Issue link: https://maltatoday.uberflip.com/i/451763
maltatoday, SUNDAY, 25 JANUARY 2015 7 MATTHEW AGIUS AN accountant who demanded €3.5 million for his services to construc- tion developers Peter and Geoffrey Montebello of JPM Brothers, was granted a precautionary warrant in court to stop the sale of the Jerma Palace Hotel and the surrounding land. The accountant, Charles Sciriha, of Management Support Services, filed the claim against JefPet Limited, a company owned by Geoffrey and Peter Montebello, who purchased the Jerma Palace Hotel in 2007 from Libyan investment vehicle Lafico. Sciriha is claiming that the amount represents outstanding fees for con- sultancy services and representa- tion for the Montebellos in various negotiations, including the sale of the land previously occupied by the Jerma Palace Hotel. Sciriha was engaged in 2009 on a consultancy, entitling him to a per- centage of the sale proceeds and profits if two projects JPM Brothers had undertaken with another com- pany, Gemxija Crown Limited, went ahead. He said that in spite of having ful- filled his contractual duties, once ne- gotiations on the Jerma sale reached an advanced stage, the Montebellos terminated his contract, claiming that he had abandoned his respon- sibilities – an allegation Sciriha strongly denies. The contract between the parties stipulated that the consultancy fee was to be 5% of the hotel sale: the value of the land, the share trans- fer to the buyer, and the remaining profit. The Montebellos replied that the €3,525,000 demanded by Sciriha was incorrect, and that the fee would be paid upon the conclusion of the sale of property, the signing of a promise of sale agreement, or the sale of the defendant's shares in the company. None of those events had taken place. They also said that the contract gave them the right to terminate the agreement with six months' notice. "In fact over a year has passed since the date of that contract and there- fore, whichever angle you look at it, the contract had been terminated," JefPet said. JefPet added that compensation had to be calculated on the basis of time and works carried out, not the percentages claimed. Under cross-examination, Sciriha denied suggestions that the €3.5 mil- lion fee claimed was a "success fee", adding that the termination clause invoked by the defence envisaged a worst case scenario and not the ter- mination of the contract to the detri- ment of his rights. On his part, Geoffrey Montebello said that although there had been no problems or complaints about Sciri- ha's consultancy, problems had only cropped up when they disagreed with Sciriha's suggestion that they further increase his percentage. "We do want to pay him, as long as the fee is as it is supposed to be," Monte- bello told the court. Ms Justice Padovani Grima said that the warrant of prohibitory in- junction was necessary to avoid one party "twisting the arm" of the other party into acquiescence, and found that Sciriha had "amply demonstrat- ed a prima facie right.". She also held that the warrant was clearly necessary to safeguard a right, due to the impending judicial sales by auction of JefPet Ltd's and Gemx- ija Crown's assets which – were the warrant not to be issued and the as- sets be sold – would leave Sciriha with nothing to be paid with. The land on which the Jerma Pal- ace Hotel was built originally be- longed to the Franciscan Conventu- als and Ivan Burridge, and was sold to San Tumas Holdings, which in turn sold it to the Libyan Lafico in 1976. Corinthia used to manage the hotel through a management agree- ment. The hotel was never developed since closing down in the 2000s and then sold to JPM Brothers. At some point in 2009, the Tumas and Gasan groups were seeking advice on trans- forming the Jerma Palace Hotel into a potential 'Portomaso of the south', when JPM Brothers were hoping for an urgent sale of the property to set- tle outstanding loans with banks and creditors. News Accountant demands €3.5 million fee for Jerma Hotel sale FILM INDUSTRY CONSULTATION SESSION in Gozo The Malta Film Commission in collaboration with the Ministry for Gozo are inviting individuals, students, professionals and the Gozitan business community for a consultation session on the Film Industry. The objective of this consultation session is for the participants to acquire knowledge on the film industry and to seek any training and working opportunities within the industry. Date: Saturday 31st January 2015 at 10.00am Venue: Ministry for Gozo, Pjazza San Franġisk, Victoria - GOZO Interested participants must register their attendance by sending an email to Lyona-maria.xuereb@mfc.com.mt or call on 79211483. maltalmcommission.com MINISTRY FOR GOZO MINISTRY FOR TOURISM MFC-Consultation-Gozo-15x2cls.indd 2 1/13/2015 3:52:57 PM Montebellos' €3.8 million Xemxija land for court auction MATTHEW VELLA THE land in Xemxija owned by property developers JPM Brothers that was to be developed into Gemx- ija Crown's luxury property over Xemxija ridge, will go on sale by court auction this week. The six parcels of land, in total com- prising 3,215 square metres, are going on sale for a total of €3.87 million. The land was part of JPM Brothers Ltd's plans to develop the area into Mistra Heights, a project spearhead- ed by Gemxija Crown Holdings with financial backing from Kuwaiti real estate magnates Massaleh. But in 2010, JPM was served with a court notice to pay up €42.2 million and €1.3 million in interest, on a de- faulting loan taken out with Austrian- owned Bawag bank. The loan was signed between Bawag and Gemxija Crown for the development of 868 residential units on the site of the former Corinthia Mistra Village. The portions of land put up for sale comprise of: 800 square metres val- ued at €640,000; another 343 square metres abutting on Xemxija Hill for €275,000; another 575 square metres of land known as ta' Xemxija going for €1.4 million; a parcel of 1,231 square metres valued at €1.4 million; a di- vided portion of land of 52.7 square metres valued at €50,000; and anoth- er portion of land forming part of the same territory known as tax-Xagħra, of 215 square metres, for €110,000. The properties are owned by JPM Brothers Ltd. Despite the setback for JPM Broth- ers, owners Peter and Geoffrey Mon- tebello proved able to release their construction stock: in 2010, they sold the unfinished construction on De- piro Street in Sliema, the site of the former Galaxy Hotel, to new devel- opers who eventually completed Bel- monte Heights. They also managed the comple- tion of their signature project, the A3 Towers in Paola. In 2010, they sold 1,800 square metres of basement ga- rage spaces, a ground floor showroom and the first two floors for €1.74 mil- lion to General Workers Union sub- sidiary Paola Estates. mvella@mediatoday.com.mt Derelict: the Jerma Palace hotel in Marsaskala Excavation at the site of the Mistra Heights project in Xemxija