BICAL • November 16 2003

Cecil Pace battles to save the Excelsior hotel

In this exclusive report on the final push to award Cecil Pace a re-trial following the presentation of fresh new evidence which proves the Excelsior shares were sold to him, MaltaToday asks whether controller Robert Gatt is ready to pay Lm30,000 from the BICAL assets up front in order to be able to commence new legal action.

The extensive wealth of the BICAL assets were enough to enable former controller Emanuel Bonello (1984-2002) to pay out the grand total of an alleged Lm1.8 million in handsome emoluments for his role as controller of the BICAL bank and its associated companies.
Now, in two weeks time, Cecil Pace could finally have the opportunity to commence a re-trial of the Excelsior case, through the fresh evidence given in a declaration by former owner and shareholder Nada delle Piane Ghidoli, who confirms she sold the Malta & Europe Hotels (M&E) shares to Pace. The declarations, along with her son’s, prove to be a strong base for a secure and irrefutable case of righting wrong: Ghidoli confirms… "I sold my shares to Pace."
But Cecil Pace faces an insurmountable obstacle: in order to commence proceedings for a re-trial, he needs Lm30,000 for court expenses and as a form of guarantee for liabilities he may incur should he lose the case. Cecil Pace has already told the Court he is in no financial state to provide such an amount, having been stripped of all his wealth following the BICAL closure in 1972. He has also told the Court that he has a good chance of winning a re-trial following the evidence provided by Nada delle Piane Ghidoli.
However, Cecil Pace’s request for a benefit which can exempt him from paying the guarantee of Lm30,000 up front has been refused by the Court of Appeal presided by Judges Giannino Caruana Demajo, Raymond Pace and David Scicluna.
Only one person can secure the funds needed for a re-trial, in full moral conviction of his duties and obligations towards the BICAL assets: Robert Gatt, the current BICAL controller.
Robert Gatt’s obligations
"As controller, Robert Gatt has to safeguard the BICAL assets and the interests of its creditors and depositors," Malcolm Pace, lawyer to Cecil Pace, argues. "This means that he should to intervene in order to safeguard the Excelsior Hotel, which is property of M&E, of which MIDC (a BICAL associated company in the hands of controller Robert Gatt) is the holding company.
"Cecil Pace has fresh, new and irrefutable evidence from the vendors that they sold the shares of M&E to him. The Court of Appeal has refused Cecil Pace the possibility of paying for expenses and damages after the re-trial, and if Pace does not pay the Lm30,000 up front, this re-trial will not proceed and the new evidence will never be presented.
"So it should be controller Robert Gatt, whose obligations by law are to safeguard the BICAL assets, to front the Lm30,000. There are two weeks left to present the money. What could stop the controller from providing the money needed to secure a Lm1 million investment which is currently under his control? If previous controllers usurped so much funds to pay themselves wages and fees, why should this fee be considered steep at this point in time?"
Dr Malcolm Pace contends that if Robert Gatt does not provide the funds to safeguard the Excelsior asset, he could be held liable by Cecil Pace for having acted in bad faith as a controller.
The last hurdle
According to Article 904 of the Code of Civil Procedures, a plaintiff, defendant or an appellant can be exempted from having to guarantee a certain payment of liable expenses in case of losing the case, on two conditions: 1) if the actor or appellant has a good chance of winning the case (termed a probabilis causa litigandi) and 2) if the actor can prove that he has no financial means of securing this payment.
It was in the appeal to the case instituted by Michele Martone’s nominee Herbert Baldacchino against Cecil Pace and the controller, that Pace asked for a re-trial.
Earlier on in that case, Judge Noel Arrigo had ruled in the case of Baldacchino (Martone’s nominee) against Pace and the controller, that once the shares had been registered in Martone’s name, the Court could not reverse this act. However Arrigo also ruled that this judgement did not prejudice Pace’s earlier 1989 suit against the BICAL controller in which Pace asked to have the M&E shares registered in his name. The game is still on, allowing Pace to pursue the M&E shares through the lawsuit he initiated in 1989 against the controller (for registering Martone’s shares in the first place), still pending to this day.
In this appeal, he was allowed a benefit which saved him from having to pay the money needed to front legal expenses beforehand. Even Martone agreed to this.
However, in early 2003, fresh new evidence came Pace’s way: the former owner of M&E, Nada delle Piane Ghidoli, wife to Antonio Ghidoli, signed a declaration in Florence which confirmed she had sold the shares of M&E (and therefore the Excelsior Hotel), to Cecil Pace:
"… my husband and myself sold and to that effect signed the documents of transfer of all shares to Mr Cecil Pace… 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]… 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."
With this new evidence, whilst the appeal was still being heard, Cecil Pace asked for a re-trial. But for the re-trial to start, he is told to pay Lm30,000 to cover any possible liabilities which could arise if he loses the case.
Since in the appeal to Judge Arrigo’s ruling, Pace had already been awarded the benefit to pay expenses after the case rather than before, which even Martone agreed to, Pace requested once again a benefit to be able to pay any expenses after the trial and not beforehand, since he was unable to provide Lm30,000 up front.
But the Appeals Court is of a different opinion, ruling that such benefit awards one party an advantage and the other party a disadvantage. In a restrictive interpretation of the law, the Appeals Court ruled that Article 904 cites only ‘actors’ and ‘appellants’ were liable to be awarded the benefit of the guarantee, and not someone applying for a re-trial.
"This is a restrictive interpretation of the law because anyone applying for a re-trial is an actor in the case," Malcolm Pace says. "In this situation, Cecil Pace is continuing and following through the appeal and therefore he is an obvious actor eligible for the benefit, as well as proving that he has no financial means to pay the Lm30,000 and that he has a good chance of winning the case through the new evidence given by Nada dell Piane."
The Appeals Court finally decided that it will be up to the parties in the suit to agree if this benefit should be awarded: Michele Martone, whom through his nominee Herbert Baldacchino had already accepted that the benefit be awarded to Cecil Pace in the Appeal to the Noel Arrigo judgement, now refused to agree that the benefit be awarded to Pace for a re-trial.
"This leaves us with only one door open," Malcolm Pace says. "Cecil Pace does not have the financial means to pay Lm30,000 within two weeks to start the re-trial. Only the controller, Robert Gatt, whom, in his duty as controller is obliged to safeguard the BICAL assets, can provide Lm30,000 from the BICAL monies and ensure the re-trial takes off. If this does not happen no re-trial can take place and the shares to M&E will be lost. If previous controllers took Lm1.8 million in payments for their duties, why should Lm30,000 be such a problem for Gatt?"