The Labour Party is refusing to reveal whether it has paid all the ground rent arrears connected to the properties it acquired from the government in 1979, even though it has already sold one of the properties for just under €600,000.
The party was asked about the arrears following last week’s revelations by The Sunday Times of Malta about a private deal struck in July between the Labour Party and A.H. Developments Ltd for the sale of the Australia Hall in St Andrews and 6,000 square metres of adjacent land.
According to the latest contract, Labour was obliged to pay the Lands Department an annual ground rent of €20,964 for Australia Hall and another €14,209 for the area occupied by the former Raffles disco, which has now returned to the Labour Party as a result of the deal.
In 2010, when the former Nationalist government initiated proceedings against Labour to return the properties, one of the issues was that the PL was not paying ground rents to the government.
However, although the contract signed recently includes details of the annual ground rent due, it does not state anything about any pending arrears and who is responsible for settling them.
A party spokesman refused to reply when asked to declare whether the PL has paid all its pending arrears to the Lands Department on the two properties in St Andrews. He said: “Given that the said journalist claimed access to the contract and published a story, he can get answers from the same source.”
The government also opted not to reply. Asked to give details on the ground rent received from Labour until last July, the Office of the Prime Minister, directly responsible for the Lands Department, failed to answer.
By selling Australia Hall, Labour not only managed to reacquire 4,000 square metres of property (ex-Raffles disco), but also used the deal to settle its debts with the Fino furniture company.
According to a statement of account covering sales 20 years ago (see picture) Labour had acquired tens of thousands of euros worth of furniture from Fino to furnish its new headquarters in Hamrun built in the 1990s. However, the party never settled its bills.
Through the Australia Hall deal, Fino is now getting back its dues as Labour agreed to use this deal to offset outstanding bills with the company.
Back in the 1990s, Labour had signed two separate promises of sale with Tamarac Ltd (owned by Fino and Chris Gauci) for the sale of the two properties in St Andrews.
However, Labour never honoured these agreements and was taken to court.
Following the change of government last year, the Lands Department dropped the case against Labour to take back properties. Instead, Labour has agreed to sell one of the properties to Fino while the latter agreed to drop its rights on the land incorporating the former Raffles disco.