Communicated on 23 March 2016

FOURTH SECTION

Application no. 69287/14 Mary GRECH and others against Malta lodged on 23 October 2014

STATEMENT OF FACTS

A list of the applicants is set out in the appendix.

A. The circumstances of the case

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

1. Background to the case

The applicants are part-owners of the property named “ Assunta ” in Nazzarenu Street, Paola, Malta, which is a twentieth century corner town house having three floors and having in total an area of approximately 135 square metres. The first applicant owns one seventh undivided share thereof. The second and third applicants each own one of twenty eight undivided shares thereof and the fourth applicant owns one of twenty one undivided shares thereof.

The applicants ’ ancestor LM, as owner of the property had granted it on temporary emphyteusis to JS on 31 March 1962 for a period of seventeen years at a yearly ground rent of 45 Maltese liras (MTL), approximately 105 euro (EUR). In 1971 a certain CC had obtained the sub utile dominium of the property from JS.

In March 1979 when the temporary emphyteusis was extinguished CC continued to live in the property as a result of Chapter 158 of the Laws of Malta which provided for the conversion of temporary emphyteusis contracts into lease contracts. The rent under the new lease regime was MTL 86.54, approximately EUR 200.

On 9 April 1986 the property was requisitioned by the State and CC given other accommodation. He handed in the keys to the Housing Department on 29 September 1986.

On 30 October 1986 the Housing Department allocated the property to DL for residential use, at the annual rent of MTL 86. To the applicants ’ knowledge, at the time when the property was allocated to DL, there was no pressing social need for such an allocation. DL and her husband (thereinafter “the occupants”) had come to Malta from the United Kingdom three months prior, and had been living in a house in Senglea . The husband had a job and the house they were formerly resident in was not in danger of being requisitioned, nor had it been granted to them on account of old age.

The then owner refused the rent and did not recognise the tenants.

The tenants thus started paying rent directly to the Housing Department.

Eventually the owners became aware that the occupants were also occupying a portion of an adjacent property (a room previously used as an office), also owned by the applicants in the above mentioned shares, and which was not covered by the requisition order.

The then owners informed the authorities of this but no action ensued.

On an unspecified date, following the death of DL (in whose name the requisition order had been issued) the owners requested that the property be returned to them. They offered the occupants a smaller property in the vicinity as part of the settlement proposal. The deal did not go through.

In 2001 DL ’ s husband also passed away and on 30 January 2002 their son LL requested to be recognized as tenant of the requisitioned premises. On 16 September 2003 the authorities recognized LL as tenant despite the owners ’ objections of 27 March 2002.

Rent continued to be paid as above.

The owners complained to the ombudsman who on 29 October 2003, considered that the authorities had not given sufficient attention to the owners ’ complaints.

On an unspecified date, LL applied for a grant to make alterations to the premises, including to the commercial room the occupants had been occupying without legal title.

The owners became aware of this application ex post facto , and on 21 February 2007 they filed an objection to the proposed development.

The relevant permit to make structural alterations was issued by the Malta Environment and Planning Authority (MEPA) on 16 April 2007. In the applicant ’ s view these structural changes affected the character of the property as well as its value.

2. Constitutional Redress Proceedings

On 28 May 2007 the owners (including the applicants or their predecessors in title) instituted constitutional redress proceedings. They complained of a breach of Article 1 of Protocol No. 1 to the Convention, and requested that the requisition order be annulled, the property returned to them and that compensation be awarded.

Pending proceedings on 11 February 2010 the property was derequisitioned; however the Government admitted that while the property had been abandoned they had not recuperated the keys. On 8 April 2010 the Government offered the owners EUR 4,507.30 as rent for the occupation of the premises. The owners refused the offer which they considered was too low compared to the rental value of the property and the long number of years during which it had been occupied by third parties.

On 28 April 2011 the Civil Court (First Hall) in its constitutional competence found in favour of the owners. It found a violation of Article 1 of Protocol No.1 and being unable to annul the requisition order - it having come to an end pending proceedings - it ordered the defendants to return the property free and unencumbered. It also awarded EUR 7,535 in compensation, with costs against the Government.

The court considered that while the requisition order had been lawful and pursued a legitimate aim, it had failed to strike a fair balance for the purposes of the invoked provision. Indeed the applicants had received a low amount of rent for twenty-four years which had remained unvaried. In establishing compensation, the court had regard to the rental value submitted by the applicant ’ s expert of MTL 250 a month in other words MTL 3,000 yearly, which however included a room which was not subject to the requisition order and thus had to be deducted. This estimate was however not binding on the court. It noted that had the property not been requisitioned, according to Chapter 158 of the laws of Malta, rent would have increased every fifteen years according to inflation (but never amounting to double the original rent). Thus, the applicants would have been due a yearly rent of MTL 86.45 (from 9 April 1986) until 31 March 1994, of MTL 141.09 (approximately EUR 329) until March 2009, and thereafter a rent of MTL 207.39 (approximately EUR 483) until date of judgment, amounting to a rounded up sum of EUR 7,535.

The Government appealed in so far as they had been forced to return the premises (to which they no longer had title) and the owners cross appealed in connection with the award of compensation. The latter noted that although LL had vacated the premises and offered to return the keys, the Government had failed to recoup the keys.

By a judgment of 28 April 2014 the Constitutional Court considered that the first-instance court could not have ordered the return of the property which had already been de-requisitioned. As to the compensation it found that the amount awarded by the first-instance court had been low. Indeed the award of EUR 7,535 reflected the sums that the owners would have been entitled to as rent for the premises according to the provisions of Chapter 158 of the Laws of Malta, and thus it was not an award in compensation for the violation, nor did it reflect an award for the occupation of the premises at undervalued rents. Bearing in mind the social aim pursued by the measure and the fact that the rent paid had been in accordance with the law, as well as the fact that the measure persisted for twenty-four years during which the owners received a low rent compared to its market value, it awarded non pecuniary damage of EUR 5,000 to be added to the pecuniary damage already awarded. Thus, in total it awarded compensation of EUR 12,535 covering both pecuniary and non-pecuniary damage, without prejudice to any claims the applicants may have for material damage sustained in the property, and it ordered that the costs of the proceedings be split equally between the contending parties.

Pending these proceedings, on 21 October 2013, RM predecessor of the second and third applicant passed away. It does not appear that the second and third applicants intervened in the proceedings in his stead, and the judgment was delivered in the name of RM.

3. Subsequent events

Eventually, in or around August 2014, the keys were also returned to the owners, and the property returned to them in a miserable state. The applicants claimed that the property is not habitable and the works started off by LL were never completed. They considered that the Government ’ s lack of regard contributed to the degeneration of the property and that a lot of expenses would have to be incurred and relevant permits obtained to reinstate the building for use.

According to an architect valuation dated 19 August 2014, the property was abandoned halfway through a refurbishment project, leaving it in uninhabitable, unfinished and unmaintained condition, with visible damage, most pertinently as a result of severe water penetration. According to the same report the sale market value of the property with vacant possession, as it stood, was EUR 145,000 and the market value upon completion of works would be EUR 175,000. The estimated rental value of the property (in an unspecified state) in 2014 was EUR 665 a month (EUR 7,980 a year). On the basis of a process of interpolation, rental values for previous years were calculated to be as follows:

Year

Monthly rent (in EUR)

Annual rent (in EUR)

1971

9.32

111.84

1979

16.70

200.40

1987

86.80

1,041.60

1995

184.80

2,217.60

2003

325.60

3,907.20

2011

615

7,380

B. Relevant domestic law

The relevant domestic law and practice can be found in Edwards v. Malta (no. 17647/04, §§ 25-31, 24 October 2006) and Amato Gauci v. Malta (no. 47045/06, §§ 19-25, 15 September 2009).

COMPLAINTS

The applicants complain under Article 1 of Protocol No.1 to the Convention that they could not make use of their property for various years, time during which they received no adequate compensation. They argued that the finding of the domestic courts did not suffice to remove their victim status as they remained inadequately compensated, and the keys of the property had not been returned to them in 2010 at the time of the derequisition, they thus continued to remain victims for a subsequent period for which they had not been compensated. Furthermore, the compensation awarded had been based on rental values established in a law which was also not convention compatible. The applicants also invoke Article 13 in conjunction with Article 1 of Protocol No.1 in connection with the lack of effectiveness of the constitutional redress proceedings.

QUESTIONS TO THE PARTIES

1. Bearing in mind the findings of the Constitutional Court, in particular its award of pecuniary compensation based on Chapter 158 of the Laws of Malta and its order that the parties pay in equal parts the entire costs of the proceedings despite the applicants having been successful in their claims, can the applicants still claim to be a victim of a violation under Article 1 of Protocol No. 1?

2. Did the applicants have at their disposal an effective domestic remedy for their complaint under Article 1 of Protocol No. 1, as required by Article 13 of the Convention? In particular, in circumstances such as those of the present case, have the constitutional jurisdictions, in particular the Constitutional Court, regularly awarded meagre amounts of compensation (referring to both pecuniary and non-pecuniary damage) which were further reduced by the order to pay costs?

3. In the present case, has there been a violation of Article 1 of Protocol No. 1 to the Convention?

Appendix

N o .

Firstname LASTNAME

Birth date

Birth year

Nationality

Place of residence

Representative

Mary GRECH

30/12/1932

1932Maltese

Birkirkara

I. REFALO

Christopher MINTOFF

17/09/1986

1986Maltese

Tarxien

I. REFALO

Stephanie MINTOFF

16/10/1990

1990Maltese

Tarxien

I. REFALO

Lilian WISMAYER

03/10/1954

1954Maltese

Kappara

I. REFALO