Communicated on 9 October 2020 Published on 26 October 2020

FIRST SECTION

Application no. 47505/19 Louis APAP BOLOGNA against Malta lodged on 6 September 2019

STATEMENT OF FACTS

The applicant, Mr Louis Apap Bologna, is a Maltese national, who was born in 1944 and lives in Sliema . He is represented before the Court by Dr S. Grech and Dr I. Refalo , lawyers practising in Valletta.

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

The applicant was originally the owner of one half undivided share of the premises at nos. 295 and 296 in Republic Street, Valletta, used as a shop, which he inherited on an unspecified date before 1980. The other half undivided share belonged to G & F.

The premises had been leased by the applicant ’ s predecessors in title by means of an agreement signed on 22 January 1922 in virtue of which the premises were leased for a period of four years at the rent of one hundred pounds sterling (GBP 100) per annum. At the time the owners leased the tenement, the duration and conditions thereof were regulated entirely according to the agreement reached between the parties.

Act I of 1925 entitled ‘ An Act to make special temporary provisions respecting rent and conditions in re-letting immoveable urban property ’ came into force while the lease in question was still running. In accordance with its Article 3 the landlord could not resume possession of the premises at the end of the lease, or increase the rent unless the landlord sent a judicial letter to the tenant to that effect one month prior to the termination of the lease (which judicial letter could be contested by the tenant). In the absence of a judicial letter the lease would be renewed automatically under the same conditions, for a limited time frame (according to what is today Article 1536 of the Civil Code).

In the present case, the owners did not send a judicial letter prior to the termination of the lease, in 1926, it was therefore renewed for four years.

In 1929 Act XXIII entitled “An Act to make temporary provisions respecting the rent and the conditions in re-letting immovable urban property and for purposes connected therewith” abolished the procedure of notification by way of judicial letter. It thus became impossible for the landlord to refuse to renew the lease or increase the rent unless the landlord sought authorisation of the Rent Regulation Board (RRB). Furthermore, a landlord could only resume possession if he or she proved to the Board that the tenant had failed to pay the rent or that the landlord (or his, ascendants, or descendants) required the premises for their own personal needs.

In 1933 Act XXI (today Chapter 69 of the Laws of Malta) made the tenant ’ s protection perpetual, with the lease being renewed indefinitely.

The owners of the premises at issue were thus forced to continue leasing the commercial premises at the same rent applicable in 1922 and in their situation they had no legal grounds to evict the tenant.

In 1964 the owners managed to negotiate a rent of GBP 150.

By a contract of 11 September 1980 G & F and the applicant partitioned the property, each keeping half of the shop with a separate entrance, thus the applicant became the full owner of the interconnected shop at no. 296.

At around the same time, following two successions and two contracts whereby part of the tenancy rights were transferre d, the tenancy of the shop nos. 295/296 came into the hands of another three tenants K. I. and V. The latter were not recognised by the landlords. Moreover, it appeared that they had also entered into agreements with third parties affecting the running of the shop.

The landlords instituted proceedings before the RRB requesting the termination of the lease due to an unauthorized subletting and due to structural changes the tenants made to the shop.

The RRB rejected the landlords ’ demands on l5 March 2001. The landlords did not appeal given the state of the law at the time and the interpretation being given by the domestic courts in similar cases.

The landlords continued to refuse rent which as of 18 April 2001 began to be deposited in court. The first deposit was made on the 18 of April 2001 and was for the amount of 2,828.84 Maltese liri (MTL) which covered the rent from 22 January 1982 until 22 January 2001. Subsequent deposits were made for MTL l50 (approximately 395 euros (EUR)) per annum, to cover the period until the end of December 2009.

When Act X of 2009 was enacted the rent was increased by law at the rate of 15% per annum for the period between 1 January 2010 and 1 December 2013. Thus, for the years 2010-2013 the annual rent of the entire shop (nos. 295/296) was EUR 401.82, EUR 462.09, EUR 531.41 and EUR 611.11 respectively. For the period commencing 1 January 2014, the rent according to law was to increase according to the Index of Commercial Value of Property (ICVP) which had to be enacted by the competent Minister, or (in default) the rent was to increase by 5% per annum. Since the ICVP was never published the rent increased by 5% every year as follows: EUR 641.67, EUR 673.75, EUR 707.44, EUR 742.81, EUR 779.95 and EUR 818.95 for the years 2014-2019 respectively.

On 22 February 2017 the applicant filed constitutional redress proceedings claiming a breach of his rights under Article l of Protocol No. 1 to the Convention insofar as his interest in the property at no. 296 was concerned. He argued that he was suffering a disproportionate burden given the low amount of rent being received for the commercial premises at issue when compared to the real rental value of the property.

During these proceedings the court-appointed architect valued the sale value of the property in 2017 at EUR 1,500,000 and its rent as being EUR 86,540 annually, having considered its prime location, the nature and good conditions of the premises, as well as the fact that it was a going concern (i.e. an operating business making a profit). In that same year the rent due to the landlords according to the law was approximately EUR 743 annually. According to the same court-appointed architect, having estimated the annual market rents for every year since 1986, the total amount of rent at market prices over the entire period would amount to EUR 1,603,499.

By a judgment of 4 June 2018 the Civil Court (First Hall), in its constitutional competence, found, in line with ECtHR ’ s case law, that the applicant had suffered a violation of his property rights under Article 1 of Protocol No. l to the Convention (but not under the Constitution) given the disproportionate burden he had to carry due to the low amount of rent he was receiving. It awarded him EUR 100,000 by way of compensation for pecuniary and non-pecuniary damage. It apportioned the costs of the lawsuit as to half for the applicant and half for the Attorney General.

In determining compensation it considered, in particular, the fact that premises consisted of a shop in a Republic Street Valletta; the rent paid; the rent increases over the years; the current market value; the disproportion between the rent payable and the market rental value; the fact that the lease will end in 2028 according to law; the years during which the applicant suffered an interference but also the interval of time which passed before the applicant instituted constitutional redress proceedings.

The parties appealed; the applicant appealed in so far as he considered that the redress meted was insufficient and was further reduced by the order to pay part costs. He also requested that the premises be returned to him.

By a judgment of 29 March 2019 the Constitutional Court confirmed the finding of a violation but reduced the compensation to EUR 55,000 (EUR 50,000 in pecuniary damage and EUR 5,000 in non-pecuniary damage). It refused to order the eviction of the tenants – considering it was not the court with the appropriate jurisdiction to do so – but declared that the provisions of Chapter 69 of the Laws of Malta were to be without effect as regards the relations between the applicant and the tenants, and therefore the latter could no longer rely on those provisions to justify their occupation of the premises. As regards costs, it decided that those at fi rst ‑ instance were to remain as apportioned by that court whereas the costs of the applicant and the Attorney General ’ s appeals were to be divided as to half for the Attorney General and half for the applicant whereas the tenants had to bear their costs of their cross-appeal.

In relation to the compensation the Constitutional Court, reiterating that its award could not reflect civil damage which could be awarded by an ordinary civil court, remarked that the value established by the court ‑ appointed architect reflected the rental value for the entire shop whereas the applicant ’ s interest was limited only to the divided part of the shop (no. 29). As to the costs awarded at first instance it noted that since the applicant ’ s constitutional complaints had not been upheld, as opposed to the conventional ones, it was appropriate that he pay the costs for his unsuccessful claim.

The relevant provision of the Reletting of Urban Property (Regulation) Ordinance, Chapter 69 of the Laws of Malta, enacted in June 1931 and subsequently amended, and those of the Civil Code, Chapter 16 of the Laws of Malta, as amended in 2009, are set out in Zammit and Attard Cassar v. Malta (no. 1046/12 , §§ 26-27, 30 July 2015).

COMPLAINTS

The applicant complains that the compensation awarded by the Constitutional Court covered the equivalent of one year ’ s market rental value while the property had been under controlled leases as of the 1920s. He thus considers that he continues to be a victim of a breach of Article 1 of Protocol No. 1 to the Convention. He also considers that he has suffered a violation of Article 13, in so far as the Constitutional Court had not been an effective remedy both because it failed to award adequate compensation and because by not evicting the tenants – who continued to benefit of the commercial premises – it did not allow for the violation to come to an end.

QUESTIONS TO THE PARTIES

1. Has there been a violation of Article 1 of Protocol No. 1 to the Convention in the present case? In particular, did the applicant suffer an individual excessive burden as a result of the impugned interference (see Marshall and Others v. Malta , no. 79177/16, § 39, 11 February 2020) ?

2. Did the applicant have at his disposal an effective domestic remedy for his complaint under Article 1 of Protocol No.1 to the Convention, as required by Article 13 of the Convention (see Marshall and Others , cited above, §§ 71-81) ?