The Prime Minister is lying: it is now impossible for him to reverse the deal with Marco Gaffarena

The Prime Minister said last night that the government’s deal with Marco Gaffarena, in which it bought just one part of a house in Old Mint Street in Valletta, will be reversed.

He was lying. As anybody who has ever bought or sold real estate – and who has even the most basic knowledge of the law – will know, when you have bought a piece of immovable property, and everything is done and notarised, that’s it. You cannot go back to the seller and say, “I’ve changed my mind. Here’s your flat/house/land/garage/part of a house back. Now give me back my money and let’s go back to the notary and reverse everything.”

The government has no special powers in this situation. It is equal before the law as all other purchasers, and has no special status. The transaction in which the government bought part of a house in Valletta from Marco Gaffarena for an extortionate sum can only be undone if Gaffarena consents to it of his own volition in a show of good will.

And that is never going to happen. Gaffarena is not going to cooperate. That is exactly why he was seen at the Land Registry yesterday smiling broadly and not at all perturbed.

To reverse the deal, the government will have to take Marco Gaffarena to court. The process will drag on for years in the Court of First Instance, then be subject to appeal, another process that takes years. The Nationalists in government – or another Labour government led by somebody else entirely – will still be fighting it in 2030. And there is no guarantee that the matter will be decided in the government’s favour.

Marco Gaffarena will have long since used the loot for other enterprises and Joseph Muscat will be retired in Switzerland by then.

But there’s more, and this is important. Marco Gaffarena has two promise-of-sale agreements with the multifarious owners of the remainder of that house in Old Mint Street. The owners agreed to sell to him before the news broke in the press that he had sold the other bit of the house, which he had only just bought from others and not from them, to the government for an extraordinary sum. They had signed with him for a relative pittance, totally unaware that he had struck a deal with the government to buy at an inordinately higher amount what they have promised to sell him at a much lower one.

These two promises of sale are also enforceable at law. Gaffarena is going to buy the remainder of that Valletta house and will own it while the government owns just that bit which is the focus of the Auditor-General’s report and the current scandal. He will then hold the government to ransom for the purchase/sale of the rest of the house, unless the government acts fast – that is, immediately – and issues an expropriation order for the rest of the building before Gaffarena buys it from the owners.

If the government does not immediately issue an expropriation order for the rest of the house, then we should conclude that Marco Gaffarena still has Joseph Muscat in his pocket and Muscat does not wish to cross him or fox his deals made at the expense of the public.

And no, an expropriation order in these circumstances will not harm the current owners. It will benefit both the government and the owners, and the only person who will be foxed is Gaffarena. The owners will receive more under expropriation than they will under their promise of sale signed with Gaffarena, but the government will have to pay far, far less than it would to buy from the corrupt Marco Gaffarena, who is now going to hold out on the sale to extort as much as he can from a government that owns only a bit of the building but needs the rest.