Last Updated on November 2, 2019 by LawEuro
FOURTH SECTION
CASE OF VELLA v. MALTA
(Application no. 73182/12)
JUDGMENT
STRASBOURG
27 February 2018
This judgment is final but it may be subject to editorial revision.
In the case of Vella v. Malta,
The European Court of Human Rights (Fourth Section), sitting as a Committee composed of:
Faris Vehabović, President,
Carlo Ranzoni,
Péter Paczolay, judges,
and Andrea Tamietti, Deputy Section Registrar,
Having deliberated in private on 6 February 2018,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in an application (no. 73182/12) 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”) by a Maltese national, Ms Josephine Mary Vella (“the applicant”), on 13 November 2012.
2. The applicant was represented by Dr I. Refalo and Dr S. Grech, lawyers practising in Valletta. The Maltese Government (“the Government”) were represented by their Agent, Dr P. Grech, Attorney General.
3. On 22 January 2015 the application was communicated to the Government.
4. The Government objected to the examination of the application by a Committee. After having considered the Government’s objection, the Court rejects it.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
5. The applicant was born in 1932 and lives in Siġġiewi.
A. Background to the case
6. The applicant is the owner of 14 Kirkop Square, Kirkop, a two‑storey tenement with a surface area of around 175 sq.m. (hereinafter “the property”). In 1975, 1979, and 1987, following the death of their father, mother and uncle respectively, the applicant and her three brothers inherited an estate which included the property. By a deed of partition of 11 November 1998 the property was assigned to the applicant and she became its sole owner.
7. The property was requisitioned in 1955 by means of a requisition order. The premises were then allocated to the San Leonard Band Club in Kirkop (hereinafter “the band club”). The owners of the property never recognised the tenant or accepted any rent from the club. According to a judgment of 1 February 1958 of the Civil Court (First Hall) in its ordinary jurisdiction, the owners were entitled to do so because the tenement had not been leased as a dwelling, and thus greater risks were involved.
8. In the years that followed rent was paid to the owners by the competent authority (then the Director of Social Housing, today the Housing Authority). The annual rent payable amounted to 30 Maltese Lira (MTL – approximately 70 euros (EUR)), less than EUR 6 per month. According to an architect’s valuation from 2007 submitted by the applicant, the rental value of the tenement at the time was MTL 750 (approximately EUR 1,747) per month. The Government challenged this estimate, as the valuation had contained no explanation as to the basis for the calculations, or whether the property was considered residential or commercial, or vacant or occupied. They relied on a valuation in an architect’s report concerning a property (3 Kirkop Square) requisitioned in 1955 for the purposes of the band club – which stated that the rental value in 2015 was EUR 12,250 per year, which meant EUR 1,021 per month. The Government did not refer to the different address, arguing as though the valuation referred to the property at issue in the present case.
9. Over the years the band club carried out extensive structural alterations, without obtaining the consent of the owners or the relevant permits from the competent authorities. According to an architect’s report, there had been a total change and the alteration effected had effaced what had once been the traditional layout of important buildings in old Maltese towns. According to the applicant, this deprived her of the valuable quality and historical and architectural importance of the property, thus devaluing it. The Government argued that the applicant had not availed herself of any ordinary remedy in this regard and had thus failed to substantiate the loss in value. Moreover, in their view the property was in a good state of repair and the alterations had increased its value.
10. According to the applicant, the band club also repeatedly breached the tenancy agreement which it had signed, by manufacturing fireworks on the premises and conducting commercial activities (such as running a bar and letting the premises out as a wedding venue despite not having the requisite authorisation). The Government submitted that these were unsubstantiated allegations, which had not been proved before the domestic courts.
11. As from 2008, in the light of constitutional proceedings (see below), the band club started depositing the annual rent in court.
B. Proceedings concerning the adjacent property
12. The applicant and her brothers also owned a property (18 St. John’s Alley, Kirkop) adjacent to the tenement above, which was requisitioned in 1986 and also assigned to the band club.
13. In 1987 the owners of the tenement instituted civil proceedings before the Civil Court (First Hall) in its ordinary jurisdiction against the Housing Secretary and the band club. They requested that the requisition order of 30 December 1986 be declared null and void as being contrary to the 1949 Housing Act, and sought to regain possession of the tenement. They also requested compensation for the damage allegedly sustained.
14. In a judgment of 9 October 1991 the Civil Court (First Hall) in its ordinary jurisdiction rejected the plaintiffs’ claim. The owners appealed against that decision.
15. In a judgment of 30 December 1993 the Court of Appeal declared the requisition order null and void and ordered that the appellants be given possession of the premises within six months. It held that the requisition for the purposes of assigning the property to the band club could not be considered to be in the public interest. It sent the case back to the Civil Court (First Hall) in its ordinary jurisdiction for it to award the appellants compensation.
16. In a judgment of 31 May 2005 the Court of Appeal rejected a request for a new trial submitted by the band club.
17. In a judgment of 16 October 2006 the Civil Court (First Hall) in its ordinary jurisdiction found the Housing Secretary and the band club liable for the damage suffered by the owners in connection with the structural alterations to the property. This judgment was upheld by the Court of Appeal on 27 February 2009.
18. By a judgment of 6 May 2009 the Civil Court (First Hall) in its ordinary jurisdiction awarded the owners EUR 72,000 in damages, covering EUR 16,000 for missing objects, EUR 40,000 to rectify the structural changes made and EUR 16,000 for the loss of use of the property for twenty years. This judgment was upheld by the Court of Appeal on 2 October 2012.
C. Constitutional redress proceedings
19. In 2007 the applicant instituted constitutional redress proceedings in relation to the property requisitioned in 1955, asking the court to declare that, as a result of the requisition order and the continued occupation of the premises, she had suffered a breach of her rights under Article 14 of the Convention and Article 1 of Protocol No. 1 to the Convention. She asked the court to award her compensation for the taking of possession of the property and for the violations suffered, and to order any other measure capable of preventing the continuation of the violation, including the release of the property.
20. The defendants, the Director of Social Accommodation, the Attorney General and the band club, argued that no such violations had occurred.
21. By a judgment of 11 October 2011 the Civil Court (First Hall) in its constitutional jurisdiction upheld the applicant’s claims. It considered that the requisition order had been issued for the property to be enjoyed by a private entity and therefore the measure had not been in the public interest. In this connection, it referred to a judgment of 30 December 1993 by the Court of Appeal concerning what it considered to be the same property (see above). Moreover, the measure had not been proportionate. The rent had been derisory, causing the applicant to suffer a disproportionate and excessive burden. She had therefore suffered a violation of Article 1 of Protocol No. 1. According to the court, the applicant had also suffered a violation of Article 14, as only her property had been requisitioned for the use of the band club. In determining the amount of compensation, the court did not take into account the fact that the applicant or her ancestors had received rent, given that the amount was derisory. Bearing in mind the values established by the applicant’s expert as to the rental value and sale value of the property, which was MTL 180,000 (approximately EUR 420,000) (pg.12 of the judgment), as well as the length of time the requisition was and remained in place, the court awarded the applicant EUR 60,000 in compensation (kumpens) for the requisition of the premises and the violations found, noting it was not awarding civil damages (danni ċivili) in this context. Three quarters of the amount was to be paid by the Director of Social Housing and one quarter by the band club. It further ordered the band club to vacate the premises within three months of the date of judgment and to return the premises to the applicant.
22. The band club appealed, arguing that it could not be held responsible for breaches of human rights and that, in any event, the measure had been in the public interest. It further contested the order to vacate the property. The Attorney General and the Director of Social Accommodation also appealed, in particular in relation to the findings of a lack of public interest, a violation of Article 14 and the redress awarded. The applicant cross‑appealed, arguing that the compensation awarded was too low and did not reflect the losses she had incurred over the years.
23. By a judgment of 25 May 2012 the Constitutional Court upheld the first-instance judgment in part. It reiterated the finding of a violation of the applicant’s rights under Article 1 of Protocol No. 1 only in so far as the requisition had been disproportionate. It found, however, that it had been in the public interest – the court considered that jurisprudence had shifted since the time of the judgment of 30 December 1993 of the Court of Appeal on which the first-instance court had based its assessment. In the present case the requisition had served a social and cultural purpose for the generality of citizens and could not be said to have served solely private interests.
24. It further found that there had been no violation of Article 14.
25. As to the redress, the Constitutional Court revoked the order for the club to vacate the premises. Considering that the violation of Article 1 of Protocol No. 1 was a consequence of the lack of a fair balance between the interests of the landlord and those of the tenant, and given that the validity of the lease was not at issue in the present case, it did not seem appropriate for it to evict the tenant; it sufficed that that unfair balance be redressed.
26. The Constitutional Court confirmed the amount of compensation awarded by the first-instance court, including the way in which it had to be shared. It considered that the band club had benefited from the situation and had never attempted to fix it, despite the fact that it had not been recognised as a tenant. In relation to the amount of compensation, it considered that the disproportionality of the measure had not persisted since the start of the requisition in 1955, but had started to be so only after the 1980s. Furthermore, the applicant had received the rent paid by the department and had only instituted constitutional proceedings in 2007 (while never contesting the validity of the requisition), thus it was legitimate and in line with local case-law to reduce her compensation. It also held that the property had been taken in the public interest and therefore the compensation needed not reflect market values. It followed that the compensation had to be reduced, however, given that the property was not to be vacated, it was appropriate to retain the amount awarded by the first‑instance court. Lastly, the court held that the claim for damages for the depreciation of the property as a result of structural works did not fall within the ambit of a constitutional complaint, and it was thus not its place to award such damages.
27. The Constitutional Court ordered the applicant to pay the costs of the cross-appeal and half the judicial costs of the proceedings before the two levels of jurisdiction.
II. RELEVANT DOMESTIC LAW AND PRACTICE
A. Requisition orders
28. The relevant domestic law and practice concerning requisition orders is to be found in, inter alia, Ghigo v. Malta (no. 31122/05, §§ 18‑24, 26 September 2006).
29. Furthermore, Subsidiary Legislation 16.13, entitled Conditions Regulating the Leases of Club Regulations provides, in so far as relevant, as follows:
“2. (1) The rent of a club as referred to in Article 1531J of the Civil Code which is paid on the basis of a lease entered into before the 1st June 1995 shall, unless otherwise agreed upon in writing after the 1st January 2014, or agreed upon in writing prior to the 1st June 1995 with regard to a lease which was still in its original period di fermo or di rispetto on the 1st January 2014, as from the date of the first payment of rent due after the 1st January 2014, be increased by a fixed rate of ten per cent over the rent payable in respect of the previous year and shall continue to be increased as from the date of the first payment of rent due after the 1st January of each year until and including the year 2016 by ten per cent over the previous rent.
(2) The rent as from the first payment of rent due after the 1st January 2017 shall be increased by a fixed rate of five per cent over the rent payable in 2016. Such rent shall continue to be increased by five per cent per annum until the 31 December 2023 and the rent shall thereafter increase every year according to the index of inflation for the previous year.
3. (1) Where club premises or part thereof to which these regulations apply are used for the generation of income through an economic activity carried out in the said premises, then as from the 1st January 2015 the tenant of the said premises shall also pay the person entitled to receive the rent a sum equivalent to five per cent of the annual income derived by the club from the said economic activity, other than income derived from fund raising or philanthropic activities organised and managed by the club itself:
Provided that for the purposes of this regulation, income generated from economic activity means any income which is directly or indirectly derived from the bar and, or restaurant and from any lease, sub-lease, lease of a going – concern or a management agreement of the said premises that is leased out as a club or part thereof.
(2) The amount referred to in sub-regulation (1) shall be calculated on an annual basis and shall be payable by the 30th September of the following year with the first payment being due in respect of the year 2015 by the 30th September 2016.
(3) The annual income referred to in sub-regulation (1) shall be calculated on the basis of financial statements signed by a certified public accountant in the case of clubs having an income of less than €200,000 per annum and by audited financial statements in the case of clubs having an income of €200,000 or more per annum.”
B. The Civil Code
30. The relevant provisions of the Civil Code, following the 2009 and 2010 amendments, read as follows:
Article 1523(3)
“”commercial tenement” means an urban tenement which is not a residence and which is leased to house an activity primarily intended to generate profit and includes, but is not limited to, an office, a clinic, a tenement leased out for the sale of merchandise by wholesale or retail, a market stall, a warehouse, a storage used for commercial purposes as well as any tenement licensed to sell things, wines, spirits or foodstuff or drinks, theatre, or tenement mainly used for any art, trade or profession:
Provided that a tenement leased to a society or leased to a musical, philanthropic, social, sporting or political entity, that is used as a club, shall not be considered as a commercial tenement even if part of it is used for the purpose of generating profit;
“club” means any club which is registered as such with the Commissioner of Police in accordance with the provisions of the law.”
Article 1531C
“(1) The rent of a residence which has been in force before the 1st June, 1995 shall be subject to the law as in force prior to the 1st June, 1995 so however that unless otherwise agreed upon in writing after the 1st January, 2010, the rate of the rent as from the first payment of rent due after the 1st January, 2010, shall, when this was less than one hundred and eighty-five euro (€185) per year, increase to such amount:
Provided that where the rate of the lease was more than one hundred [and] eighty‑five euro (€185) per year, this shall remain at such higher rate as established.
(2) In any case the rate of the rent as stated in subarticle (1) shall increase every three years by a proportion equal to the increase in the index of inflation according to article 13 of the Housing (Decontrol) Ordinance; the first increase shall be made on the date of the first payment of rent due after the 1st January, 2013:
Provided that where the lease on the 1st January, 2010 will be more than one hundred [and] eighty-five euro (€185) per year, and by a contract in writing prior to 1st June, 1995 the parties would have agreed upon a method of increase in rent, after 1st January, 2010 the increases in rent shall continue to be regulated in terms of that agreement until such agreement remains in force.”
Article 1531J
“In the case of a tenement leased to an entity and used as a club before the 1st June, 1995 including but not limited to a musical, philanthropic, social, sport or political entity, when its lease is for a specific period and on the 1st January, 2010 the original period “di fermo” or “di rispetto” is still running and the lease has not yet been automatically extended by law, then in that case the period of lease established in the contract shall apply. In all other instances where the contract of lease was made prior to the 1st June, 1995 the law and all definitions as in force on the 1st June, 1995 shall continue to apply:
Provided that notwithstanding the provisions of the law as in force before the 1st June, 1995, the Minister responsible for accommodation may from time to time make regulations to regulate the conditions of lease of clubs so that a fair balance may be reached between the rights of the lessor, of the tenant and the public interest.”
Article 1531M
“With regard to leases made before the 1st June, 1995 of tenements which are not residences or commercial tenements, subject to the provisions of article 1531J relating to clubs, and subject to the provisions of article 1531H with regard to garages and summer residences, the law and all definitions as were in force before the 1st June, 1995 shall continue to apply:
Provided that the Minister responsible for accommodation may from time to time make regulations to regulate such leases so that a fair balance may be reached between the rights of the lessor, of the tenant and the public interest.”
31. Under Article 946 of the Civil Code, after partition, a co-heir is deemed to be the sole and direct successor to property comprised in his share. The provision reads as follows:
“Each co-heir is deemed to have succeeded alone and directly to all the property comprised in his share, or come to him by licitation, and never to have had the ownership of the other hereditary property.”
C. Remedies
32. Article 46 of the Constitution of Malta, in so far as relevant, reads:
“(1) … any person who alleges that any of the provisions of articles 33 to 45 (inclusive) of this Constitution has been, is being or is likely to be contravened in relation to him, or such other person as the Civil Court, First Hall, in Malta may appoint at the instance of any person who so alleges, may, without prejudice to any other action with respect to the same matter that is lawfully available, apply to the Civil Court, First Hall, for redress.
(2) The Civil Court, First Hall, shall have original jurisdiction to hear and determine any application made by any person in pursuance of sub-article (1) of this article, and may make such orders, issue such writs and give such directions as it may consider appropriate for the purpose of enforcing, or securing the enforcement of, any of the provisions of the said articles 33 to 45 (inclusive) to the protection of which the person concerned is entitled:
Provided that the Court may, if it considers it desirable so to do, decline to exercise its powers under this sub-article in any case where it is satisfied that adequate means of redress for the contravention alleged are or have been available to the person concerned under any other law.
(4) Any party to proceedings brought in the Civil Court, First Hall, in pursuance of this article shall have a right of appeal to the Constitutional Court.”
33. Similarly, Article 4 of the European Convention Act, Chapter 319 of the Laws of Malta, provides:
“(1) Any person who alleges that any of the Human Rights and Fundamental Freedoms, has been, is being or is likely to be contravened in relation to him, or such other person as the Civil Court, First Hall, in Malta may appoint at the instance of any person who so alleges, may, without prejudice to any other action with respect to the same matter that is lawfully available, apply to the Civil Court, First Hall, for redress.
(2) The Civil Court, First Hall, shall have original jurisdiction to hear and determine any application made by any person in pursuance of subarticle (1), and may make such orders, issue such writs and give such directions as it may consider appropriate for the purpose of enforcing, or securing the enforcement, of the Human Rights and Fundamental Freedoms to the enjoyment of which the person concerned is entitled:
Provided that the court may, if it considers it desirable so to do, decline to exercise its powers under this subarticle in any case where it is satisfied that adequate means of redress for the contravention alleged are or have been available to the person concerned under any other ordinary law.
(4) Any party to proceedings brought in the Civil Court, First Hall, in pursuance of this article shall have a right of appeal to the Constitutional Court.”
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION
34. The applicant complained that the requisition order affecting her property had caused her an excessive individual burden, incompatible with Article 1 of Protocol No.1 to the Convention, which reads as follows:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
A. Admissibility
1. Compatibility ratione temporis
35. The Government submitted that because the Convention had only entered into force with respect to Malta in 1967, claims in connection with the period before this should not be entertained by the Court.
36. The applicant made no submissions in this regard.
37. The Court reiterates that its jurisdiction ratione temporis covers only the period after the ratification of the Convention or its Protocols by the respondent State. From that date onwards, all of the State’s alleged acts and omissions must conform to the Convention or its Protocols and subsequent facts fall within the Court’s jurisdiction even where they are merely extensions of an already existing situation (see, for example,Bezzina Wettinger and Others v. Malta, no. 15091/06, § 52, 8 April 2008).
38. The Court further reiterates that in the case of X v. France(no. 9587/81, Commission decision of 13 December 1982, Decisions and Reports (DR) 29, p. 238), it was held that in the absence of any stipulation to the contrary in the declaration made by a State in accordance with former Article 25 of the Convention, the Commission was competent to examine facts which had occurred between the date of ratification and the date on which the State’s declaration under former Article 25 became effective.
39. The Court observes that in the absence of an express limitation, the Maltese declaration of 30 April 1987 is retrospective and the Court is therefore competent to examine facts which occurred between 1967 and 1987(see Bezzina Wettinger and Others,cited above, § 54, and the case-law cited therein).
40. It follows from the above that the Government’s objection must be upheld. The Court finds therefore that the complaint concerning the period before 1967 is incompatible ratione temporis with the provisions of the Convention and must thus be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
2. The Government’s objection of lack of victim status
(a) The parties’ submissions
41. The Government submitted that the applicant had lost her victim status as the national courts had expressly acknowledged the violation and awarded appropriate redress, namely compensation of EUR 60,000. The Government relied on the case of Staykov v. Bulgaria (no. 49438/99, § 90, 12 October 2006), where the Court accepted that the domestic courts which had awarded compensation had acknowledged the relevant violations even though their reasoning could have been more precise.
42. In the present case the Constitutional Court had highlighted that the applicant had started to suffer a disproportionate burden only in the 1980s and it had only been in 2003 that rental prices had increased significantly. Initially, therefore, the amount of rent had not been low, considering the fact that the property was located in a small village. It had also taken into account the fact that the applicant had been receiving rent and that the requisition had been lawful and in the public interest. Thus, the domestic court had given attention to various factors and had finally been satisfied that the situation had called for less than compensation at market value. In the Government’s view, in the present case there was no call for restitution in integrum. They noted that it appeared from the documents submitted that as from mid-2008 the applicant started to receive a higher rent per annum (EUR 185, which would increase every three years), in line with the amendments made to the law, in particular Article 1531C of the Civil Code (see Relevant domestic law above), which applies to the present case given that the tenement originally consisted of a residence. Furthermore, provisions for a yearly increase in the rent of clubs and for the owner’s right to a share in the annual income received from a commercial activity carried out in clubs, were also put in place in 2015 by means of the Conditions Regulating the Leases of Club Regulations (see Relevant domestic law above).
43. They considered that the redress awarded by the Constitutional Court (which amounted to around EUR 1,153.85 per year for fifty two years, that is to say, since 1955 even though the Convention onlyentered into force with respect to Malta in 1967) was sufficient since the requisition had been lawful and had pursued a legitimate aim. It was also comparable to awards made by the Court in similar circumstances which, when including non-pecuniary damage, amounted to, for example, EUR 1,168 and 1,400 annually respectively, in Edwards v. Malta ((just satisfaction), no. 17647/04, § 22, 24, and 37, 17 July 2008), and Ghigo v. Malta ((just satisfaction), no. 31122/05, §§ 19, 21 and 32, 17 July 2008). According to the Government the yearly rent awarded (EUR 1,153.85) in conjunction with the EUR 70 rent paid each month, amounted to a much higher rent than would have been applicable in the first decades of the requisition. Lastly, the Government submitted that the cases relied on by the applicant concerned the failure to award compensation in respect of expropriations not requisitions.
44. The applicant submitted that she could still claim to be a victim of the violation upheld by the domestic court, as the final judgment had only provided partial redress. She argued that the sum awarded was not appropriate given what the property would have fetched had it not been requisitioned or subject to rent restrictions. In her view, the sum of EUR 60,000 for the rent of a huge property over so many years was clearly not appropriate. Moreover, part of that sum had been absorbed by the payments of costs she had been ordered to pay despite being successful in her claim.
45. The applicant further submitted that her situation had not changed following the judgment of the Constitutional Court and therefore she remained a victim of the same requisition order and rent restrictions existing in law. Thus, she was still receiving EUR 70 annually in rent, despite the property’s annual rental market value (in 2007) being EUR 20,964 according to an ex parte architect. In this connection, she referred to the case of Chinnici v. Italy (no. 2) (no. 22432/03, § 40 et sequi, 14 April 2015). The applicant emphasised that the amendments mentioned by the Government had not improved her situation, since they were not applicable to her property. Indeed, her property was being used as a band club not as a residential property, thus the rent remained unaltered in the light of Article 1531J and M of the Civil Code (see Relevant domestic law above).
46. Moreover, while she remained subject to the laws which were found to breach her property rights, she had no prospect of having the property returned to her. Thus, despite the wide powers of the constitutional jurisdictions in relation to redressing Convention violations, in practice no remedy had been given to put an end to a continuing violation which had persisted through time. This practice had become systematic, as evidenced by the various Court judgments, which continued to find that applicants in similar cases are still victims of the Convention, despite the domestic findings in their favour. In this connection, the applicant relied on Azzopardi v. Malta (no. 28177/12, 6 November 2014), Schembri and Others v. Malta (no. 42583/06, 10 November 2009) and Frendo Randon and Others v. Malta (no. 2226/10, 22 November 2011).
(b) The Court’s assessment
47. The Court reiterates that the adoption of a measure favourable to the applicant by the domestic authorities will deprive the applicant of victim status only if the violation is acknowledged expressly, or at least in substance, and is subsequently redressed (see Scordino v. Italy (no. 1) [GC], no. 36813/97, §§ 178 et seq. and § 193, ECHR 2006‑V, and Brumărescu v. Romania [GC], no. 28342/95, § 50, ECHR 1999‑VII). Whether the redress given is effective will depend, among other things, on the nature of the right alleged to have been breached, the reasons given for the decision and the persistence of the unfavourable consequences for the person concerned after that decision (see, for example, Freimanis and Līdums v. Latvia, nos. 73443/01 and 74860/01, § 68, 9 February 2006). The redress afforded must be appropriate and sufficient. Whether an individual has victim status may also depend on the amount of compensation awarded by the domestic courts and the effectiveness (including the promptness) of the remedy affording the award (see, for example, Gera de Petri Testaferrata Bonici Ghaxaq v. Malta, no. 26771/07, § 53, 5 April 2011, and Frendo Randon and Others, cited above, §§ 36-38, concerning Article 1 of Protocol No. 1; Scordino, cited above, § 202, in respect of Article 6; see also Gäfgen v. Germany [GC], no. 22978/05, §§ 118 and 119, ECHR 2010 concerning Article 3).
48. In the present case the Court notes that the first criterion, namely acknowledgment of a violation, has been met.
49. As to the second criterion, the Court notes that appropriate redress in Article 1 of Protocol No. 1 cases requires an award in respect of both pecuniary damage (see Frendo Randon and Others, cited above, §§ 37 and 39, and Azzopardi, cited above, §§ 33-34) as well as non-pecuniary damage, which would generally be required when an individual was deprived of, or suffered an interference with, his or her possessions contrary to the Convention (see Gera de Petri Testaferrata Bonici Ghaxaq, cited above, § 53).
50. The Court notes, firstly, that in the present case, it is unclear which heads of damage are covered by the award granted by the Constitutional Court. From the Constitutional Court’s statements and considerations (see paragraph 26 above), it would appear that it was intended to cover at least pecuniary damage – no mention is, however, made of non‑pecuniary damage. The Government’s calculations (see paragraph 43 above) also assume that the entire amount awarded was in respect of pecuniary damage. It follows that, if that award solely covered pecuniary damage, the applicant is still a victim of the said violation which has not been redressed, given the absence of any redress in the form of an award for non‑pecuniary damage.
51. Secondly, even assuming that the award covered both heads of damage, the Court considers that in the present case, even if it had to be accepted that the market value is not applicable and that the rent valuations may to some extent be decreased due to any legitimate aim, an award of EUR 60,000 – from which around EUR 4,000 (being the sum the applicant had to pay in costs as shown by relevant documents – see paragraph 92 below) must be deducted, and a further sum deducted for the purposes of non-pecuniary damage – can hardly be considered sufficient pecuniary damages given the size of the property and the relevant period, despite any other factors. This is so even in the light of the Government’s own valuations which are in themselves much lower than those submitted by the applicant. Indeed, according to the Government’s submitted valuations (although it is unclear whether the report they relied on is indeed in respect of the property at issue), in 2015 the property had an annual rent of approximately EUR 12,500. Thus, all considerations relevant to the present case having been made, the sum awarded cannot be said to cover pecuniary damage suffered over several years, let alone also non-pecuniary damage.
52. Of further concern to the Court is the persistence of the unfavourable consequences for the applicant. Indeed, following the Constitutional Court judgment, the applicant has remained subject to more or less the same laws which have breached her rights, as the Constitutional Court did not take any action in that respect (see Montanaro Gauci and Others v. Malta, no. 31454/12, § 46, 30 August 2016). The Court observes that the parties are in disagreement as to the applicability of the 2010 amendments to the present case, and it is not for the Court to determine such an issue, which was not even delved into by the constitutional courts. It suffices for the Court to note that even assuming those amendments were applicable (see paragraph 60 below), they only slightly improved the applicant’s situation, in so far as they still represented rents of less than 2% of the current market value (for example, taking as a comparator the Government’s valuations, in 2015 the annual market value of the property was EUR 12,500 while, according to the amendments, the applicant would receive less than EUR 200 annually in that same year). While it is true that the Conditions Regulating the Leases of Club Regulations enacted only recently may have, since 2016, further improved the situation, this legislation has had no effect on the applicant in the four years after the Constitutional Court judgment; it is thus not for the Court to make any considerations in that respect.
53. It follows that the redress provided by the Constitutional Court did not offer sufficient relief to the applicant, who continues to suffer the consequences of the breach of her rights, and thus retains victim status for the purposes of this complaint.
54. The Government’s objection is therefore dismissed.
3. Conclusion
55. The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.
B. Merits
1. The parties’ submissions
56. The applicant submitted that there had been a violation of Article 1 of Protocol No. 1 to the Convention, as upheld by the domestic courts, but also because the requisition had not been lawful since it did not pursue a public interest. That violation continued to persist. She maintained that she continued to receive rent which was three hundred times less than the rental market value.
57. The Government submitted that the measure had been lawful and in the general interest, namely an important social aspect which forms part of the cultural identity of citizens. The Constitutional Court had referred to the social and cultural aim to stimulate the local musical talents and this general interest persisted even though such a service was given by a private entity. The Government admitted that the applicant had suffered a violation of her property rights up to the judgment of the Constitutional Court. They considered, however, that the violation had not continued thereafter, given that in 2010 the rent increased to EUR 185, and would continue to increase every three years. The rent reform also imposed certain obligations on tenants relative to maintenance of the premises.
2. The Court’s assessment
58. As to whether the impugned measure was lawful and pursued a legitimate aim in the general interest of the community, the Court reiterates that in situations where the operation of rent-control legislation involves wide-reaching consequences for numerous individuals and has economic and social consequences for the country as a whole, the authorities must have considerable discretion not only in choosing the form and deciding on the extent of control over the use of property but also in deciding on the appropriate timing for the enforcement of the relevant laws. Nevertheless, that discretion, however considerable, is not unlimited and its exercise cannot entail consequences at variance with the Convention standards (see Fleri Soler and Camilleri v. Malta, no. 35349/05, § 76, ECHR 2006‑X). However, these principles do not necessarily apply in the same manner where, as in the present case, the requisition of property belonging to private individuals is not aimed at securing the social welfare of tenants or preventing homelessness (ibid. § 77). In the Court’s view, in cases such as the present one the effects of the rent-control measures are subject to closer scrutiny at the European level (ibid., in connection with property requisitioned for use as government offices). Furthermore, the use of property for reasons other than to secure the social welfare of tenants and prevent homelessness has an impact on the compensation due to the owner (see Fleri Soler and Camilleriv. Malta (just satisfaction), no. 35349/05, § 18, 17 July 2008).
59. Having regard to the finding of the Constitutional Court relating to Article 1 of Protocol No.1 (see paragraph 23 above, in primis), the Court considers that it is not necessary to re-examine in detail the merits of the complaint and to decide whether the measure was lawful and in the public interest. It suffices to find that, as established by the domestic courts, in the light of the compensation offered to the applicant, she was made to bear a disproportionate burden.
60. As to any improvement following the 2010 amendments, the Court has already noted in paragraph 52 above that the parties are in disagreement in relation to the applicability of those provisions to the present case. However, the Government have submitted a number of receipts covering retrospective payment for the years 2008 to 2012, as well as payments for the years 2013 to 2015. The Court considers that, even accepting that those amendments were applicable to the present case, they only slightly improved the applicant’s situation (see, mutatis mutandis, Apap Bologna, v. Malta, no. 46931/12, § 47, 30 August 2016), in so far as they in any event represented rent of less than 2% of the market value. The Court further considers that any improvement of the situation brought about by the general conditions of the lease cannot make up for the imbalance created by the extremely low amount of rent which persisted.
61. As to any amendments introduced in 2015, the parties have not submitted sufficient detail to enable the Court to make an assessment for the years in respect of which those amendments had any practical effect, if at all.
62. From the information provided, having regard to the meagre amount of rent received by the applicant, which persisted despite the relevant amendments (in 2010), the Court finds that a disproportionate and excessive burden continued to be imposed on the applicant (at least until 2015), who has been ordered to bear most of the social and financial costs of supplying the band club with premises for their activities. It follows that the Maltese State has failed to strike the requisite fair balance between the general interests of the community and the protection of the applicant’s right of property.
63. There has accordingly been a breach of Article 1 of Protocol No. 1 to the Convention.
II. ALLEGED VIOLATION OF ARTICLE 13 OF THE CONVENTION
64. The applicant complained of a violation of Article 13 of the Convention in connection with Article 1 of Protocol No. 1 in so far as the constitutional courts could not be considered an effective remedy to obtain sufficient just satisfaction (covering fair rent over all the relevant years and the depreciation suffered as a result of the actions of the club) or to bring the consequences of the violation to an end. Article 13 of the Convention reads as follows:
“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
A. Admissibility
1. The parties’ submissions
65. The Government submitted that the applicant could have instituted a fresh set of constitutional redress proceedings to complain under Article 13 about the Constitutional Court judgment.
66. The applicant submitted that such an action would not have been appropriate and that the ordinary action was to bring the complaint before the Court.
2. The Court’s assessment
67. The Court notes that it has already established, in the context of Maltese cases before it, that even though Maltese domestic law provides for a remedy, for the purposes of a complaint under Article 13, in respect of a final judgment of the Constitutional Court, the length of the proceedings detracts from the effectiveness of that remedy and that, in view of the specific situation of the Constitutional Court in the domestic legal order, in certain circumstances it is not a remedy which is required to be exhausted (see, passim,Saliba and Others v. Malta, no. 20287/10, § 78, 22 November 2011, and Bellizzi v. Malta, no. 46575/09, § 44, 21 June 2011).
68. The Court notes that the applicant has suffered a violation of her rights over a period of several years. She has already been through one set of constitutional redress proceedings, as a result of which the Court has found that she remained a victim of the violation recognised by the domestic courts (see paragraph 23 above). Given the nature of the complaint and the above-mentioned specific situation of the Constitutional Court in the domestic legal order, the Court finds that the institution of fresh constitutional redress proceedings was not a remedy which was required to be exhausted in the specific circumstances of this case (see, as a recent authority, Apap Bologna, cited above, § 63).
69. Accordingly, the Government’s objection that domestic remedies have not been exhausted is dismissed.
70. The Court reiterates that Article 13 does not apply in the absence of an arguable claim (see Maurice v. France [GC], no. 11810/03, § 106, ECHR 2005‑IX).
71. In the present case the Court has found that the applicant’s complaint under Article 1 of Protocol No.1 was not manifestly ill‑founded and concluded that there has been a violation of Article 1 of Protocol No. 1. Thus, there is no doubt that the complaint relating to that provision is an arguable one for the purposes of Article 13 of the Convention. It follows that Article 13 in conjunction with Article 1 of Protocol No. 1 is applicable in the present case.
72. The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.
B. Merits
1. The parties’ submissions
(a) The applicant
73. The applicant submitted that she had not had an effective remedy capable of redressing the violation under Article 1 of Protocol No.1 to the Convention.
74. Indeed, in ordinary proceedings, if a requisition order had been made lawfully there would be no basis for nullifying the order. As to the constitutional remedy, the applicant submitted that the fact that an individual remained subject to the requisition order and relevant laws (unless Parliament or the authorities took further action) which caused the violation, meant that the violation had not been brought to an end. Indeed, recent case-law showed that the Constitutional Court had taken the view that it could only award compensation for the past violation, but would not order the return of the premises or fix future rent.
(b) The Government
75. The Government submitted that the courts of constitutional jurisdiction could award any type of redress, ranging from an award of compensation, which was the usual type of redress granted in cases of a violation of Article 1 of Protocol No. 1 to various other actions. In cases of complaints under Article 1 of Protocol No. 1, the domestic courts could annul a requisition order or evict a tenant if they considered that it would be the appropriate redress.
76. The Government also made reference to an ordinary civil action and the fact that the applicant could also have sought authorisation for non‑compliance with the Director of Social Housing’s request to recognise the tenant if she was able to show that serious hardship would be caused to her by complying with that request (Article 8 of the Housing Act). However, the applicant had not instituted such proceedings, opting instead to seek constitutional redress. They also considered that the applicant could once again institute constitutional proceedings to complain of a violation of her property rights in connection with the period subsequent to the Constitutional Court judgment. In any event, in the Government’s view, the combination of the available remedies would surely have constituted an effective remedy.
2. The Court’s assessment
77. The Court refers to the general principles under Article 13 as set out in Apap Bologna (cited above, §§ 76-79).
78. In the case of Apap Bologna, which also concerned the requisitioning of property, the Court entered into a detailed analysis of the available remedies (§§ 80-90). In the light of its considerations, and in view of the domestic judgments brought to its attention on the subject, it concluded that although constitutional redress proceedings were an effective remedy in theory, they were not in practice in cases such as the one at hand. In consequence, they could not be considered an effective remedy for the purposes of Article 13 in conjunction with Article 1 of Protocol No. 1 concerning arguable complaints in respect of requisition orders which, though lawful and pursuing legitimate objectives, imposed an excessive individual burden on applicants (§ 91). The Court further considered that the Government had not demonstrated that the aggregate of remedies proposed by them in connection with requisition orders, which imposed an excessive burden on property owners, constituted effective remedies available to the applicant in theory and in practice at the relevant time (§§ 92-93). Accordingly, the Court found that there had been a violation of Article 13, in conjunction with Article 1 of Protocol No. 1 to the Convention (§ 94).
79. In the present case there is nothing warranting a different conclusion. There has therefore been a violation of Article 13, in conjunction with Article 1 of Protocol No. 1 to the Convention.
III. APPLICATION OF ARTICLE 41 OF THE CONVENTION
80. Article 41 of the Convention provides:
“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”
A. Damage
81. The applicant claimed 444,930 euros (EUR) in respect of pecuniary damage and EUR 120,000 in respect of non-pecuniary damage. The amount claimed for pecuniary damage was for loss of rent from 1955 to 2015 calculated on the basis of the following: EUR 14,000 in total from 1955 to 1976; thereafter, on the basis of architect reports which took as a working basis the value in 2007, EUR 2,800 per year for the years 1977 to 1986; EUR 6,450 per year for the years 1987 to 1996 and EUR 20,970 per year for the period 1997 to 2015. These sums total EUR 504,930, from which must be deducted the EUR 60,000 already awarded by the domestic court. The sum of non-pecuniary damage claimed represented a sum of EUR 2,000 per year from 1955 to 2015 for the suffering caused by the continuing violation.
82. The Government firstly submitted that the applicant could only claim damages for the period after 1967 and that no compensation should be paid for the period 1955 to 1967, before the Convention had entered into force with respect to Malta. They further considered the applicant’s architect’s valuation exorbitant, as it had not referred to a number of factors (see paragraph 8 above). The Government further submitted that it was only after 2003 that there had been a property boom and property prices had increased. They also highlighted the fact that the premises were large and old, and that a considerable amount of maintenance expenses had been regularly incurred, meaning it was not appealing to prospective buyers or tenants. In the Government’s view, pecuniary compensation should not exceed EUR 99,960, which reflected an annual rent of EUR 12,250 for twelve years (2003 to 2015) adjusted by 15% in relation to changes in the value of the property over the years and deducted by 20% to make good the costs of maintenance.
83. As to non-pecuniary damage, the Government submitted again that only the period after 1967 had to be taken into account (particularly since she had not been the owner in 1955 and had only become so in 1998) and that, in any event, the non-pecuniary damages awarded should not exceed the amount of EUR 6,000 in line with the Court’s award in similar cases.
84. The Court must proceed to determine the compensation the applicant is entitled to in respect of the loss of control, use and enjoyment of the property which she has suffered.
85. In assessing the pecuniary damage sustained by the applicant, the Court as far as appropriate considers the estimates provided and has regard to the information available to it on rental values on the Maltese property market during the relevant period.
86. The Court reiterates that legitimate objectives in the “public interest”, such as those pursued in measures of economic reform or measures designed to achieve greater social justice, may call for less than reimbursement of the full market valueand that a total lack of compensation can be considered justifiable under Article 1 of Protocol No. 1 only in exceptional circumstances (see James and Othersv. the United Kingdom, 21 February 1986, Series A no. 98, § 54; Jahn and Others v. Germany [GC], nos. 46720/99 and 2 others, § 94, ECHR 2005‑VI; and Ghigo (just satisfaction), cited above, § 18). In the present case however, the Court keeps in mind that the property was not used for securing the social welfare of tenants or preventing homelessness (compare Fleri Soler, (just satisfaction), cited above, § 18).
87. Furthermore, the sums already received by the owners for the period 1967 to 2015 must be deducted. Moreover, the amount of EUR 60,000 awarded by the Constitutional Court must also be deducted.
88. The Court reiterates that an award for pecuniary damage under Article 41 of the Convention is intended to put the applicant, as far as possible, in the position he would have enjoyed had the breach not occurred. It therefore considers that interest should be added to the above award in order to compensate for loss of value of the award over time. As such, the interest rate should reflect national economic conditions, such as levels of inflation and rates of interest (ibid., § 20).
89. Hence, the Court awards the applicant EUR 150,000 under this head.
90. The Court considers that the applicant must have sustained feelings of frustration and stress, having regard to the nature of the breaches. It thus awards the applicant EUR 8,000 under this head.
91. Lastly, the Court makes reference to its call for general measures, under Article 46 of the Convention, to be applied by the Maltese State in order to put an end to the systemic violation of the right of property identified in such cases (see Edwards (just satisfaction), cited above, §§ 30‑34) and its encouragement to the Government to pursue such measures speedily and with due diligence under the supervision of the Committee of Ministers (see Apap Bologna, cited above, § 103).
B. Costs and expenses
92. The applicant also claimed EUR 5,124.01 (EUR 4,447.61 in judicial costs and EUR 676.40 in extra-judicial costs and expenses) for the costs and expenses incurred before the domestic courts and EUR 3,954.85 (including EUR 350, EUR 888.28 and EUR 244.58, as per submitted bills for the architect reports and EUR 2,471.99 in legal fees) for those incurred before the Court.
93. The Government submitted that the EUR 4,447.61 in judicial costs had not yet been paid by the applicant and therefore should not be awarded. They further contested the architect’s fees, and considered that costs and expenses relating to the application before the Court should not exceed EUR 2,000.
94. According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum. In the present case, regard being had to the documents in its possession and the above criteria, as well as the fact that the sums in judicial costs remain payable by the applicant, the Court considers it reasonable to award the sum of EUR 7,000 covering costs under all heads.
C. Default interest
95. The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.
FOR THESE REASONS, THE COURT, UNANIMOUSLY,
1. Declares the complaints concerning Article 1 of Protocol No.1 to the Convention in respect of the period subsequent to 1967, and the complaint under Article 13 in conjunction with Article 1 of Protocol No. 1 admissible and the remainder of the application inadmissible;
2. Holds that there has been a violation of Article 1 of Protocol No.1 to the Convention in respect of the period subsequent to 1967;
3. Holdsthat there has been a violation of Article 13 of the Convention in conjunction with Article 1 of Protocol No.1 to the Convention;
4. Holds
(a) that the respondent State is to pay the applicant, within three months, the following amounts:
(i) EUR 150,000 (one hundred and fifty thousand euros), in respect of pecuniary damage;
(ii) EUR 8,000 (eight thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;
(iii) EUR 7,000 (seven thousand euros), plus any tax that may be chargeable to the applicant, 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 applicant’s claim for just satisfaction.
Done in English, and notified in writing on 27 February 2018, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Andrea Tamietti Faris Vehabović
Deputy Registrar President
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