Last Updated on October 24, 2023 by LawEuro
The application concerns an imposed lease under Act XXIII of 1979 amending Chapter 158 of the Laws of Malta (‘the Ordinance’) affecting the applicants’ property at Flat 19 Vincenti Buildings, Straight Street, Valletta (which they hold under a title of perpetual emphyteusis), as of 1991. While the original emphyteutical concession, voluntarily entered into, expired in November 1991, the tenants could continue to reside in the property as a result of Act XXIII of 1979. In that light a new agreement was signed for twenty-one years at the maximum rent allowed by law, i.e. 606 euros (EUR) annually. On the same basis a further agreement was signed in August 2012 at the maximum rent allowed by law of EUR 843, subject to increases according to the rate of inflation every three years, which was to come to an end in 2027. Having regard to the findings of the domestic court relating to Article 1 of Protocol No. 1, the Court considers that it is not necessary to re‑examine in detail the merits of the complaint. It finds that, as established by the domestic court, the applicants were made to bear a disproportionate burden. Moreover, as the Court has already found in the context of the objection on victim status (see paragraph 9 above), the redress provided by the domestic court did not offer sufficient relief to the applicants. The foregoing considerations are sufficient for the Court to find that there has been a violation of Article 1 of Protocol No. 1 to the Convention.
SECOND SECTION
CASE OF VASSALLO AND VINCENTI v. MALTA
(Application no. 38111/21)
JUDGMENT
STRASBOURG
24 October 2023
This judgment is final but it may be subject to editorial revision.
In the case of Vassallo and Vincenti v. Malta,
The European Court of Human Rights (Second Section), sitting as a Committee composed of:
Pauliine Koskelo, President,
Lorraine Schembri Orland,
Davor Derenčinović, judges,
and Dorothee von Arnim, Deputy Section Registrar,
Having regard to:
the application (no. 38111/21) against the Republic of Malta lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 22 July 2021 by two Maltese nationals, Ms Edwina Vassallo and Ms Annunziata Vincenti, born in 1956 and 1929 respectively and living in Sliema and St. Julians respectively (“the applicants”), who were represented by Dr C. Ellul, a lawyer practising in Valletta;
the decision to give notice of the complaints concerning Article 1 of Protocol No. 1 to the Convention alone and in conjunction with Article 13 of the Convention to the Maltese Government (“the Government”), represented by their Agents, Dr C. Soler, State Advocate, and Dr J. Vella, Advocate at the Office of the State Advocate, and to declare inadmissible the remainder of the application;
the parties’ observations;
Having deliberated in private on 3 October 2023,
Delivers the following judgment, which was adopted on that date:
SUBJECT MATTER OF THE CASE
1. The application concerns an imposed lease under Act XXIII of 1979 amending Chapter 158 of the Laws of Malta (‘the Ordinance’) affecting the applicants’ property at Flat 19 Vincenti Buildings, Straight Street, Valletta (which they hold under a title of perpetual emphyteusis), as of 1991. While the original emphyteutical concession, voluntarily entered into, expired in November 1991, the tenants could continue to reside in the property as a result of Act XXIII of 1979. In that light a new agreement was signed for twenty-one years at the maximum rent allowed by law, i.e. 606 euros (EUR) annually. On the same basis a further agreement was signed in August 2012 at the maximum rent allowed by law of EUR 843, subject to increases according to the rate of inflation every three years, which was to come to an end in 2027.
2. In 2017 the applicants and/or their predecessor in title lodged constitutional redress proceedings complaining that the application of Article 12 of the Ordinance was in breach of their property rights. According to the court-appointed expert the annual rental market value at the time the concession expired (in 1991) was EUR 2,250 which continued to increase up to EUR 7,525 in 2011 and EUR 16,000 in 2018.
3. By a judgment of 5 June 2020, the Civil Court (First Hall) in its constitutional competence found that the applicants had suffered a violation of Article 1 of Protocol No. 1 to the Convention as of 1991, as at that date the applicants or their predecessors in title had no other option but to enter into the agreement, the results of which created an unfair balance. It awarded EUR 30,400 in pecuniary damage and EUR 3,000 in non-pecuniary damage covering, however, only the period from 2012 (date of the end of the last agreement) to 2017 (date of the introduction of the proceedings). In determining compensation, the court took note, inter alia, that the applicants lodged their constitutional complaints only in 2017, that the last agreement entered into by the applicants covered the period until 2027, as a result of their own choice, and that the applicants had a new remedy, which they were pursuing, enabling them to increase the rent following the 2018 amendments to the law. Furthermore, it noted that the rental yields used by the expert were rather high when compared to those established by the 2018 amendments, namely, 2 percent, which would be more adequate, and thus its calculations were based on the latter.
4. The State Attorney’s appeal was rejected by the Constitutional Court on 27 January 2021, it being found to be frivolous and vexatious. No costs were to be paid by the applicants.
5. In the meantime, on 21 December 2018, the applicants instituted ordinary proceedings before the Rent Regulation Board (hereinafter “RRB”) demanding the RRB to recognise the occupant of the property as the tenant thereof and to increase the rent according to the new Article 12B introduced by means of the 2018 amendments to the law.
6. The applicants complained under Article 1 of Protocol No. 1 to the Convention alone and in conjunction with Article 13 of the Convention that they were still victims of the violation upheld by the domestic court as a result of the low amount of compensation awarded and the failure to evict the tenants.
THE COURT’S ASSESSMENT
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO THE CONVENTION
7. The applicants complained that they were still victims of the violation of Article 1 of Protocol No. 1 to the Convention upheld by the domestic court.
8. The Court refers to its general principles concerning victim status and its established case‑law in cases similar to the present one (see, among many other authorities, Apap Bologna v. Malta, no. 46931/12, §§ 41, 43, 48 and 82, 30 August 2016). The Court observes that the domestic court has acknowledged the violation as of 1991 and awarded EUR 30,400 in pecuniary damage and EUR 3,000 in non-pecuniary damage.
9. Even though the market value is not applicable, and the rent valuations may be decreased due to the legitimate aim at issue and other relevant factors, bearing in mind that the property had an estimated rental value of, for example, EUR 2,250 in 1991 and EUR 16,000 in 2018, the Court considers that the compensation awarded for the violation since 1991 was not adequate. This consideration suffices to find that the redress provided by the domestic court did not offer sufficient relief to the applicants, who thus retain victim status for the purposes of this complaint (see, mutatis mutandis, Portanier v. Malta, no. 55747/16, § 24, 27 August 2019). The Government’s objection to this effect is therefore dismissed.
10. The Court also dismisses the Government’s objection of non‑exhaustion of domestic remedies (in so far as the applicants had not appealed to the Constitutional Court). The Court has already made relevant considerations related to the Constitutional Court’s effectiveness for the period until 2018 in Cauchi v. Malta (no. 14013/19, §§ 55 and 77, 25 March 2021) and for the period until 2019 in Pace v. Malta ([Committee], no. 53545/19, § 9, 29 September 2022), and Grima and Others v. Malta ([Committee], no. 18052/20, § 8, 7 March 2023).
11. The Court notes that the additional domestic judgments relied on by the Government in the present case, related to 2020, show that the Constitutional Court increased compensation in seven[1] of the eight appeals where this was requested. Thus, the Court considers that the case-law relied on by the Government offers a good indication that in 2020 the Constitutional Court abandoned its precedent practice of diminishing compensation awarded at first instance and, as argued by the Government, has started to examine these rent law cases on their own merits, taking into account the facts of each case.
12. However, the Court observes that the compensation terms applied by the Constitutional Court in March 2020 were nonetheless not consistently satisfactory. For example, on the same day, 27 March 2020, it upheld the plaintiff’s appeal and increased compensation in one judgment, thus awarding adequate compensation (see Tabone v. Malta (dec.) [Committee], no. 23107/20, §§ 10-13, 28 March 2023), while upholding the State’s appeal and therefore reducing compensation in two other judgments[2], at least one of which resulting in an inadequate amount of compensation being awarded (see Grima v. Malta [Committee], no. 38660/20, §§ 6 and 9, 22 September 2022). The next case where compensation was increased by the Constitutional Court is dated 20 July 2020[3], that is after the expiry of the time-limit for the applicants in the present case to appeal (i.e., twenty running days from the first-instance judgment of 5 June 2020 in their case). Thus, even assuming that, by 20 July 2020, the final awards made by the Constitutional Court were already in line with this Court’s awards (see, for example, Cuschieri and Others v. Malta [(dec.) Committee], no. 36806/21, § 8, 20 September 2022, in relation to the beginning of 2021), and that it could be considered an effective remedy, given the relevant timeline in the circumstances of the present case, the applicants could not have been expected to lodge an appeal to the Constitutional Court prior to that date.
13. The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention or inadmissible on any other grounds. It must therefore be declared admissible.
14. As to the merits, the Court refers to its general principles as set out, for example, in Amato Gauci v. Malta (no. 47045/06, §§ 52-59, 15 September 2009).
15. Having regard to the findings of the domestic court relating to Article 1 of Protocol No. 1, the Court considers that it is not necessary to re‑examine in detail the merits of the complaint. It finds that, as established by the domestic court, the applicants were made to bear a disproportionate burden. Moreover, as the Court has already found in the context of the objection on victim status (see paragraph 9 above), the redress provided by the domestic court did not offer sufficient relief to the applicants.
16. The foregoing considerations are sufficient for the Court to find that there has been a violation of Article 1 of Protocol No. 1 to the Convention.
II. OTHER COMPLAINTS
17. The applicants also complained under Article 13 of the Convention in conjunction with Article 1 of Protocol No. 1. Having regard to the facts of the case, the submissions of the parties, and its findings above, including those related to the development of the Constitutional Court’s case-law in 2020, the Court considers that it has dealt with the main legal questions raised by the case and that there is no need to examine the remaining complaint (see Centre for Legal Resources on behalf of Valentin Câmpeanu v. Romania [GC], no. 47848/08, § 156, ECHR 2014).
APPLICATION OF ARTICLE 41 OF THE CONVENTION
18. The applicants claimed 40,099 euros (EUR) in respect of pecuniary damage for rental losses from 1991 up to 2018 based on the court-appointed expert’s valuation and in accordance with their own calculations which they considered were based on the principles of Cauchi (cited above). They further asked the Court to make an award in respect of non-pecuniary damage and claimed EUR 1,353 in costs incurred before the Court.
19. The Government submitted that the claims were excessive and in any event the calculation based on Cauchi (cited above) incorrect.
20. The Court has made all the considerations applicable in this type of cases, as set out in Cauchi (cited above, §§ 102-07). Noting in particular that the award of the Civil Court remains payable if not yet paid, the Court awards the applicants, jointly, EUR 30,000 in pecuniary damage and rejects their claim for non‑pecuniary damage which can be considered covered by the domestic award. It further considers it reasonable to award EUR 1,000, plus any tax that may be chargeable to the applicants, in respect of costs and expenses incurred before the Court.
FOR THESE REASONS, THE COURT, UNANIMOUSLY,
1. Declares the complaint concerning Article 1 of Protocol No. 1 to the Convention admissible;
2. Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention;
3. Holds that there is no need to examine the admissibility and merits of the remaining complaint;
4. Holds
(a) that the respondent State is to pay the applicants, jointly, within three months, the following amounts:
(i) EUR 30,000 (thirty thousand euros), in respect of pecuniary damage;
(ii) EUR 1,000 (one thousand euros), plus any tax that may be chargeable to the applicants, in respect of costs and expenses;
(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;
5. Dismisses the remainder of the applicants’ claim for just satisfaction.
Done in English, and notified in writing on 24 October 2023, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Dorothee von Arnim Pauliine Koskelo
Deputy Registrar President
___________
[1] Victoria Amato Gauci et v. L-Avukat Generali et, Rik. 85/2013, 28 February 2020;
Catherine Tabone pro et noe v. L-Avukat Generali et, Rik. 27/18, 27 March 2020;
Mario Cachia et v. Supermarkets Limited et, Rik. 82/2015, 20 July 2020;
Angela sive Gina Balzan v. L-Onorevoli Prim Ministru et, Rik. 16/2015/1, 8 October 2020;
Michael Farrugia et v. L-Avukat Generali et, Rik. 79/2016, 6 October 2020;
Giovanna Bartoli et v. Carmelo Calleja et, Rik. 46/2018/1, 6 October 2020;
Henry Deguara Caruana Gatto et v. L-Avukat tal-Istat, Rik. 36/18, 23 November 2020.
[2] Joseph Grima et v. L-Avukat Generali et, Rik. 22/19, 27 March 2020,
Brian Psaila v. L-Avukat Generali et, Rik. 12/2018, 27 March 2020.
[3] Mario Cachia et (cited above).
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