Published on 3 May 2021

FIRST SECTION

Application no. 42451/20 Alfred Joseph BALDACCHINO and Others against Malta lodged on 23 September 2020 communicated on 16 April 2021

STATEMENT OF FACTS

A list of the applicants is set out in the appendix. The first applicant is the director and representative of the two applicant companies, within which he is a majority shareholder.

The facts of the case, as submitted by the applicants, may be summarised as follows.

In 2007 all three applicants were sued for damage in relation to the allegedly abusive and unlawful structural changes made to a property owned by the State but held by the applicant companies under title of sub emphyteusis, as well as its use after the expiry of their title.

By means of a judgment of 30 November 2011 the court found against the applicant companies which were held to be responsible for the damage and were ordered to pay 438,090 euros (EUR) in damages to the Director of Lands. It declared the first applicant (as a physical person) nonsuited given that he was a separate entity from the two applicant companies (as legal persons).

The three applicants filed an appeal, asking the court to confirm the part of the judgment in relation to the first applicant, but to revoke the remaining, by upholding their plea of prescription or on the merits, and alternatively to alter the quantification of the damage due. The Director of Lands lodged a cross-appeal.

On an unspecified date the applicants were asked to pay EUR 17,367 as security for costs for their appeal to be heard, in terms of Article 249 of the Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta (hereinafter ‘ the COCP ’ ) (see Relevant domestic law below). The sum was determined by the registrar of the courts on the basis of the damage quantified by the first court.

Unable to pay that sum, on 29 October 2015 the applicants filed an application under Article 250 of the COCP (see Relevant domestic law below) for them to be admitted to juratory caution. They submitted supporting documents showing that the first applicant was living off a pension of around EUR 12,000, approximately half of which was used to pay maintenance, as well as the financial statements of the two applicant companies showing that they were not faring particularly well. The Director of Lands submitted the results of his searches which showed that the first applicant owned a villa with extensive land and a judgment in the name of the first applicant whereby he had been awarded EUR 600,000 in compensation. By a decree of 12 January 2016, the Court of Appeal dismissed the applicants ’ request because “it was not convinced that they did not have the means, or could not have obtained the means, to pay the security for costs”. No appeal lay against this decision.

On the same day the applicants ’ appeal against the judgment of 30 November 2011 was declared deserted and therefore not heard.

The appeal of the Director of Lands continued to be heard. By a judgment of 11 March 2016, the Court of Appeal upheld the appeal and confirmed the quantification of damage, which it considered was recoverable from all three applicants in solidum . This was so because the first applicant had blurred the distinction between him and the applicant companies and acted in bad faith in certain dealings.

On 3 May 2016 the applicants instituted constitutional redress proceedings complaining under Article 6 § 1 of the Convention about a lack of access to court because of ( i ) the way in which the costs had been calculated (namely using, as a basis, an amount which was not yet final and which was precisely the subject of the appeal) and (ii) the high amount imposed as guarantee in the present case which, in default of payment, led to their appeal being declared deserted.

The Director of Lands argued inter alia that the applicants had willingly failed to pay the security, noting that the Director of Lands had already lost a case against the first applicant and had paid him substantial compensation. This was beyond any other assets and immoveable property owned by the applicants.

(a) First-instance

By a judgment of 26 April 2019 the Civil Court (First Hall) in its constitutional competence rejected the applicants ’ claim. It considered that they had been able to file an appeal and the fact that it could not be heard because they did not pay the security for costs could not be in breach of their right to court since such a restriction was not excessive or draconian. It had been the applicants who had refused to pay. Indeed, when the Court of Appeal had assessed their means, it had not been satisfied that they had been unable to pay.

(b) Appeal

The applicants appealed claiming that the first court had made general findings without assessing their specific claims. They reiterated that ( i ) the registrar of the courts had erred in calculating costs on the basis of quantified damage which was still sub judice , as opposed to calculating it on the type of action, (ii) the amount they had been requested to pay had been excessive, (iii) their appeal had not been heard because of their inability to pay and (iv) the first court should not have considered the awards the first applicant had obtained in other cases to determine the merits of their constitutional claim.

By a judgment of 27 March 2020 the Constitutional Court dismissed their appeal.

It considered that once the claim for damage had been determined by the civil court, the registrar had been right to take that sum as a basis for his calculations. The deputy registrar of the relevant court and the director for the civil courts and tribunals confirmed that practice. While it was true that that quantification of damage was challenged on appeal, the applicants had no guarantee that they would have succeeded in their appeal claim.

As to their claim that the sum was excessive, it noted that the sum of EUR 17,367 as security for costs covered all the judicial expenses of the appeal, namely those of the registry as well as that of the lawyer and the legal procurator of the opposing party. This enabled the registrar to avoid having to pursue unsuccessful appellants. Given that the security only amounted to 4 % of the amount at issue, in the Constitutional Court ’ s view it was not excessive. Moreover, the law had also provided for a remedy if a person was unable to pay or give a bank guarantee, allowing for taking an oath instead. Lastly, the applicants had had four years since the date of the filing of their appeal and the first hearing of the appeal, time during which they could have envisaged what guarantee would be requested of them.

The relevant articles of the Code of Organisation and Civil Procedure read as follows:

Article 249

“(1) Saving the provisions of the proviso to article 209(1) and unless otherwise provided in any other law, in the case of an appeal from judgments or decrees given in a cause initiated by sworn application, security for costs is to be produced and deposited in court within twelve months from the date of the notification of the amount to be deposited or, if the appeal is to be heard earlier than twelve months from the notification herein mentioned, not later than two days before the date set for the hearing of such appeal.

(2) Such security shall be in an amount determined by the registrar and is to be made either by a deposit of ready money or by a guarantee of a bank licensed in terms of the Banking Act in accordance with Schedule C to this Code.

(3) The deposit shall not be subject to the claims of the creditors of the party making such deposit, so long as it remains to meet the costs of the suit.

(4) The Government of Malta, public corporations, the Central Bank of Malta and banks licensed under the Banking Act are exempt from giving the said security.

(5) The Minister responsible for justice may by regulations exempt any other category of persons or bodies from providing the said security.

(6) The provisions of articles 893 to 905 where inconsistent with this article shall not apply to the security given under this article.”

Article 250

“The security referred to in the last preceding article shall not be required in the cases referred to in articles 42 and 172, or in the case of an appeal from a judgment disallowing a demand for the benefit of the juratory caution, or in the case of any demand for admission to the benefit of juratory caution, or in the case of other collateral demands.”

Article 904

“(1) It shall be lawful to admit the plaintiff or appellant to juratory caution, if he shows prima facie a probabilis causa litigandi and swears that he was unable to raise such security as is required by law.

(2) It shall be lawful for the court at the hearing of the application for the juratory caution, to proceed to hear the merits in so far as the same might bear on the issue as to the juratory caution.”

The provisions of Tarrif A of the COCP, in so far as relevant, read as follows:

“3 (1) In addition to the fees stated in paragraph 2, on the filing any petition, application, or other act of procedure containing a claim which initiates a contentious procedure in a Court of First Instance and requiring the decision of a Judge or Magistrate and when the registry fee is assessable on a determinate value or on a value which may be determined according to law or from the act itself, the following fees shall also be due:

(...)

(f) in respect of any value in excess of €200,000,

per €100 or part thereof .................................... €0.90

(...)

(5) The fees established in sub-paragraph (1) of this paragraph shall be raised by one-third on appeal, but no fee shall be due in terms of subparagraph (2) of this paragraph.”

COMPLAINTS

The applicants complain under Article 6 § 1 of the Convention that they had been denied access to court due to the high guarantee on costs imposed on them. They considered that this was due to the computation applied to their case, based on an indefinite amount, and to the resulting exorbitant guarantee for costs established in their case.

QUESTIONS TO THE PARTIES

1. Was the first applicant a victim of the alleged violation, for the purposes of Article 34 of the Convention? In particular, bearing in mind that the first-instance court found that he was nonsuited, what interest did he have in appealing that judgment?

2. If so, did the first applicant and the two applicant companies have access to a court for the determination of their civil rights and obligations, in accordance with Article 6 § 1 of the Convention? In particular, were the costs payable determined by a law which was of a sufficient quality? Was it precise and foreseeable?

3. If so, were any restrictions on the applicant ’ s access to court justified and proportionate to any legitimate aim pursued? Was the decision of the Court of Appeal, deciding on the applicants ’ request to be admitted to juratory caution, reasonable and based on relevant and sufficient reasons in respect of each of the three applicants?

APPENDIX

No.

Applicant ’ s Name

Year of birth/registration

Nationality

Place of residence

1.Alfred Joseph BALDACCHINO

1937Maltese

Rabat

2.REGENCY ESTATES LIMITED

1966Registered in Malta

Valletta

3.WESTMINSTER SECURITIES LIMITED

1974Registered in Malta

Valletta