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FOURTH SECTION
CASE OF GHIGO v. MALTA
(Application no. 31122/05)
JUDGMENT
STRASBOURG
26 September 2006
This judgment will become
final in the circumstances set out in Article 44 § 2
of the Convention. It may be subject to editorial revision.
In the case of Ghigo v. Malta,
The European Court of Human Rights (Fourth Section), sitting as a
Chamber composed of:
Sir Nicolas Bratza,
President,
Mr J. Casadevall,
Mr G. Bonello,
Mr M.
Pellonpää,
Mr S. Pavlovschi,
Mr L. Garlicki,
Mr J.
Šikuta, judges,
and Mr T.L. Early, Section
Registrar,
Having deliberated in private on 5 September 2006,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
- The case originated in an application (no. 31122/05)
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, Mr
Attilio Ghigo, on 23 August 2005.
2. The applicant was represented by Mr I. Refalo and Ms T.
Comodini Cachia, two lawyers practising in Valetta (Malta). The
Maltese Government (“the Government”) were represented by
their Agent, Mr S. Camilleri, Attorney General.
- On 21 October 2005 the President of the Chamber to
which the case has been allocated decided to communicate the
application to the Government. Under the provisions of Article 29 §
3 of the Convention, it was decided to examine the merits of the
application at the same time as its admissibility.
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The applicant was born in 1928 and lives in Tarxien
(Malta).
A. The background of the case
- Before 1973 the applicant bought a house in Malta,
which he had planned to use as a home for himself and his family. In
order to purchase this building, he had incurred debts. Subsequently,
in 1973 he acquired by donation full ownership of another house, in
Paola. The applicant alleged that he then changed his plans and
wanted to sell the former house in order to pay off his debts and to
move into the house in Paola with his family.
- On 31 March 1984 the house in Paola was seized by the
Government under a requisition order issued by the Director of Social
Housing under the Housing Act (Chapter 125 of the Laws of Malta).
- On 23 August 1984 the applicant was informed that
possession of the house in Paola had been given to a certain Mr G.
- In September 1984 the applicant introduced a judicial
protest against the relevant government department. He alleged that
the issuing of the requisition order and the allocation of his
property to a third party was causing him hardship. In a judicial
letter of 8 November 1984, the Director of Social Housing
asked the applicant, in his capacity as owner of the house in Paola,
to recognise Mr. G. as the tenant of the premises (section 8 of the
Housing Act).
- According to the Housing Act, the applicant was
entitled to receive a requisition rent for the use of his property.
However the applicant alleged that no rent had ever been fixed or
offered to him and since the date of the requisition he had received
no compensation.
B. The proceedings before the Civil Court
- The applicant subsequently introduced a claim before
the Civil Court (First Hall). He alleged that the requisition order
and the allocation of his property to a third party was in violation
of Article 1 of Protocol No.1, as incorporated into Maltese law by
Act XIV of 1987 (European Convention Act). The applicant has not
produced the documents pertaining to these proceedings and has not
informed the Court about their outcome.
- On 12 October 1990, while the first proceedings were
still pending, the applicant introduced a second claim before the
Civil Court (First Hall), alleging a breach of his right to the
enjoyment of his property. He requested the Civil Court to issue the
orders and directions needed to redress the violation of his
fundamental rights, including, if necessary, a declaration that the
relevant sections of the Housing Act had been abrogated by the
European Convention Act.
- In a judgment of 30 October 1995, the Civil Court
declared the applicant's claim incompatible ratione temporis with
the provisions of the European Convention Act, as the facts
complained of had occurred before its entry into force on 30 April
1987. The requisition had been effected in accordance with the law
which was in force at the time, and no violation of the applicant's
fundamental rights could be established.
C. The proceedings before the Constitutional Court
- The applicant appealed to the Constitutional Court.
- In a judgment of 28 February 2005, the Constitutional
Court rejected the applicant's claim.
- It considered that the situation complained of was a
continuing one and the applicant was accordingly affected by it after
30 April 1987. Therefore, the facts of the case fell within the
competence of the domestic courts.
- As to the merits of the applicant's claim, the
Constitutional Court noted that the only evidence produced by the
applicant was a report of his architect, which stated that the rental
value of the house was 120 Maltese Liras (MLT) (approximately
288 euros (EUR)) per year at the time of the requisition, and MLT 250
(approximately EUR 600) per year at the date of the report (28
October 1993). However, when the defendant declared that the rental
value as fixed by the Land Valuation Officer was MLT 23
(approximately EUR 55) per year, the applicant did not produce any
new evidence in rebuttal. According to the Constitutional Court, this
constituted a manifest fault on the applicant's part. Furthermore, he
never initiated proceedings before the Rent Regulation Board for the
determination of a fair rent for his house.
- The Constitutional Court also noted that in the
implementation of policies of a socio-economic nature the margin of
appreciation of the State was very wide. It quoted the case of Connie
Zammit v. Malta (no. 16756/90, Commission's report of 12
January 1991) and an excerpt from van Dijk's and van Hoof's book
“Theory and Practice of the European Convention”
concerning the interpretation of the notion of “general
interest”. In the light of the above, the Constitutional Court
held that the applicant had proved neither the hardship he alleged
nor a violation of Article 1 of Protocol No.1.
II. RELEVANT DOMESTIC LAW
A. The definition of requisition
- According to section 2 of the Housing Act requisition
means:
“to take possession of a building or require the
building to be placed at the disposal of the requisitioning
authority.”
B. The grounds for issuing requisition orders
- Until 1989 the Housing Secretary could issue a
requisition order if he was satisfied that such a step was necessary
in the public interest for providing living accommodation to certain
persons or for ensuring a fair distribution of living accommodation.
As in force at the time of the requisition of the applicant's house,
section 3(1) of the Housing Act read as follows:
“The Secretary, if it appears to him to be
necessary or expedient to do so in the public interest or for
providing living accommodation to persons or for ensuring a fair
distribution of living accommodation, may requisition any building,
and may give such directions as appear to him to be necessary or
expedient in order that the requisition may be put into effect or
complied with.”
- After 1989 the authority to issue requisition orders
was given to the Director of Social Housing.
C. The recognition of the third person in occupation
and compensation for the taking of possession
- A requisition order imposes on the owner of the
requisitioned premises a landlord-tenant relationship. According to
section 8(1) of the Housing Act, the Director of Social Housing may
require the owner to recognise the person accommodated in his
property as his tenant or sub-tenant.
- The owner of the premises may seek authorisation for
non-compliance with this request in accordance with section 8(2) and
(3) of the Housing Act, which, in so far as relevant, provides:
“(2) Within thirty days of service on him of
a judicial letter under the last preceding sub-section, the
requisitionee, by application to the First Hall of the Civil Court in
contestation of the Director, may pray for an authorisation of
non-compliance with that request ...
(3) The court shall not grant the authorisation of
non-compliance mentioned in the last preceding sub-section unless the
applicant shows to the satisfaction of the court that serious
hardship would be caused to him by complying with that request:
Provided that the assertion that the requisitionee
wishes to take possession of the building for his own use or for the
use of any member of his family shall not be considered of itself as
a hardship for the purposes of this sub-article.”
- According to the Housing Act, the owner of the
premises has a right to compensation, which is calculated and payable
pursuant to the criteria established in section 11, which, in so far
as relevant, reads as follows:
“(1) Subject as hereinafter provided, the
compensation payable in respect of the requisition of a building
shall be the aggregate of the following sums, that is to say-
(a) a sum equal to the rent which might
reasonably be expected to be payable by a tenant in occupation of the
building during the period for which possession of the building is
retained by virtue of the provisions of this Act, under a letting
granted immediately before the beginning of that period:
Provided that where the building is used by the Director
or by a person accommodated therein after its requisition as a
dwelling house within the meaning of the Rent Restriction (Dwelling
Houses) Ordinance, the rent shall not exceed the fair rent as defined
in article 2 of the aforesaid Ordinance;
(b) a sum equal to the cost of making good any
damage to the building which may have occurred during the period in
which possession thereof under requisition was retained (except in so
far as the damage has been made good during that period by the
occupant of the requisitioned premises or by a person acting on
behalf of the Director), no account being taken of damage which,
under the provisions of this Act, is the responsibility of the
requisitionee;
(c) a sum equal to the amount of expenses
reasonably incurred, otherwise than on behalf of the Director, for
the purpose of compliance with any directions given by or on behalf
of the Director in connection with the taking of possession of the
building ...”
- According to Article 2 of the Rent Restriction
(Dwelling Houses) Ordinance, “fair rent” means:
“i) in respect of an old house, the rent which
might reasonably be expected in respect of an old house, regard being
had to the average rents prevalent on the 31st March, 1939, as shown
on the registers of the Land Valuation Office in respect of
comparable dwelling houses in the same or in comparable localities:
Provided that where, after the 31st March, 1939,
structural alterations or additions in a house, whether old or new,
have been carried out which, in the opinion of the Board, have
enhanced the rental value of the house and in respect of which or, as
the case may be, of a part of which, no compensation has been paid or
is payable under the provisions of the War Damage Ordinance 1943, and
no amount has been paid or is payable by way of a grant by the
Government of Malta, the rent shall be increased by an amount which,
in the opinion of the Board, corresponds to the enhancement of the
rental value and which shall in no case exceed a return of three and
one quarter per centum a year on the capital outlay on the
alterations or additions (excluding any interest on loans or in
respect of idle capital) or, as the case may be, on the part thereof
in respect of which compensation has not been paid and is not payable
under the provisions of the War Damage Ordinance 1943, and no amount
has been paid or is payable by way of grant by the Government of
Malta, in every case as proven by the landlord to the satisfaction of
the Board or, in default, as assessed by the Board; and
ii) in respect of a new house, a sum equivalent to a
return of three per centum a year on the freehold value of the
site and of three and one quarter per centum on the capital
outlay on construction (excluding any sum which has been paid or is
payable by way of a grant by the Government of Malta and any interest
on loans or in respect of idle capital) as proven by the landlord to
the satisfaction of the Board or, in default, as assessed by the
Board:
Provided that where a payment under the War Damage
Ordinance 1943, is made by or is due from the war damage account in
respect of a former building out of which or on the site of which a
new house is erected in whole or in part, for the purpose of
computing the fair rent of that new house the return on that part of
the capital outlay thus contributed by or due from the war damage
account shall in no case exceed one year's fair rent of the former
building as on 31st March,1939, or three and one quarter
per centum for one year on that part of the capital outlay,
whichever is the less;
(iii) in respect of a scheme house, an annual sum to be
determined by agreement ...”
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1
- The applicant complained that due to a requisition
order he had lost control of his property for a long period of time
and had been obliged to bear the obligations of a landlord vis-à-vis
a third person, without obtaining any compensation. He invoked
Article 1 of Protocol No. 1 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.”
- The Government contested that argument.
Admissibility
1. The Government's objection of non-exhaustion of domestic
remedies
- The Government objected that the applicant had not
exhausted the domestic remedies available to him. In the first place,
he had failed to produce any proof of the facts he was alleging. He
had not proved his intention to reside in his house and the expert
reports had not taken into consideration the domestic laws
controlling rents. Furthermore, the applicant omitted to file an
action for judicial review of the requisition order. Finally, he
never claimed compensation before the domestic courts.
- The applicant submitted that all the relevant facts
had been proved before the domestic courts and in the domestic
proceedings the Government had never raised an objection on this
point and had never pleaded that ordinary remedies were available to
an applicant in his situation. All the relevant facts had been
established on the basis of the official documents produced by the
Government, by the applicant's judicial protest and by the report of
the court-appointed architect. It was true that the applicant had not
produced evidence of the hardship caused to him by the requisition
order. However, to require proof of such would be inconsistent with
the European Court's case-law.
29. In the applicant's opinion, an
application for judicial review would not have provided any redress
for the violation of his rights. In compliance with all the relevant
domestic rules, the applicant had complained to the constitutional
jurisdictions, which would have dismissed the case had they found
that he had other ordinary remedies at his disposal.
30. The Court reiterates that according
to Article 35 § 1 of the Convention, it may only deal with an
issue after all domestic remedies have been exhausted. The purpose of
this rule is to afford the Contracting States the opportunity of
preventing or putting right the violations alleged against them
before those allegations are submitted to the Court (see, among other
authorities, Selmouni v. France [GC], no. 25803/94, § 74,
ECHR 1999-V). Article 35 § 1 is based on the assumption,
reflected in Article 13 (with which it has a close affinity), that
there is an effective domestic remedy available in respect of the
alleged breach of an individual's Convention rights (Kudła v.
Poland [GC], no. 30210/96, § 152, ECHR 2000 XI).
- Thus the complaint submitted to the Court must first
have been made to the appropriate national courts, at least in
substance, in accordance with the formal requirements of domestic law
and within the prescribed time-limits. Nevertheless, the
obligation to exhaust domestic remedies only requires that an
applicant make normal use of remedies which are effective, sufficient
and accessible in respect of his Convention grievances (Balogh
v. Hungary, no. 47940/99, § 30, 20 July 2004). The
existence of such remedies must be sufficiently certain not only in
theory but also in practice, failing which they will lack the
requisite accessibility and effectiveness (Mifsud v. France
(dec.) [GC], no. 57220/00, ECHR 2002 VIII).
- The Court would emphasise that the application of the
rule of exhaustion must make due allowance for the fact that it is
being applied in the context of machinery for the protection of human
rights that the Contracting Parties have agreed to set up.
Accordingly, it has recognised that Article 35 must be applied with
some degree of flexibility and without excessive formalism. It has
further recognised that this rule is neither absolute nor capable of
being applied automatically; in reviewing whether it has been
observed it is essential to have regard to the particular
circumstances of each individual case (Akdivar and Others
v. Turkey, judgment of 16 September 1996, Reports of
Judgments and Decisions 1996-IV, p. 1211, § 69, and
Sammut and Visa Investments v. Malta (dec.),
no. 27023/03, 28 June 2005).
- In the present case, the applicant instituted
constitutional proceedings before the Civil Court alleging a breach
of his right to the enjoyment of his possessions as guaranteed by
Article 1 of Protocol No. 1. He furthermore appealed to the
Constitutional Court against the Civil Court's judgment rejecting his
claim. The Court considers that in raising his complaint before the
domestic constitutional jurisdictions, the applicant has made normal
use of the remedies which were accessible to him and which related,
in substance, to the facts complained of at the European level (see,
mutatis mutandis, Zarb Adami v. Malta (dec.), no.
17209/02, 24 May 2005 and Sammut and Visa Investments, cited
above). On that account, the applicants having sought redress for
their complaint before the highest judicial authority could not be
expected to take separate judicial review proceedings to contest the
requisition order, even supposing that such a remedy was still
available to them.
- It follows that the application cannot be rejected for
non exhaustion of domestic remedies and that the Government's
objection should be dismissed.
2. Other grounds for declaring the application
inadmissible
- The Court notes that the application is not manifestly
ill-founded within the meaning of Article 35 § 3 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 Government
- The Government considered that the applicant had not
been deprived of his possessions; nor had there been a de facto
expropriation. The requisition order and the rent-control measure
were matters of housing and social policy, which constituted a
control of use of property in the general interest aimed at ensuring
a just distribution and use of housing resources as well as a better
use and preservation of old houses in a densely populated and small
country where land available for construction was severely limited in
relation to demand.
- As the requisition order could have been withdrawn by
the Department of Social Accommodation on the basis of its assessment
of prevailing circumstances, the applicant did not necessarily lose
all possibilities of selling the premises. The Government further
noted that from 1995 the power to requisition premises had ceased.
However, the requisitions already in place had to be maintained in
the general interest in order to provide accommodation to current
occupiers.
- The Government pointed out that prior to the
requisition order the applicant had not resided in the premises. They
had been rented out to a third party who did not live in them. The
applicant had not produced any proof that he had been in the process
of evicting his former tenant. Therefore, it could not be said that
he suffered a violation of his right of property by virtue of the
substitution of one tenant who did not live in the premises by
another occupier who lived in them. Furthermore, the veracity of the
applicant's claim that he had wanted to move into his house was open
to doubt since, even though he had had full possession of it during
the ten years preceding its requisition, he had not shown any such
intention.
- The Government emphasised that “decontrolled”
dwelling houses were not subject to requisition. In 1959 owners had
been given the right to “decontrol” their property which
was either occupied by them, or not ready for habitation, or was in
the process of structural alterations for conversion into larger
dwelling houses. In 1984 when the requisition in question occurred,
requisition of dwelling houses could only be effected in respect of
dwellings which were not inhabited or occupied by their owners in
1959.
- According to the Government, the interference
complained of did not impose an excessive individual burden on the
applicant. Requisition was a legal means to force the owners of old
empty buildings, who would not have been subjected to particular
financial hardship if they had rented out their properties, to rent
them out.
- The Government noted that the applicant, who
complained that a landlord-tenant relationship had been imposed on
him, had never recognised his tenant. However, he had not alleged
that he had been forced to carry out or to pay for any maintenance
and repairs, and the present good state of the house was most
probably attributable to the care of the current occupier.
Furthermore, there was no difference between the legal obligations
which the applicant had towards his former tenant and those which he
had vis-à-vis the Director of Social Housing and which
he might have towards the current occupier, if recognised by him. The
tenancy conditions were those applicable under the rent laws.
Similarly, the amount of rent payable was the same as would have been
allowable had the old building been rented out voluntarily by the
owner before 1995.
- The Government acknowledged that controlled rents did
not reflect the market value of the affected properties. However,
these low rents were based on legitimate policy grounds, such as
prevention of homelessness and protection of the dignity of
individuals who would not have been able to afford reasonably priced
accommodation. Moreover, the applicant had not proved that the
compensation granted to him was disproportionately low; nor had he
ever claimed the rent owing to him. He had also failed to request the
Rent Regulation Board to fix a fair rent for the premises at an
amount higher than that established by the Land Valuation Officer.
- The Government submitted that the applicant enjoyed
adequate procedural safeguards to ensure that the operation of the
system and its impact on his property rights were neither arbitrary
nor unforeseeable. It was true that, in order to avoid evasive
actions which would have made the Housing Act ineffective, owners
were not given notice of requisitions. However, requisition orders
were subject to judicial review like all ordinary administrative
actions. Indeed, the applicant had his claims heard before the
Maltese courts in 1990, notwithstanding that the requisition order
had been issued in 1984. Referring to domestic case-law on the
matter, the Government finally noted that there were cases where
requisitions had been annulled as it was found that they had not been
issued in the public interest.
(b) The applicant
- The applicant submitted that the requisition order had
been issued arbitrarily and without prior notice. He had not been
able to do anything to influence this decision, which immediately
dispossessed him of his property and imposed on him a landlord-tenant
relationship. The applicant considered that he was confronted with a
fait accompli and that he did not have at his disposal
adequate procedural safeguards ensuring that the operation of the
system was neither arbitrary nor unforeseeable. Even the process of
selection of the tenant had been arbitrary.
- The fact that as from 1995 the law no longer allowed
requisition orders did not minimise the severity of the interference
complained of. The applicant's property was still under requisition
and there was no indication that this situation would change.
- In the applicant's opinion, the requisition of his
house was not proportionate to the aims sought to be achieved. He
underlined that he had lost possession of the house shortly after he
had inherited it and while he was preparing to move into it with his
family. No compensation had ever been paid to him, thus causing him
financial hardship. Furthermore, even if the rent had been paid to
him, it would have amounted to the rental value which applied
ninety-two years ago.
- The applicant also noted that the current tenant had
always been in full employment and that the Government had not shown
that the latter was so poor that he would be made homeless if he had
to leave the property. Even if nothing in the present case justified
the fixing of the rent at a level lower than the market rent, the
applicant was entitled to compensation of MTL 23 (approximately
EUR 55) per year, which only represented 1.9% of the market rent
which could have been obtained in 2005. The applicant alleged that he
had no means to seek a change in the rent, which was established by
law.
2. The Court's assessment
(a) Applicable rules in Article 1 of Protocol
No. 1
- As the Court has stated on a number of occasions,
Article 1 of Protocol No. 1 comprises three distinct rules: the first
rule, set out in the first sentence of the first paragraph, is of a
general nature and enunciates the principle of the peaceful enjoyment
of property; the second rule, contained in the second sentence of the
first paragraph, covers deprivation of possessions and subjects it to
certain conditions; the third rule, stated in the second paragraph,
recognises that the Contracting States are entitled, inter alia,
to control the use of property in accordance with the general
interest. The three rules are not, however, distinct in the sense of
being unconnected. The second and third rules are concerned with
particular instances of interference with the right to peaceful
enjoyment of property and should therefore be construed in the light
of the general principle enunciated in the first rule (see, among
other authorities, James and Others v. the United
Kingdom, judgment of 21 February 1986, Series A no. 98,
pp. 29-30, § 37, Beyeler v. Italy [GC], no.
33202/96, § 98, ECHR 2000-I, and Saliba v. Malta,
no. 4251/02, § 31, 8 November 2005).
- The Court observes that in the present case, by
requisitioning and assigning his property to others, the applicant
has been prevented from exercising his right of use of the property
as the house has been occupied by tenants. Also, his right to receive
a market rent and to terminate leases has been substantially
affected. However, the applicant has never lost his right to sell his
property, nor have the authorities applied any measures resulting in
the transfer of his ownership of the property.
- In the Court's view, the measures taken by the
authorities were aimed at subjecting the applicant's house to a
continuing tenancy and not at taking it from him permanently.
Therefore, the interference complained of cannot be considered a
formal or even de facto expropriation, but constituted a means
of State control of the use of property. It follows that the case
should be examined under the second paragraph of Article 1 of
Protocol No. 1 (see Hutten-Czapska v. Poland [GC], no.
35014/97, §§ 160-161, 19 June 2006).
(b) Whether the Maltese authorities
respected the principle of lawfulness
- The first and most important requirement of Article 1
of Protocol No. 1 is that any interference by a public authority with
the peaceful enjoyment of possessions should be lawful. In
particular, the second paragraph of Article 1, while recognising that
States have the right to control the use of property, subjects their
right to the condition that it be exercised by enforcing “laws”.
Moreover, the principle of lawfulness presupposes that the applicable
provisions of domestic law are sufficiently accessible, precise and
foreseeable in their application (see, mutatis mutandis,
Broniowski v. Poland [GC], no. 31443/96, § 147, ECHR
2004-V, and Saliba, cited above, § 37).
- In the present case, it is not disputed by the parties
that the requisition of the applicant's house had been carried out in
accordance with the provisions of the Housing Act. The latter defines
the notion of “requisition” (see paragraph 18 above) and
indicates the grounds for issuing requisition orders (paragraph 19
above). Furthermore, the legal and financial consequences of the
requisition, notably the imposition of a landlord-tenant relationship
and the criteria for calculating the compensation due to the owner of
the premises, are stated in the Housing Act (see paragraphs 21-24
above). There is nothing to show that these provisions are unclear
and/or not foreseeable.
- The measure complained of was, therefore, “lawful”
within the meaning of Article 1 of Protocol No. 1. It remains to be
ascertained whether it pursued a legitimate aim in the general
interest and whether a “fair balance” had been struck
between the means employed and the aim sought to be realised.
(c) Whether the Maltese authorities
pursued a “legitimate aim in the general interest”
- Any interference with the enjoyment of a right or
freedom recognised by the Convention must pursue a legitimate aim.
The principle of a “fair balance” inherent in Article 1
of Protocol No. 1 itself presupposes the existence of a general
interest of the community (see Broniowski, cited above,
§ 148).
- Because of their direct knowledge of their society and
its needs, the national authorities are in principle better placed
than the international judge to appreciate what is in the “general”
or “public” interest. Under the system of protection
established by the Convention, it is thus for the national
authorities to make the initial assessment as to the existence of a
problem of public concern warranting measures to be applied in the
sphere of the exercise of the right of property. Here, as in other
fields to which the safeguards of the Convention extend, the national
authorities accordingly enjoy a margin of appreciation.
- The notion of “public” or “general”
interest is necessarily extensive. In particular, spheres such as
housing of the population, which modern societies consider a prime
social need and which plays a central role in the welfare and
economic policies of Contracting States, may often call for some form
of regulation by the State. In that sphere decisions as to whether,
and if so when, it may fully be left to the play of free market
forces or whether it should be subject to State control, as well as
the choice of measures for securing the housing needs of the
community and of the timing for their implementation, necessarily
involve consideration of complex social, economic and political
issues (Hutten-Czapska, cited above, §§
165-166).
- Finding it natural that the margin of appreciation
available to the legislature in implementing social and economic
policies should be a wide one, the Court has on many occasions
declared that it will respect the legislature's judgment as to what
is in the “public” or “general” interest
unless that judgment is manifestly without reasonable foundation (see
Immobiliare Saffi v. Italy, [GC], no. 22774/93, §
49, ECHR 1999-V, and, mutatis mutandis, Broniowski,
cited above, § 149).
- In the present case, the Court can accept the
Government's argument that the requisition and the rent control were
aimed at ensuring the just distribution and use of housing resources
in a country where land available for construction could not meet the
demand. These measures, implemented with a view to securing the
social protection of tenants (see, mutatis mutandis,
Hutten-Czapska, cited above, § 178), were also
aimed at preventing homelessness, as well as at protecting the
dignity of poorly-off tenants (see paragraphs 36 and 42 above).
- The Court accepts that the impugned legislation had a
legitimate aim in the general interest, as required by the second
paragraph of Article 1.
(d) Whether the Maltese authorities struck
a fair balance between the general interest of the community and the
applicant's right to the peaceful enjoyment of his possessions
- Not only must an interference with the right of
property pursue, on the facts as well as in principle, a “legitimate
aim” in the “general interest”, but there must also
be a reasonable relation of proportionality between the means
employed and the aim sought to be realised by any measures applied by
the State, including measures designed to control the use of the
individual's property. That requirement is expressed by the notion of
a “fair balance” that must be struck between the demands
of the general interest of the community and the requirements of the
protection of the individual's fundamental rights (see Saliba,
cited above, § 37).
- The concern to achieve this balance is reflected in
the structure of Article 1 of Protocol No. 1 as a whole. In each
case involving an alleged violation of that Article the Court must
therefore ascertain whether by reason of the State's interference the
person concerned had to bear a disproportionate and excessive burden
(see James and Others, cited above, p. 27, § 50;
Mellacher and Others v. Austria, judgment of 19 December 1989,
Series A no. 169, p. 34, § 48; Spadea and Scalabrino v.
Italy, judgment of 28 September 1995, Series A no. 315 B,
p. 26, § 33).
- In assessing compliance with Article 1 of Protocol No.
1, the Court must make an overall examination of the various
interests in issue, bearing in mind that the Convention is intended
to safeguard rights that are “practical and effective”.
It must look behind appearances and investigate the realities of the
situation complained of. In cases concerning the operation of
wide-ranging housing legislation, that assessment may involve not
only the conditions for reducing the rent received by individual
landlords and the extent of the State's interference with freedom of
contract and contractual relations in the lease market but also the
existence of procedural safeguards ensuring that the operation of the
system and its impact on a landlord's property rights are neither
arbitrary nor unforeseeable. Uncertainty – be it legislative,
administrative or arising from practices applied by the authorities –
is a factor to be taken into account in assessing the State's
conduct. Indeed, where an issue in the general interest is at stake,
it is incumbent on the public authorities to act in good time, in an
appropriate and consistent manner (see Immobiliare Saffi,
cited above, § 54, and Broniowski, cited above, §
151).
- In the present case, the applicant's house was seized
without prior notice by the Government through a requisition order on
31 March 1984 (see paragraph 6 above). Approximately five months
later, on 23 August 1984, the applicant was informed that his house
had been allocated to a certain Mr G. (see paragraph 7 above).
- The Court notes that a requisition order imposes on
the owner of the premises concerned a landlord-tenant relationship
(see paragraph 21 above). While this can be seen as creating a
quasi-lease agreement between a landlord and a tenant, landlords have
little or no influence on the choice of the tenant or the essential
elements of such an agreement (see, mutatis mutandis,
Hutten-Czapska, cited above, § 196). In
particular, the owner may seek authorisation for non-compliance with
the Director of Social Housing's request to recognise the tenant only
if he is able to show “to the satisfaction of the court that
serious hardship would be caused to him by complying with that
request”. The wish to take possession of the building for the
owner's use or for the use of any member of his family cannot amount,
in itself, to hardship (see section 8(2) and (3) of the Housing Act –
paragraph 22 above). Therefore, it was not open to the applicant to
obtain restitution of his property solely on the basis that he needed
to move into the house in Paola with his family (see paragraph 5
above).
- The Court further observes that the applicant claimed
that he never received any compensation for the loss of the control
over his property (paragraphs 9 and 46 above). In any event, the
rental value established by the Land Valuation Officer was MTL 23
(approximately EUR 55) per year (see paragraph 16 above). The
Government themselves acknowledged that controlled rents did not
reflect the market value of the properties affected (see paragraph 42
above).
- Even assuming that the applicant was not made to cover
the costs of extraordinary maintenance and repairs of the building as
required by law,
the Court cannot but note that the sum at issue
– amounting to less than EUR 5 per month – is extremely
low and could hardly be seen as fair compensation for the use of a
house. The Court is not convinced that the interests of the
landlords, "including their entitlement to derive profits from
their property" (see Hutten-Czapska, cited above,
§ 239), have been met by restricting the owner to a return of
less that EUR 5 per month from his property.
It is true that the Government reproached the
applicant for his failure to institute proceedings before the Rent
Regulation Board to fix a fair rent for the premises (see paragraph
42 above). However, it has not been shown by any concrete examples
from domestic law and practice that this remedy would have been an
effective one. Moreover, it is to be recalled that when the applicant
had produced a report from his architect stating that the yearly
rental value of the house was MTL 120 (approximately EUR 288) in
1984 and MTL 250 (approximately EUR 600) in 1993, the Constitutional
Court concluded that he had failed to produce evidence in rebuttal of
the defendant's statement that the rent due was MTL 23 per year (see
paragraph 16 above).
- As the Court has already stated on many occasions, in
spheres such as housing of the population, States necessarily enjoy a
wide margin of appreciation not only in regard to the existence of
the problem of general concern warranting measures for control of
individual property but also to the choice of the measures and their
implementation. The State control over levels of rent is one such
measure and its application may often cause significant reductions in
the amount of rent chargeable (see, in particular, Mellacher and
Others, cited above, § 45).
- Moreover, in situations where the operation of the
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, mutatis mutandis, Hutten-Czapska, cited
above, § 223).
- In the present case, having regard to the extremely
low amount of the rental value fixed by the Land Valuation Officer,
to the fact that the applicant's premises have been requisitioned for
more than twenty-two years, as well as to the above-mentioned
restrictions of the landlord's rights, the Court finds that a
disproportionate and excessive burden has been imposed on the
applicant. The latter had been requested to bear most of the social
and financial costs of supplying housing accommodation to Mr G.
and his family (see, mutatis mutandis, Hutten-Czapska,
cited above, § 225). 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.
- There has accordingly been a violation of Article 1 of
Protocol No. 1.
II. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- 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
- The applicant primarily requested that the requisition
order be revoked.
- He also claimed pecuniary damage, amounting to MTL
10,998 (approximately EUR 26,395), a sum representing the losses in
rent he had suffered from 1984 to 2005. To this amount should be
added the following sums: MTL 1,972.72 (approximately EUR 4,734) for
losses suffered due to inflation; interest at a rate of 8 per cent
for lack of yearly payments; MTL 1,200 (approximately EUR 2,880)
– increased by the cost of living index – for each year
after the introduction of the application in Strasbourg; MTL 1,200
(approximately EUR 2,880) – increased by the cost-of-living
index plus a further increase of 5 per cent every three years –
for each year that passed before the property was re-assigned to him.
- The applicant further claimed MTL 5,000 (approximately
EUR 12,000) in respect of non-pecuniary damage.
- The Government submitted that the sums claimed were
excessive and did not take into consideration the fact that the
legislature had a right to control the amount of rents in the general
interest. Moreover, even if the premises had never been
requisitioned, the applicant would have received a rent established
by the Rent Regulation Board, which would have been equal to the rent
paid in 1984 by any other tenant. In the Government's view, no
interest was due to the applicant since he had failed to claim
interest by judicial letter, as required by domestic law.
- As regards non-pecuniary damage, the Government
considered that the applicant's claim should be rejected. They
observed that the applicant had not proved any of his assertions and
did not enjoy vacant possession of the premises at the time of the
requisition.
- The Court first recalls that it is not empowered under
the Convention to direct the Maltese State to annul or revoke the
requisition order (see, mutatis mutandis, Sannino v. Italy,
no. 30961/03, § 65, 27 April 2006, Findlay v. the United
Kingdom, judgment of 25 February 1997, Reports 1997-I,
p. 284, § 88, and Albert and Le Compte v. Belgium
(former Article 50), judgment of 24 October 1983,
Series A no. 68, pp. 6-7, § 9).
- Having examined the circumstances of the case, it
considers that the question of compensation for pecuniary damage
and/or non-pecuniary damage is not ready for
decision. That question must accordingly be reserved
and the subsequent procedure fixed, having due regard to any
agreement which might be reached between the respondent Government
and the applicant (Rule 75 § 1 of the Rules of Court).
B. Costs and expenses
- The applicant claimed MTL 828.81 (approximately EUR
1,989), as per a taxed bill, for the costs and expenses incurred
before the domestic courts and MTL 874.85 (approximately EUR 2,099)
for those incurred before this Court.
- The Government submitted that the costs of the
domestic proceedings should not be borne by the State since the
applicant had failed to produce any evidence substantiating his
claims before the Maltese courts. The costs and expenses sought in
the Convention proceedings were excessive.
- According to the Court's case-law, an applicant is
entitled to reimbursement of his costs and expenses only in so far as
it has been shown that these have been actually and necessarily
incurred and were reasonable as to quantum. In the present case,
before introducing his application in Strasbourg, the applicant
presented a constitutional claim alleging a violation of his right of
property before the Civil Court. He also appealed against the
latter's decision to the Constitutional Court. The Court therefore
accepts that the applicant had incurred some expenses in order to put
right the breach of his fundamental rights (see, mutatis mutandis,
Sannino, cited above, § 75, and Rojas Morales
v. Italy, no. 39676/98, § 42,
16 November 2000). Regard being had to the information in its
possession and the above criteria, the Court considers it reasonable
to award the sum sought by the applicant (EUR 4,088) covering
costs under all heads, plus any tax that may be chargeable on this
amount.
C. Default interest
- The Court considers it appropriate that the default
interest 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
- Declares the application admissible;
- Holds that there has been a violation of Article
1 of Protocol No. 1;
- Holds that, as far as the financial award to the
applicant for any pecuniary or non-pecuniary damage resulting from
the violation found in the present case is concerned, the question of
the application of Article 41 is not ready for decision and
accordingly,
(a) reserves the said question as a whole;
(b) invites the Government and the applicant to
submit, within six months from the date on which this judgment
becomes final in accordance with Article 44 § 2
of the Convention, their written observations on the matter and, in
particular, to notify the Court of any agreement that they may reach;
(c) reserves the further procedure and delegates
to the President of the Section the power to fix the same if need be;
- Holds
(a) that the respondent State is to pay the applicant,
within three months from the date on which the judgment becomes final
in accordance with Article 44 § 2 of the
Convention, EUR 4,088 (four thousand and eighty-eight euros), to be
converted into Maltese liras at the rate applicable at the date of
settlement, in respect of costs and expenses, plus any tax that may
be chargeable;
(b) that from the expiry of the above-mentioned three
months until settlement simple interest shall be payable on the above
amount at a rate equal to the marginal lending rate of the European
Central Bank during the default period plus three percentage points.
Done in English, and notified in writing on 26 September 2006,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
T.L. Early Nicolas Bratza
Registrar President
