The government decided to drop a Land Department case against the Labour Party to take back the Australia Hall property in Pembroke on the Attorney General’s advice, according to Parliamentary Secretary Michael Farrugia.
The historic hall and adjacent property in Pembroke had been granted to the Labour Party in the 1970s by the Mintoff administration as compensation for the party-owned Freedom Press property in Marsa which was requisitioned at the time and eventually used for the development of Malta Shipbuilding – which was privatised in 2009.
However, in 2010 the Land Department took the PL to court in a bid to take the property back after the party failed to keep the hall and former Raffles Disco in good condition, as stipulated by a 1979 contract, despite several warnings.
The move has been described by the Opposition as an abuse of power, and a way for the government to hand a gift to itself now that it is in power.
Speaking to The Sunday Times of Malta, Dr Farrugia, who is responsible for the Land Department, said the decision was taken after the government sought the advice of the Attorney General on the matter and was told that though the Land Department was legally right to seek the Australia Hall property back from Labour, the party also had a solid case to seek the return of the Freedom Press property.
The expropriation contract that Labour had signed back in the 1970s stipulated that the land was being taken for the purposes of a shipbuilding facility.
“The moment the shipbuilding closed down, the contract was breached and the property should have been passed back to the Labour party,” Dr Farrugia said.
The moment the shipbuilding closed down, the contract was breached
Instead of waiting for the respective parties to win their case, the government instead intervened to resolve the matter and keep everything as it is, Dr Farrugia said, arguing that the property in Marsa was worth far more than that in Pembroke.
When it was put to him that the government should have refrained from interfering in this case, given its conflict of interest, Dr Farrugia said that allowing the court cases to run their natural course would have interfered with the government’s plans to turn the former ship building site into a maritime hub.
To this end, the privatisation unit is currently in the process of evaluating some 28 international expressions of interest that were received in August with proposals to redevelop part or all of the 175,000 square metre site.
But the Opposition has been asking for the government’s decision for the case to be dropped to be scrutinised by Parliament’s Public Accounts Committee. Dr Farrugia said he welcomed this prospect, adding that an official from the Court Registry would be giving evidence in connection with the contracts for both properties at the PAC last week.
The Nationalist Party has been ratcheting up the pressure on the issue. On Friday, members of PN’s youth section wrapped the building like a gift in a symbolic act of protest at the move.
MZPN president Kevin Plumpton said during the activity that this was a scandal as the government should have allowed the court to decide on the case.
But the Labour Party reacted to the stunt arguing that the decision of the former administration to try and seize the property from the party was an act of political vindictiveness.