The Malta Independent

Weekly Law Report

13 October 1996

Doubts versus plausibility

Magistrate Carol Peralta held, in the case "Police vs Michele Martone", decided on 25 September 1996, that a person may only be found guilty of a criminal offence if it is proven, beyond any reasonable doubt, that such offence actually took place.

Defendant, Avv. Michele Martone, acting on behalf of the Italian national Antonio Ghidoli, was arraigned before the Court of Magistrates on the grounds that he had forged a private agreement he had entered into, to the detriment of the company Adelphi Investments Ltd. This private agreement concerned the sale of the shares the client of Dr Martone had in the Maltese company, Malta and Europe Hotels. These shares, in fact, had been sold by means of a private agreement to the Maltese company Adelphi Investments Ltd for the sum of Stg20,500 on 25 February 1972. The proceedings commenced when Cecil Pace, acting on behalf of the company Adelphi Investments Ltd, filed a report against Michele Martone with the police authorities. He claimed that Martone added to the contract of share transfer the words e risolvera il contratto which words, Pace added, were not in the original contract. The Magistrates' court, when considering the evidence, noted that Pace, notwithstanding the fact that he did not represent the company Adelphi Investments Ltd, signed the private agreement as personal guarantor and in solidum with Adelphi Investments Ltd. In actual fact, when the two parties met to sign the agreement in the presence of Dr Albert Ganado, further negotations took place on matters which were not included in the typed contract. Subsequently, additions were made to the contract. Pace claimed that the words e risolvera il contratto were not included in the contract in his presence while Michele Martone claimed that these words were included in the original contract in Pace's presence, and with his consent. Consequently, the court was faced with two different versions. It noted that if it were to believe the accused's version, then it would have to free him from any claims of fraud. On the other hand, however, if the version put forward by the prosecution shows, beyond reasonable doubt, that the accused actually forged the document, then it would have to find him guilty of having forged the document. Furthermore, if the prosecution's version were true, then the private agreement would be valid and Adelphi Investments Ltd would be recognised as a shareholder of Malta and Europe Hotels Ltd. Nevertheless, the court noted, there were certain facts that made this version rather doubtful. One of these facts, the court pointed out, was that the alleged transfer of shares was never registered even though the law requires that such transfer be registered. This was rather unusual, since generally the transferee has an interest to secure his position and protect his investment. Furthermore, the claim put forward by Pace was never mentioned in the various cases he was involved in as shareholder of the companies Pabros Ltd, which was renting out the Excelsior Hotel, and Malta and Europe Hotels Ltd, who were the owners of the Excelsior Hotel. It was also rather strange, the court noted, that Emmanuel Bonello, who had acted as comptroller of the company Malta and Europe Hotels Ltd, had never been shown this private agreement. Finally, the court noted, in the report drafted by Dr Tonio Farrugia on behalf of former Finance Minister George Bonello Dupuis, no mention was ever made of this transfer and, as a matter of fact, it was stated that Antonio Ghidioli was still a shareholder of the company. All this evidence, the court concluded, did not prove that Martone did not forge the contract, but it tilted the balance of probability towards the version given by Martone. Martone, when giving evidence, stated that following the private agreement, the various cheques given by Pace were referred back to the drawer due to insufficient funds. Subsequently, Martone met Pace and it appeared that the latter had lost any interest in purchasing the shares since he was now in possession of the hotel as well as its management through the company Pabros Ltd. As a result, the two met on a yacht in the presence of an Italian person, who died some years later, and agreed to include the words e risolvera' il contratto in order to provide for a time limit within which payment was to be made, in default of which the contract was to be dissolved. These words were included in the contract Martone had, yet were not included in the contract Pace had. This evidence, the court noted, was further corroborated by a telex sent on 31 August 1972 by Antonio Ghidoli wherein it was stated that the contract, as amended with Pace's consent, was cancelled. Having seen to this, the court went on to consider whether Pace could have consented to such amendments, seeing that he appeared in the original private agreement as personal guarantor and in solidum with Adelphi Investments Ltd. When giving evidence in court, Dr Albert Ganado stated that when the private agreement was finalised, Pace was acting as the middle-man. He was negotiating the transfer of the shares. Furthermore, Dr Ganado added, whenever Pace acted as a negotiator of a company, the company was generally considered to be his, even if third parties were involved. Dr Manuel Mizzi, when giving evidence, went on to say that the managing shareholders of the company had authorised the Pace brothers to contract with third parties and enter into any agreement on behalf of the company. All this evidence, the court noted, showed how Pace used to administer his matters and it thus decided to stop considering the matter. Concluding, the Magistrates' Court went on to state that since the case was a criminal case, the evidence had to be such that proves, beyond reasonable doubt, that certain wrongdoings took place. In this case, however, even though the version forwarded by the prosecution could be true, the facts, as presented by Martone, were sufficient to doubt whether the alleged wrongdoings took place or not. Consequently, the Magistrates Court acquitted Michele Martone of all the accusations forwarded against him.

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