Entrepreneur Marco Gaffarena had difficulty recalling under oath whether he knew, when agreeing to buy one-fourth of the Old Mint Street property for €139,762, that the government had already offered him €822,500 for an equal portion of the same property.

This fact came to the fore when Mr Gaffarena himself took the witness stand under cross-examination in a case he instituted two years ago, together with his wife Josielle, to force the Cefai family, co-owners of the disputed share of property at 36, Old Mint Street, Valletta, to honour the promise of sale agreement in his regard.

In 2015, the Times of Malta had revealed that the government paid €1.65 million to Mr Gaffarena for part-ownership of the Valletta property, which he had bought for a fraction of that price just weeks prior to the deal. 

“When you signed the promise of sale with Cefai were you aware that the government had already expropriated the property?” asked Tanya Sciberras, one of the lawyers assisting the respondents in the suit before the First Hall, Civil Court.

Read: Gaffarena expropriation deals struck down by courts

“I don’t know. I cannot tell you yes or no because I don’t recall dates,” came the reply from the applicant who had started off by stating that he had been involved in the construction industry since his teenage years.

“Do you recall signing a deed of exchange (permuta) with the government?” Dr Sciberras continued.

“I did sign contracts with the government. I don’t remember dates but if shown the deeds I’ll tell you yes or no. It’s all black on white” Mr Gaffarena insisted.

“When you signed the promise of sale with these people, did you know that the government had already acquired one-fourth of the property?” Mr Justice Mark Chetcuti asked, intervening in the line of questioning.

“It was mine. I gave it to the government. I sold the share I had acquired from Galea to the government,” Mr Gaffarena replied, adding that he had signed the deal with the government after receiving a call to that effect.

Earlier on in the sitting, Mr Gaffarena explained how he had acquired the first one-fourth undivided share of the Old Mint Street property from Louis Galea, an old acquaintance and former Daewoo employee with the Gaffarena family.

It was this Mr Galea himself who had approached Marco Gaffarena with an offer to sell his one-fourth share in the property, the witness explained.

Sometime in 2015, Mr Gaffarena had purchased a second undivided fourth of the same property from a certain “Tonio”, whose surname he could not recall, prompting Dr Sciberras to point out that it was “Mercieca”.

On March 26, Mr Gaffarena had signed a promise of sale agreement with the Cefai family, to purchase a third part of the Old Mint Street property at the agreed price of €139,762, when three months earlier, in January 2015, he had transferred a fourth of the property to the government for €822,500.

A second one-fourth undivided share was transferred to the government at equal value after Mr Gaffarena had signed the preliminary agreement with the Cefai family.

The expropriation deal was subsequently investigated by the National Audit Office, which found there had been “collusion” between the Land Department, Mr Gaffarena and former planning parliamentary secretary Michael Falzon, who eventually resigned.

The Auditor General also concluded that government officials had been “secretly cooperating to the detriment of the other property co-owners”.

Asked whether he had first approached the Cefai family with an offer to purchase, Mr Gaffarena strongly denied, insisting that it had always been one of the Cefai siblings who had called him and acted as go-between with the other members of his family.

As for the price, Mr Gaffarena confirmed that his offer had matched the price paid for the earlier-acquired shares.

Reverting back to the preliminary agreement with the Cefai family, Dr Sciberras pointed out that Mr Gaffarena’s notary had drawn up all searches and relative documentation.

“Didn’t you draw the notary’s attention to the fact that government had already expropriated the one-fourth share?” Dr Sciberras asked, questioning further the relevance of the clause ‘not subject to expropriation’ inserted in the deed.

“I don’t have to tell the notary anything,” Mr Gaffarena replied, his lawyer Keith Bonnici intervening to ask whether the cross-examining counsel was implying that his client had fallen short of any obligation to disclose information.

Asked whether he knew of the €822,500 value of each expropriated share when signing the preliminary agreement with the Cefai family, Mr Gaffarena declared that he knew that value when signing the deed with the government.

“You agreed to €139,762 when three months earlier you had agreed to an expropriation for €822,000. You thought of no consequences? Did you not think about problems with the tax authorities?” intervened the Judge.

“I will pay if need be,” was the final reply.

The case continues in October.

Lawyer Reuben Balzan was also counsel to the respondents.