have been proportionally paid to all the co-owners.

Two contracts were struck down by court which included a 6,000 square metre parcel of land in Ta’ Kandja, Siġġiewi, which was overvalued by €615,000, and another parcel of land in Naxxar, measuring 5,000 square metres which was overvalued by €467,000. This land should be returned back to the public unless the court’s decision is reversed at the appeal stage.

The six government properties and parcels of land which Gaffarena got in exchange for part of a building in Valletta were overvalued by €1.8 million, the court confirmed in its judgement.