Michela Spiteri (‘Favouring the law’s delay’, The Sunday Times of Malta, March 22) hit the nail on the head when proposing ‘cosmetic changes’ in court procedures. I refer to her proposal that the original court file should never leave the judge’s chambers especially in view of the risk of interested parties ‘losing’ or destroying a document or two.

I support her recommendation based on experience, which had dire consequences as I contend that the disappearance of documents from the court files of a case against Mid-Med Bank – which HSBC Bank Malta inherited – may have contributed to a miscarriage of justice.

The court case was instituted in 1991 by ex-Mid-Med employees who resigned before the Mid-Med Staff Pension Fund was liquidated in December 1987. I refer to this as ‘case one’ as another group of ex-Mid-Med staff members later instituted court proceedings (case two, in which I am a plaintiff) for similar reasons – but this latter case was kept in abeyance until case one was decided.

The essence of both cases was that plaintiffs felt aggrieved that they were excluded from sharing in the distribution of moneys when the fund was liquidated. The fund was set up during my term as Mid-Med’s first general manager (1975-1980). So I was aware of the reasons for and ramifications involved in the setting up of the fund. I was also at the forefront of the talks between Barclays Bank and government leading to the setting up of Mid-Med Bank on October 1, 1975. Barclays Malta staff were transferred to Mid-Med Bank with much lower salaries as these were aligned with the civil service salary structure.

This salary reduction – in my case by 40 per cent – was a crucial argument that persuaded government to allow Mid-Med Bank to set up a private staff pension fund at a time when government policy was totally against private pensions.

All the legal formalities to set up the fund had not been completed by October 1, 1975. These dragged on until early 1979. However, as from day one of Mid-Med’s existence the bank put aside annually in an ac­count in its name with the Central Bank an amount calculated on an actuarial basis in accordance with advice from a reputable firm of London-based actuaries. As soon as the fund was legally set up, arrange­ments were made with the Central Bank for the accumulated balance to be switched from Mid-Med Bank to that of the Mid-Med Bank Staff Pension Fund Association.

This is the crux of the matter, and why something needs to be done to stop the existing lax court procedures whereby documents on file can so easily disappear. Regrettably, this is exactly what happened in case one.

Various important documents disappeared from the court’s case file. One of these was a letter from the Central Bank dated February 23, 1979 (addressed to Mid-Med) stating categorically that “Lm945,866.48,3 had been transferred from ‘Mid-Med Bank Ltd – Provision for Staff Pension Fund Account’ to ‘Mid-Med Staff Pension Association Account”. Thus the accumulated provision no longer featured in Mid-Med’s balance sheet as the accumulated funds became an asset of the Mid-Med Staff Pension Fund which represented all the staff in employment.

Other documents that went missing were a copy of Mid-Med’s audited accounts and copies of the notarial deeds setting up the staff pension fund

Other documents that went missing were a copy of Mid-Med’s audited accounts (which, clearly, excluded the accumulated balance on the staff pension fund) and even copies of the notarial deeds setting up the staff pension fund. These deeds included provisions to the effect that Mid-Med no longer had any vested interest in funds transferred annually to the Mid-Med Staff Pension Fund and also stipulated that whatever amendments to the pension fund rules that the bank might later make – and I quote from the relevant deed – “could not result in the return of any moneys to the bank”.

Notwithstanding this condition and the irrefutable evidence in the Central Bank’s letter quoted above, in 1987 the then government and Mid-Med’s board concocted a very novel way of saving the government nearly Lm1.5 million (€3.45m) that was needed to render government’s then 100 per cent shareholding fully paid up before making a public share issue.

This was a clear case of connivance between the government and the Mid-Med board who persuaded the then staff members, together with the unions representing them, to accept a distribution of about Lm3.5 million from the balance of Lm5 million then standing on the Mid-Med Staff Pension Fund Association’s account with the Central Bank. Mid-Med unlawfully clawed back Lm1.45 million so as to make all Mid-Med’s shares fully paid.

This was to the detriment of ex-Mid-Med employees who should have been allocated their fair share of the €5 million accumulated on the staff pension fund at the time of liquidation. Regrettably the fund trustees gave their consent to this shameful act whereby ex-Mid-Med employees were denied their legitimate rights.

Case one was decided against plaintiffs both in the first instance and even on appeal. However, it transpired – unfortunately only when case two was revived and I was called to testify – that the Central Bank’s letter and other documents mentioned above had disappeared from the court files.

Of course, the exact date of their removal could not be established and one cannot say to what extent the decision of the courts could have been influenced had the judges concerned had sight of such vital evidence, more so as both Mid-Med, and their successors HSBC Bank Malta, contended that the accumulated balance on the staff pension fund remained under the bank’s control. The Central Bank’s letter showed this was certainly not the case and so did Mid-Med’s audited accounts, as also copies of the notarial deeds.

When case two was revived and started to be heard under a different judge I was given the opportunity to testify. In referring to documents that have been presented in court in the course of the proceedings of case one it transpired that the Central Bank’s letter and other vital documents had been ‘lost’, thus weakening the ex-Mid-Med employees’ contention that the bank was not entitled to take back no less than 30 per cent of the total payments the bank had made to the pension fund between October 1, 1975, and December 31, 1987.

Naturally, in his representations to the court regarding case two the lawyer representing all plaintiffs resubmitted the missing documents, and in my testimony, relevant quotes from these documents were duly recorded.

Anthony Curmi is a former bank chief executive.