Gaffarena loses court battle to buy third part of Old Mint Street building

A scandalous deal on a Valletta property involving developer Mark Gaffarena revealed by the press in 2015 has finally led to justice for one of the families involved.

A court ruled that the owners of a quarter of a property in Old Mint Street, Valletta were not obliged to honour a promise-of-sale with developer Mark Gaffarena because they were unaware that he had already sold half of the area to the government as part of an expropriation deal.

The story dates back to 2015, when the expropriation deal was exposed by The Shift founder Caroline Muscat, then a journalist with The Times of Malta, which involved the government paying a total of €1.65 million for half ownership of 445 square metres. In less than two months, Gaffarena made a profit of €685,000 from two-quarters of the Valletta property and he was given parcels of land in exchange measuring more than 10 football pitches in total. The parcels of land given to Gaffarena were strategic to his business interests.

Following the publication of the investigation in the press, the family (heirs of the late Mary Falzon) that had entered into a promise-of-sale agreement with Gaffarena for the sale of their share of the property then refused to finalise the agreement. Gaffarena and his wife, Josielle, then filed a court case demanding the family signs off on the agreement signed on 26 March 2015 – only two months before press reports had revealed the scandal.

The family argued that Gaffarenas had colluded with officials from both the Lands Department and the parliamentary secretariat responsible for the land to be expropriated before and after the promise of sale was signed, confirmed by an investigation of the National Audit Office. This was done in such a way to irregularly expropriate the entire property in bits and pieces.

Judge Mark Chetcuti ruled in favour of the family, noting that the promise-of-sale for that particular quarter of the property, which was being rented out to the government, included conditions that it could not be subject to a requisition order, enforcement order or expropriation order.

The expropriation orders were still active on the half of the property and it was only in their submissions to the court that the Gaffarenas stated they were ready to purchase the quarter irrespective of the title and without the owners suffering any consequences, Judge Chetcuti said.

The court noted that Gaffarena had bought a quarter of the property in 2005 and another in 2015. These were expropriated by the government in the span of a week and Gaffarena was also given land in exchange.

The press investigation that revealed the deal had led to a court case by the Prime Minister against the Gaffarenas to return the public land he was given in the deal. The case was won. The court noted that had nullified the contract between Gaffarena and the government. However, the expropriation had not yet been revoked.

Judge Chetcuti pointed out that he found it very surprising that Gaffarena stated he could not remember whether the promise-of-sale, which was signed on March 26, 2015, took place before or after the expropriation. “It is quite surprising how someone involved in property development does not remember the sequence of events related to a building which he had bought part of”.

In his judgment, Judge Chetcuti said he was going to base himself on the premise that the family had a good reason not to sign the contract.

The court said the Gaffarenas were aware of, at least, one expropriation, and throughout the case, insisted that the sale goes through even though they were fully aware that this was not possible.

After the scandal was revealed in 2015, the Auditor General carried out an investigation, which revealed “collusion” between Land Department officials, Gaffarena and then Planning Parliamentary Secretary Michael Falzon who has since resigned. He was re-elected in 2017.

Earlier this year, Gaffarena was developing a block of apartments on a site in Manuel Dimech in Sliema, which another court had ordered to be returned to the government as it was one of a series of properties found to have been illegally bartered in the expropriation deal.

Lawyer Tanya Sciberras Camilleri represented the family in the case.


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