Defendants in hospitals corruption challenge legality of freezing orders rules
Judge will decide on the constitutionality of the law that regulates freezing orders against defendants facing charges on the fraudulent hospitals deal with Vitals Global Healthcare
A judge will decide on the constitutionality of the law that regulates freezing orders in three weeks’ time, after hearing arguments against and on behalf of the defendants accused of corruption in the government’s fraudulent hospitals deal with Vitals Global Healthcare.
The Criminal Court requested the guidance of the First Hall of the Civil Court in its constitutional jurisdiction, after the defendants claimed the procedure to challenge freezing orders breached their rights to fair hearing and enjoyment of property.
The defendants argued that a seven-day timeframe in which such orders could be challenged, breached their right to a fair hearing and enjoyment of property, as well as created inequality of arms between them and the prosecution.
Defence lawyer Edward Gatt decried the “hotpot of injustices against our clients” from laws he insisted breached human rights and the “incorrect and nefarious interpretation” given by the criminal court.
“So the law doesn’t bind the court to give a reason for issuing the order, so what basis am I supposed to contest it on?” the lawyer, asked describing the law as being skewed in favour of the prosecution because of the miniscule seven-day timeframe.
“The time had come in Malta for certain orders, made gratuitously or because of who you happen to be, to carry consequences,” remarked the lawyer, darkly.
Defence lawyer Steven Tonna Lowell said the prosecution had requested €20 million in freezing orders against each of his clients, which implied that they had illicitly received a total of €60 million. Still, the magisterial inquiry had concluded the monies they had allegedly received illegally “had consisted of €12,000 which they had been paid in professional fees by a law firm.”
Tonna Lowell said he had doubts about how this could be construed as money laundering. “If you divide €60 million by €12,000 you get €5,000. So the prosecution is saying that for every euro received in professional fees, it will freeze €5,000.”
Lawyer Vince Galea, who is appearing for former prime minister Joseph Muscat, who stands accused of corruption in the VGH deal, pointed out how British law regulated orders of restraint through ‘reasonable cause’.
Galea said the British AG issues guidelines to prosecutors to avoid this ambiguity, so that “an application for a restraint order shall be supported by a witness statement from a financial investigator.”
“This is not the case in Malta,” he said, and totting up the amounts requested under all freezing orders in the VGH saga totalled €551 million, when the hospitals deal over which the defendants were facing charges had cost the taxpayer €400 million.
Defence lawyer Giannella de Marco said that with some 78 boxes of evidence, it was impossible for lawyers to verify the amount the AG had requested frozen. “Where is the equality of arms? Why is the AG’s declaration given more weight than ours? David Joe Meli, who is 42, is hit with a €32 million freezing order. It is not only more money than what he has, but more than what he will ever have.”
Defence lawyer Shazoo Ghaznavi, who represents the Pakistani businessman Shaukat Ali, said the court’s remedy had to allow the defendant to actually examine the amount frozen. “There must be justification and explanation by the AG as to how the amount was calculated by summoning the experts and asking them questions.”
State Advocate rebuts ‘narrow’ interpretation
In reply to the arguments raised by the plaintiffs, lawyer Julian Farrugia from the Office of the State Advocate, said nobody had addressed the AG’s first line of argument: that a constitutional reference was “not a budget constitutional case”, an issue of potential constitutional nature arising before a court that may lack the jurisdiction to decide.
“The issues raised and arguments made here today are not needed for the Criminal Court to reach a decision about the freezing order,” reminding the court that it had rejected appeals about the requested references. “Irrespective of the answers which this court may give, nothing is holding the Criminal Court back from proceeding with hearing the case.”
“Would it be doing the right thing?” asked the judge as to whether the court would have prejudiced the rights of other parties by raising the matter itself. “No,” Farrugia replied. “But it shows the futility of these proceedings, because the issue being dealt with by the Criminal Court is extremely simple: should these freezing orders be there or not? The timeframes do not breach human rights in and of themselves – they ensure the case is heard speedily, something which happens to be in the interests of the defendants.”
Judge Mark Simiana asked how that could be reconciled with the fact that the Criminal Court itself had said the seven-day period allowed by law did not give it time to hear evidence, “that the appellant so to speak, cannot have recourse to a remedy.”
Farrugia’s reply was surprisingly frank.
“I feel that, unfortunately, certain interpretations by the Criminal Court and certain arguments made today focus on a single section of the law, and don’t take a holistic view of procedural safeguards.
“The Court of Magistrate must uphold the request for a freezing order, according to law. If it is not convinced that the order is necessary, then it must issue a temporary freezing order,” the lawyer said. “The criminal proceedings must begin in order to establish whether the request is justified or not. These are the procedural safeguards.”
He said the amounts frozen could well be reduced by the court as the case went on and evidence emerges that shows such an amount need not remain frozen, he explained.
“Here we have one of the biggest court cases in Maltese history… I am not going to express an opinion on it, but the State does have an interest in its outcome. If through the actions of these individuals, damage had been caused, then they must answer for it. The amounts frozen are not the issue.”
Lawyer Miguel De Gabriele, also representing the State Advocate added that the plaintiffs were contesting the merits of the freezing order before a court that is not empowered to examine the evidence exhibited before the Court of Magistrates.
“This court should not be examining the reasoning of the Criminal Court, it should examine whether the law as it stands, breaches human rights. If they are frustrated by the fact that the courts of Criminal jurisdiction did not agree with their arguments, they should not come here to give voice to them. This court is not hearing an appeal to another court’s decision on an appeal.”
The case was adjourned for a decision on the Constitutional reference to July 25.
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