BICAL • November 92003

The Excelsior saga continued – Cecil Pace shown no mercy

BICAL shareholders’ thirst for justice did little to reverse the tide against the Pace family when the Nationalist government was elected in 1987. It seemed that at the end of the day, a business empire ripped apart, doors were being closed shut in Cecil Pace’s face.

Following the 1987 election, Finance Minister George Bonello Dupuis chose to assist Cecil Pace in his fight for the shares to the Excelsior Hotel, property of the Malta and Europe Hotels Ltd (M&E). Both Cecil Pace and Italian lawyer Michele Martone had laid claims to the shares of the hotel, which had been the property of Italian entrepreneurs Antonio Ghidoli and his wife Nada delle Piane.
Bonello Dupuis offered to have lawyer Dr Tonio Farrugia draw up a report on the actual shareholding of M&E, to commence an "informal fact-finding mission" into the real ownership of the shares. In 1988, Cecil Pace is already in possession of share transfer documents, signed by both Martone – who was a lawyer acting on behalf of the Ghidolis back in the ‘70s – and his lawyer Albert Ganado. The documentation is clear – Ghidoli had sold his shares to Pace. But Martone contests, and claims the shares were sold to him in 1974 when Pace was taken into custody following the suspension of the BICAL licence. A total of Lm1 million is at stake.
The 1988 Farrugia report however concludes that the shares belong to Martone. Farrugia had made no contact with Cecil Pace, and instead chooses to have a sojourn in Rome for his exchange with Martone. The outcome is a clear case of biased information.
But despite the report having been commissioned as an "informal fact-finding mission," the shares are surprisingly registered in Martone’s name. Cecil Pace, starting out with Bonello Dupuis’s assistance, is regaled with a severe blow – Martone’s name is registered as the rightful owner of the Excelsior shares without ever having been party to the "informal" investigations.
In 1989, Cecil Pace commences legal action against controller Emanuel Bonello on grounds of having registered the shares in Martone’s name. The Italian’s lawyer Giovanni Bonello is present since day one of the first Court sitting. Cecil Pace asks the Court to decree that the shares belong to him and to register them with M&E, and hold the controller responsible for damages. Pace also issues three precautionary warrants against Emanuel Bonello, one of them for an impediment of departure from the island. The presiding judge demands that 10 per cent of the money at stake (Lm1 million) is deposited by Pace within a week, to ensure a guarantee of payment of damages to Emanuel Bonello if Pace loses his case, or else the warrant is dropped.
By the start of 1990, the defendants are arguing that Martone be called to testify in the case, although Pace’s lawyer argues that their action is not against Martone but against controller Emanuel Bonello, since it was he who registered the shares in Martone’s name.
Whilst Pace’s case is kept pending over disagreement about whether Martone should be allowed to testify in the case or not, Michele Martone starts his offensive. He transfers his shares to his son Massimiliano and commences legal action against Pace through his nominee, Herbert Baldacchino, in 1993. Pace’s case is kept pending, and in 1997, Martone’s case awaits sentencing.
The evidence is clear. Pace’s share transfer documents have both been signed by Martone and his lawyer Albert Ganado. They are two facsimiles of the same documents, signed by both lawyers. But Martone’s copy, written in his handwriting, now carries an extra five words, amended without any witnesses or signatures by the parties involved. Martone’s amendment disfigures the legality of the share document by making it seem that this is bound by the regulations of a contract – the amendment cites that if Pace defaults a number of payments on the money owing to Ghidoli (the share transfer was part deposit and part instalments), the ‘contract’ would be null.
But this is no hire purchase agreement, and the rules for share transfers are different. And Martone’s amendment carries no signatures from witnesses representing the parties involved. The evidence seems clear enough. The share documents do not tally. Martone is interrogated by the Police for forgery, but nothing results and he is allowed to leave the island. He is called back by the Magistrate’s Court, now presided by Magistrate Carol Peralta, for the final sentence.
During the winding up of the case, Martone is represented by a new lawyer – Mario de Marco, son of then Foreign Minister Guido de Marco (now President of the Republic) – who by trade is a civil lawyer, and not a criminal lawyer. De Marco presents his case, arguing that if Pace’s accusations of forgery are indeed correct, it should be the controller to bring the case forward, since he is the exclusive controller of the company which Pace claims is the proprietary undertaking of the shares (MIDC, the holding company of M&E).
Peralta decides in favour of de Marco’s motion. Emanuel Bonello accepts to commence proceedings, but at the eleventh hour, when Peralta calls for both Bonello and his lawyer Ian Refalo to take the stand and present their evidence, both Bonello and Refalo are nowhere to be seen. Pace says the evidence had already been presented with the presentation of the forged facsimile of the share document when he had accused Martone of forgery. But Peralta demands to have Bonello present the evidence, and with the controller nowhere in sight, Peralta dismisses the case for lack of evidence.
Pace appeals the ruling, and asks the Attorney General to consider the case, but the AG claims there is not enough evidence to support the appeal. How could two facsimiles of the share transfer document signed by Martone and Albert Ganado, confirming the transfer of shares from Ghidoli to Pace, and with Martone’s copy carrying an amendment that bears no signature, not be considered as sufficient evidence of forgery?
Pace is baffled, and he has every right to appeal the ruling since as shareholder to the controlled BICAL companies, he retains the right to intervene where there is mismanagement by the controller. The Attorney General does not accept, and the appeal is declared frivolous and vexatious by Judge Caruana Colombo.
When, once again, both parties meet in Court to hear the final ruling on Martone’s case instituted against the controller, it is Judge Noel Arrigo who is presiding. Court expert Tony Mallia is of the opinion that the shares belong to Martone, making Pace’s claim invalid, but that there is not sufficient evidence to take criminal proceedings against Pace as requested by Martone.
Arrigo does not agree fully with Mallia. He says the law stipulates that once shares have been registered in somebody’s name, the Court cannot declare otherwise. However he also accepts that such ruling does not prejudice Pace’s pending 1989 case against the controller calling for those shares be declared property of MIDC, which allows Pace’s case against the controller to continue.
Both Martone and Pace appeal the judgement. Pace appeals on Arrigo’s acceptance that the shares were registered in Martone’s name, whilst Martone (through nominee Baldacchino) appeals on having Pace proceed with his 1989 case.
The Appeals Court decides in favour of Tony Mallia’s original opinion.
Ghidoli confirms – "I sold the shares to Cecil Pace"
In 2002, Cecil Pace is asking for a re-trial. He gets proof that Ghidoli had sold him the Excelsior shares (Malta and Europe Co Ltd), in a Court declaration signed by Nada delle Piani and her son, Alessandro Ghidoli:
"Together with my husband, we were principle shareholders in Malta & Europe Hotels Ltd which built from the 1960s onwards, the Grand Hotel Excelsior in Floriana, Malta; that during the construction of the hotel, more funds were needed and so we took recourse to Mr Cecil Pace personally and through BICAL bank and Finindustry Ltd, who provided the necessary request; that in consequence to such, and the impossibility of covering such finance, my husband and I sold all our shares to Mr Cecil Pace through one of his companies, after having then conceded the Grand Hotel Excelsior to the company Pabros Ltd.
"That my husband and myself sold and to that effect signed the documents of transfer of all shares to Mr Cecil Pace; that the hotel was operational and welcomed guests up to end 1972; that after a month of operation the BICAL bank collapsed; that Mr Michele Martone was the lawyer of certain creditors… and that Mr Martone attempted to pressure my husband to pay his debts [due to Martone’s clients]; that our lawyer in Malta was Dr Joseph Maria Camilleri; having already sold all our shares to Mr Cecil Pace I always refused the requests of Mr Michele Martone to sell our shares to him as well; in any case we received no correspondence, payment or compensation from the same Mr Martone, or whoever represented him, to have these shares.
"I reconfirm that the shares, as described above, were ceded to a company owned by Cecil Pace."