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MT 17 April 2016

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48 maltatoday, SUNDAY, 17 APRIL 2016 Opinion T he First Hall of the Civil Court on 12 April, 2016 held that for there to be a registered transfer of shares, the correct procedure for the transfer should exist. This was decided in Cecil Pace in his name and in the name of Finindustry Limited -v- Raymond Gatt in his name and in representation of MGI Malta as controller of Finidustry Limited, Tigullio Limited and Rockyvale Alpino (Malta) Limited. The plaintiff in his application explained that they are the shareholders of Tigullio Limited. Raymond Gatt is the liquidator of this company. 499 shares of Tigullio were transferred from Alpino Restaurants Limited to Finindustry. The same type of transfer took place to Rockyvale Alpino (Malta) Limited. The plaintiff asked the liquidator that these transfers be registered with the Malta Financial Services Authority (MFSA), but that never took place. The Company Secretary, Dr Manoel Mizzi had registered the transfer of shares in the company's register and he had issued a share certificate to this effect. The plaintiffs asked the court to order the liquidator to register Finindustry's interest in these companies with the MFSA and declare that the same company has 499 shares in Tigullio, Rockyvale, while Cecil Pace has one share in each company. Raymond Gatt filed his statement of defence, pointed out that the transfers actually took place and therefore, this action is useless. According to a report prepared by the previous comptroller, Emanuel Bonello, the company records showed that Tigullio is owned by Alpinio and Geoffrey Isaac, while Rockyvale is owned by Finindustry and Cecil Pace. Gatt pointed out that according to the Partnership Ordinance, which is the law under which these companies fall, the registration of shares and who holds these shares are to be kept by the company. Therefore, there is nothing else that can be done. Regarding Tigullio evidence of this share transfer has to be shown in order to be registered. Mr Justice Joseph Zammit McKeon, analysed the evidence brought before the court, where Cecil Pace testified that Gatt is the liquidator of Finindustry. The shareholders of Finindustry are BICAL and Victor Grech. According to the MFSA it results that Alpino and Jeffrey Isaacs are shareholders too. The directors of Finindustry were his children Malcolm and Christine Pace. Dr Malcolm Pace explained that before BICAL was closed he was a director of Tigullio, which owned the subemphyteusis of the land on which the nightclub was built. Rockyvale ran the nightclub. When BICAL was closed, the comptroller asked his father and uncle to sign that the bank would have special A share of one Maltese lira, meaning that the comptroller would control the company. According to the Banking Act, 1970, a comptroller could be appointed of every company which owed the bank. These companies had overdrafts with BICAL. From the liquidator's report Rockyvale had 499 shares in Finidustry, while Cecil Pace had one share. The MFSA are showing the original shareholders, notwithstanding that the shares were transferred. Joseph Caruana from the Registrar of Companies explained that according to the Companies Act, the transfer of shares of a company have to be registered in the company's records, and that the Registrar should be notified within 14 days, using Form T. In the Partnership Ordinance, the transfers of shares are registered on the company's records, but there was no obligation to notify the Registrar. The Registrar would learn of this transfer in the annual return. The responsibility of the transfer of shares lies with the company and not the MFSA. It has been established that these companies fall under the Partnerships Ordinance. Article 104 of the Partnership Ordinance confirmed that the company is to keep the record of the members. Article 107 of the Ordinance states that this register must have the list of shareholders and the date when that person is no longer a shareholder. There is no legal obligation to notify the Registrar of any changes, unlike what is established under the Companies Act. The Court then examined Rockyvale, which was owned by Finindustry and Cecil Pace between 1972 and 1988. On examination of the company's register the shareholding was correctly listed and therefore, the court is satisfied. With regard to Tigullio, the situation is different because according to the MFSA in January 2008, the shareholders were Alpino and Geoffrey Isaac. Article 103 of the Partnership Ordinance reads: "103. It shall not be lawful for a company to register a transfer of shares in or debentures of the company unless a proper instrument of transfer or an authentic copy thereof has been delivered to the company: "Provided that nothing in this section shall prejudice any power of the company to register as shareholder or debenture holder any person to whom the right to any shares in or debentures of the company has been transmitted causa mortis." Article 105 states that the company must pass on to the shareholders the share certificates. The certificates are merely a prima facie evidence of the shareholding. In order for the transfer of shares to be valid at law the tax has to be paid. Therefore, in the case of Tigullio, the court has to examine whether the transfer was valid at law. The share certificate exists and was presented in court, so were the audited accounts. From the evidence the shareholders of the company were Alpino and Geoffrey Isaacs in 1969, in January 1970 Finindustry acquired 499 shares from Alpino. But there is no documentary evidence of the transfer to Finindustry. Neither is there any evidence that the tax was paid. Mr Justice Zammit McKeon moved to dismiss the application of the plaintiffs. Malcolm Mifsud, Partner, Mifsud & Mifsud Advocates Correct procedure should be used to register transfer of shares A planning application for the change of use of a workshop to a "place of worship" in Sta Venera was turned down by the Environment and Planning Commission. The Commission had held that the contemplated use does not conform to policy FL-GNRL1, further maintaining that the proposal, if approved, would create an increase in traffic and a shortage of on site parking. In reaction, the applicant appealed before the Environment and Planning Review Tribunal. In his appeal submissions, the applicant contended that the parking shortfall could be mitigated through the payment of a contribution towards the Urban Improvement Fund scheme. Indeed, the appellant made reference to a number of planning permits "whereby a change of use was approved which would require additional parking spaces" once parking requirements could not be catered for on site. The quoted permits include a garage which was converted to a gymnasium and a terraced house which now serves as a child care centre. In all cases, applicants were made to contribute a fee as a compensation for the loss of parking. As a final point, the appellant argued that his premises would only appeal to "people pertaining to a particular religion, living in Sta Venera" – hence one would not anticipate a marked increase in traffic generation as alleged. The Authority rebutted by stating that the proposal does not conform to Policy FL-GNRL-1 (of the General Policy relating to Regeneration/ Consolidation Initiatives) since "it would generate traffic and result in parking shortfall on site." The case officer reiterated that "particular attention would need to be paid to the traffic and parking carrying capacity of the surrounding transportation network, neighbour compatibility issues as well as surrounding existing and planned uses". In its assessment, the Tribunal noted that the site falls in an area designated for "mixed use". The applicable policy in this case is Policy SV01 which inter alia allows the introduction of showrooms and supermarkets. Further on, it was observed that the proposed use, namely a place of worship, is not listed among the acceptable uses contemplated under Policy SV01. Even so, the Tribunal agreed with the Authority that a place of worship is not considered "neighbour compatible" and held that a departure from established policy could therefore not be justified. Against this background, the Tribunal confirmed the Authority's decision and the appellant's request was turned down. robert@rmperiti.com Robert Musumeci is a warranted architect and civil engineer. He also holds a Masters Degree in Conservation and a Law Degree. Robert Musumeci Application for "place of worship" turned down Malcolm Mifsud mmifsud@mifsudadvocates.com.mt mmifsud@mifsudadvocates.com.mt A place of worship is not considered 'neighbour compatible'

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