The Government has intervened to reopen negotiations between the Labour Party and a private company over a multi-million euro property in St Andrew’s, The Sunday Times of Malta has learnt.
The Government’s decision to withdraw the case instituted by the Land Department against Labour in 2010 in connection with Australia Hall may lead to a breakthrough in ongoing negotiations with the buyers.
Documents seen by this newspaper show that Labour had signed two promise of sale agreements over the disputed property in 1995 and 1997 with Tamarac Ltd – a company owned by the Fino Group and Chris Gauci of Big Ben – for the sum of €1.5 million.
Despite being paid tens of thousands of euros in deposits, the Labour Party never concluded the contracts as required by law, forcing Tamarac Ltd to take the party to court in 2006.
The value of the property has now more than tripled since Jimmy Magro – then Labour’s general secretary – concluded the deals. Sources close to Tamarac Ltd told this newspaper that Labour now wants to withdraw from the deal to be able to make a bigger profit.
The only hurdle blocking a final settlement between Labour and Tamarac Ltd is a court case instituted in 2010 by the Land Department against party leader Joseph Muscat, to reclaim ownership of the St Andrew’s property after Labour allegedly breached the contract by leaving it in a dilapidated state.
However, since Labour was elected last March, the scenario has changed.
Negotiations on Hall
Last May, Tamarac’s lawyer, Prof. Ian Refalo, informed the court, for the first time since the start of procedures in 2006, that out-of-court negotiations were under way with Labour over a possible withdrawal of the case.
While Prof. Refalo and Labour’s lawyer Paul Lia confirmed that negotiations were still ongoing, last month the Commissioner for Lands and the Attorney General officially submitted in court a declaration withdrawing their case against the Labour Party over the disputed property.
Without giving any details, the Land Department said there was an agreement between the Labour Government and the Labour Party.
The Commissioner of Lands and the Attorney General fall under the political responsibility of two parliamentary secretaries, Michael Farrugia and Owen Bonnici, who are both attached to the Office of the Prime Minister.
As compensation, Labour dropped its counterclaim on taking back possession of the former Freedom Press in Marsa, which was originally swapped with the St Andrew’s property.
This latest development opens the way for another out of court settlement between Tamarac Company Ltd and the Labour Party on the prime parcel of land. The next sitting of this case is scheduled to take place this week.
The Nationalist Party has already accused Labour of abuse of power on this issue, saying the Prime Minister took the decision to interfere in the course of justice to give an advantage to the Labour Party.
PN deputy leader Beppe Fenech Adami described the move as a €10m gift to the Labour Party.
Labour dismissed these claims, stating that the court case initiated in 2010 by a Nationalist-led administration was vindictive.
Dispute timeline
August 1979: Labour government passes a parliamentary resolution granting property to Labour Party as compensation for Freedom Press in Marsa. Property consists of three buildings and land in St Andrew’s; a factory in Marsa (currently used to host One TV station); rent of Maċina in Senglea (used as PL HQ till mid-1990s) and €40,500 in cash.
Early 1980s: Labour Party rents part of St Andrew’s property to sons of former Labour Minister Joe Grima. Property turned into Raffles Disco.
End of 1980s: Raffles Disco closes down after building is extensively damaged by fire. Australia Hall remains abandoned.
1994: Developer Carmelo Penza files application to develop former Raffles site into business and pleasure centre. Application withdrawn later by developer.
1995: Labour Party signs promise of sale with Tamarac Company Limited for the sale of Raffles site against payment of Lm412,000 (€1 million).
1996: Wallace Fino, co-owner of Tamarac Ltd, submits Mepa application to turn ex-Raffles property into child development centre.
1997: Labour Government passes a resolution in Parliament to barter Lm230,000 (€549,000) in arrears owed by Labour on St Andrew’s property lease against payment of arrears government owed Labour on former Freedom Press. Government also cedes right to terminate concession to Labour Party for breach of contract.
1997: Labour Party signs promise of sale with Tamarac Company Limited for the sale of the Australia Hall against payment of Lm250,000 (€600,000)
1997: PN opens case against government challenging its parliamentary resolution in favour of Labour Party. It is later withdrawn.
1998: Labour Party sells part of its St Andrew’s property to St Michael’s Foundation for €600,000.
1998: Australia Hall suffers substantial damage following fire. Roof totally collapses.
2005: Lawrence Fino on behalf of Tamarac Ltd files Mepa application for the restoration of Australia Hall and to convert it into a supermarket.
2006: Tamarac Ltd files court case against Labour Party for failing to sign and conclude contracts on the promises of sale on both Raffles and Australia Hall sites.
2009: Lands Department asks Labour Party to restore buildings as per contract obligations or return property to the Government. No action is taken by Labour.
2010: Lands Department starts legal procedures against leader Joseph Muscat on behalf of Labour Party to reclaim ownership of St Andrew’s properties following breach of contract. Labour submits counter claim to get back Freedom Press if the government ends its contract on St Andrew’s property.
January 2013: Tamarac cases against Labour Party on two promises of sale coming to a close while Lands Department case against party continues.
March 2013: Labour wins election.
May 2013: Tamarac Company Ltd lawyer Ian Refalo and Labour Party lawyer Paul Lia inform court that both parties are close to an out of court deal and may be withdrawing the case.
June 2013: Tamarac Ltd tells court that no deal has been reached yet with Labour as negotiations are still ongoing.
October 2013: Lands Department and Attorney General drop case against Joseph Muscat on behalf of Labour Party. On its part, Labour Party drops counter claim on Freedom Press.
November 20, 2013: Next court sitting of Tamarac Company Ltd vs Labour Party case.