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FOURTH SECTION
CASE OF FLERI SOLER AND CAMILLERI v. MALTA
(Application no. 35349/05)
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 Fleri Soler and Camilleri 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,
Ms L. Mijović,
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. 35349/05)
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 two Maltese nationals, Mrs
Anna Fleri Soler and Mr Herbert Camilleri, on 10 September 2005.
2. The applicants were represented before the Court by Mr J.
Brincat, a lawyer practising in Marsa (Malta). The Maltese
Government (“the Government”) were represented by their
Agent, Mr S. Camilleri, Attorney General.
- On 28 November 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 applicants were born in 1932 and 1934,
respectively, and live in Malta.
A. The background of the case
- The applicants claimed to be the owners of a building
in Valletta, Malta. The Government contested this claim. They
underlined that it appeared from the relevant records and from a
letter written by the applicants themselves on 29 July 2005, that the
premises were only acquired by the applicants' late father, Mr Joseph
Camilleri, through a public deed of 19 March 1943. This contract
had transferred the property on perpetual emphyteusis with effect
from 1 March 1941. The said deed included a clause stating as
follows:
“As the said house has been requisitioned by the
Government it is hereby agreed that the period of five (5) years
mentioned in this condition (an obligation to carry out improvements)
will run from the date on which the keys of the said house shall have
been re-delivered by the Government to the said Joseph Camilleri.”
6. Having taken note of the
disagreement of the parties on this point, the Court will
nevertheless refer in the present judgment to the building at issue
as “the applicants' premises [or building or property]”.
- On 4 September 1941 the authorities requisitioned the
applicants' premises. The Government allocated the property first to
the Department of Education, then to the Ministry of Industry and
Agriculture. The applicants' building was used as public offices.
- The yearly rent due at the time of the requisition
according to the Emergency Compensation Board was 89 Maltese Liri
(MTL – approximately 213 euros (EUR)). In 1989, the Rent
Regulation Board decided that it should be increased to MTL 340.53
(approximately EUR 817) per year. The applicants regularly
received this rent, which was still being paid to them at the date of
the introduction of the application (10 September 2005).
B. The proceedings before the Civil Court
- On 13 March 1997 the applicants applied to the Civil
Court (First Hall) in its constitutional jurisdiction. They argued
that the continuous requisition of their building amounted to a de
facto expropriation. Furthermore, they observed that even
assuming that the measure complained of could be considered to be
aimed at controlling the use of property, the Government should
nevertheless have been subject to the ordinary laws of landlord and
tenant. However, when a forced tenancy was established with the
Government, the usual remedies available to the ordinary landlord
against a tenant were excluded, and the landlord-tenant relationship
could not be terminated under the usual conditions. Thus, for
example, while a lease in favour of an individual or a family might
terminate in the absence of descendants or relatives entitled to
succeed, a Government, while it may change, remained a Government and
thus a lessee in perpetuity. In view of the above, the applicants
alleged a breach of Article 1 of Protocol No.1, taken alone and/or
read in conjunction with Article 14 of the Convention.
- In a judgment of 26 November 2003, the Civil Court
rejected the applicants' claim. It observed that according to the
European Court of Human Rights' case-law, there could be a
deprivation of property only where all the legal rights of the owner
had been extinguished. In the present case, the applicants were still
receiving the rent due and they had not been deprived of their right
of ownership. Therefore, the requisition of their building could not
be considered an expropriation.
- In the Civil Court's view, the measure complained of
was aimed at controlling the use of property. The Government had the
power to interfere with the right of property in accordance with the
general interest provided that the authorities' actions satisfied a
“fair balance” test.
- According to the European Commission's findings in the
case of Connie Zammit v. Malta (no. 16756/90,
Commission's Report of 12 January 1991), in the implementation of
policies of a socio-economic nature, the margin of appreciation of
the State was very wide. The Civil Court found that in the present
case the occupation of the premises by the Government fell within the
notion of the public interest.
- With regard to the claim of discrimination, the Civil
Court acknowledged that the applicants were burdened with a perpetual
tenant and that the Government could no longer issue requisition
orders after 1995. However, referring to the Case relating to
certain aspects of the laws on the use of languages in education in
Belgium (judgment of 9 February 1967, Series A no. 5), the Civil
Court held that these facts did not amount to a violation of Article
14 of the Convention, since the difference in treatment was
proportionate and based on reasonable and objective justification. It
moreover noted that the fact that further requisitions could not be
made did not mean that those in force should not subsist, especially
since the public interest justifying them had not ceased to exist.
C. The proceedings before the Constitutional Court
- The applicants appealed to the Constitutional Court.
They claimed that the requisition constituted a de facto
expropriation and not a control of the use of property. Moreover, it
had not been carried out in the general interest since the
applicants' building was being used by the Government as offices and
had not been allocated to private individuals needing social housing.
The measure complained of was therefore disproportionate and the
Government had abused their powers for their own benefit.
- The applicants further observed that they were
discriminated against, since the Government were abusing their power
and frustrating the applicants' right to seek a remedy. They invoked
Article 14 of the Convention read in conjunction with Article 1 of
Protocol No.1.
- In a judgment of 18 March 2005, the Constitutional
Court rejected the applicants' appeal and confirmed the Civil Court's
judgment.
- The Constitutional Court reiterated that since the
applicants retained their right of ownership and were still receiving
rent, the measure complained of could not be considered a de facto
expropriation, but was aimed at controlling the use of property.
- The Constitutional Court noted that, as in force at
the time of the issuing of the requisition order, the Housing Act
authorised requisitions either in the general interest or to provide
for social housing needs. In the present case, the use of the
premises as a government department was clearly in accordance with
the public interest.
- The Constitutional Court further recalled that in the
case of Mellacher and Others v. Austria (judgment of 19
December 1989, Series A no. 169), the European Court of Human Rights
had held that any interference with the right of property must
achieve a fair balance and be proportionate to the aims pursued. The
regular payment of rent to the applicants mitigated the effects of
the requisition and sufficed to strike this balance. Moreover, during
the constitutional proceedings the applicants had never complained
that the amount of rent was unfair or unjust compared to the value of
the requisitioned property. It was true that the Government would
probably continue using these premises for an indefinite period of
time; however, it was lawful for the Government to do so for as long
as the building was used in the general interest.
- Lastly, the Constitutional Court observed that the
applicants had never claimed that they urgently needed their property
for themselves or for their families. Thus, according to the
Strasbourg case-law, no “individual and excessive burden”
had been imposed on them.
- As concerned the applicants' complaint under Article
14 of the Convention, the Constitutional Court noted that it was
unclear what form of discrimination the applicants were relying on.
Nor had they clarified the sort of remedies they were unable to use.
In any case, the Government and the applicants were not “persons
in relatively similar situations”. The Constitutional Court
referred on this point to the case of Spadea and Scalabrino v.
Italy (judgment of 28 September, Series A no. 315-B).
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, or 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
applicants' building, 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. In section 3(1) of the
Housing Act, after the words “public interest”, the
conjunction “or” was eliminated and replaced by the words
“but only”.
C. The compensation for the taking of possession
- A requisition order imposes on the owner of the
requisitioned premises a landlord-tenant relationship. 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 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 applicants complained that the requisition of
their building breached 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 that the application is out of time
- The Government submitted that the application was out
of time. They observed that the final domestic decision was the
Constitutional Court's judgment given on 18 March 2005, and thus more
than six months before the date on which the applicants' first letter
was received by the Registry (19 September 2005).
- The applicants submitted that they sent the
application form by courier mail on 10 September 2005.
- The Court first recalls that the first day of a
time-limit is considered to start on the day following the final
decision, whereas “months” are calculated as calendar
months regardless of their actual duration (see K. C. M.
v. the Netherlands, Commission decision of 9 January 1995,
no. 21034/92, Decisions and Reports (DR) 80-A, p. 88). In the
present case, the final domestic decision was pronounced on 18 March
2005. It follows that the six months' time-limit provided for in
Article 35 § 1 of the Convention started to run on the following
day, namely 19 March 2005. Therefore, even if it had been introduced
on 19 September 2005, the present application would have been
submitted on the last day of the said time-limit.
- In any event, the Court also points out that the
requirements of the six months' rule are complied with if the first
communication has been made within the time-limit, although it may
have arrived several days after its expiry (see Angelova v.
Bulgaria (dec.), no. 38361/97, 6 June 2000,
and Erdogdu and Ince v. Turkey [GC], nos.
25067/94 and 25068/94, § 30, ECHR 1999-IV). The applicants'
first communication, enclosing the completed application form was
dated 10 September 2005. The postmark attached to the envelope
containing it shows that the application form was indeed posted on
the same day, and thus before the expiry of the six months'
time-limit provided for by Article 35 § 1 of the Convention.
33. It follows that the application cannot be rejected as being out
of time and the Government's objection should therefore be dismissed.
2. The Government's objection of non-exhaustion of domestic
remedies
- The Government submitted that the applicants had
failed to exhaust domestic remedies in relation to their claim
concerning the lack of proportionality between the rent received by
them and the market value of their building. As rightly observed by
the Constitutional Court, the applicants never made this claim in the
constitutional proceedings.
- The applicants alleged that all available domestic
remedies had been exhausted. They had developed the substance of
their arguments about the lack of proportionality during their oral
pleadings before the Civil Court and the Constitutional Court.
36. 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 applicants instituted
constitutional proceedings before the Civil Court alleging a breach
of their right to the peaceful enjoyment of their possessions. They
furthermore appealed to the Constitutional Court against the Civil
Court's judgment rejecting their claim. As the applicants had invoked
a breach of Article 1 of Protocol No. 1 in its entirety, the domestic
constitutional jurisdictions examined whether all the requirements of
this provision, notably the existence of a “fair balance”
and of a reasonable relationship of proportionality between the means
employed, the aim sought to be achieved and the respect of the
individual's fundamental rights, had been respected.
- The Court considers that in raising this plea before
the domestic constitutional jurisdictions, the applicants have made
normal use of the remedies which were accessible to them 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).
- It follows that the application cannot be rejected for
non exhaustion of domestic remedies and that the Government's
objection should be dismissed.
3. 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.
Merits
1. The parties' submissions
(a) The Government
- The Government first submitted that the premises in
question were already requisitioned and were therefore Government
property when they had been transferred to the applicants'
predecessor. The deed of transfer of the right of perpetual
emphyteusis had made particular reference to the requisition and had
also exempted the acquirer from the obligation to make improvements
for as long as the premises remained subject to the requisition
order. The applicants' father, Mr Joseph Camilleri, had accepted the
contract being aware of this and of the fact that there was no time
limit on the lifting of the requisition order. The restrictions of
the rights of the emphyteuta had also certainly been taken into
consideration when fixing the price of the building.
- The Government emphasised that the applicants had made
a profit from the building because the rent paid to them had always
exceeded the amount which they had to pay in yearly ground rent. The
latter was MTL 53 (approximately EUR 132), while the rent paid
by the Government was MTL 89 in the years 1941-1988 and MTL
340.53 from 1989 onwards. Moreover, while the ground rent was fixed
on a perpetual basis and unalterable, the rent paid by the Government
could be reviewed under the Reletting of Urban Property (Regulation)
Ordinance, and was indeed increased after 1988, with a possibility of
further increases. Under these circumstances, and having regard to
the fact that no premium had been paid to the Government for the
grant of the property on emphyteusis, it cannot be said that any
additional burden had been imposed on the applicants.
- In the Government's view, the above showed that there
had been no interference with the applicants' right to the peaceful
enjoyment of their possessions.
- Without prejudice to the latter statement, the
Government maintained that the use of the premises as offices of a
government department was for the benefit of the community, and
therefore in the general interest.
- The fact that the premises had already been
requisitioned when they were taken over by the applicants' father
meant that the effects of the requisition had been foreseeable and
that he or his descendents could not question this on grounds of
arbitrariness. Given its actual use, it was also foreseeable that the
building would not be released in the near future.
- The Government recalled that requisition order had
been issued by the Housing Secretary and had been notified to the
owners according to law. Moreover, requisitions were subject to
judicial review like any ordinary administrative act. Thus, the
applicants had had at their disposal adequate remedies and procedural
safeguards ensuring that the operation of the system and its impact
on their property rights as landlords were neither arbitrary nor
unforeseeable.
(b) The applicants
- The applicants argued that the measure complained of
amounted to a de facto expropriation since there was no remedy
whereby the property could revert to its owners and the
landlord-tenant relationship with the Government could in effect be
perpetual. As a consequence, the applicants have never had the
opportunity to sell their property on the open-market. This situation
of perpetuity and its effects had also been confirmed in the
Constitutional Court's judgment.
- Moreover, even assuming that the requisition was a
measure aimed at controlling the use of property, the applicants
alleged that it had not been adopted in the public interest as it had
not been designed to provide living accommodation to persons or to
ensure a fair distribution of living accommodation. In the
applicants' view, the Housing Act was not a law of general
application and the way in which the requisitioning had been carried
out had been selective and discriminatory.
- The applicants alleged that it appeared from the
contract signed by their father that the requisition, made in time of
war, had been intended as a temporary measure and that the Government
would at some future stage have handed back the keys. However, this
had not happened. Moreover, the contract at issue took effect from 1
March 1941, when no requisition had yet existed. Interferences of a
short duration during war time would have been in the public
interest; in the present case, however, there had been a continued
interference which was prolonged even after the requisition law had
been abrogated. Furthermore, in 1979 the Government had acquired
properties belonging to the Church and to the British Military when
stationed in Malta. After this date, the use of the applicants'
premises could not be considered legitimate and necessary.
- The applicants also considered that an excessive
individual burden had been imposed on them. They referred on this
point to the long duration of the requisition and to the amount of
rent which had been paid to them. In 1990 the Rent Regulation Board
established the fair rent which was applicable in 1939. They
considered that the latter was far below the market value of their
building, which, according to their calculations, was approximately
EUR 2,000,000.
- Referring to the case of Broniowski v. Poland
([GC], 31443/96, ECHR 2004-V), the applicants submitted that they
found themselves in a situation of uncertainty due to repeated delays
and obstructions for which the State was responsible. This made their
situation incompatible with the obligations undertaken by the State
under the Convention.
- The applicants finally pointed out that requisitions
issued under emergency powers were not notified to the landlords and
remained in force. Thus, the only remedy at their disposal was a
constitutional claim, which became available only in 1987, when the
Convention had been incorporated into domestic 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 in the first place that the parties
disagree as to the nature of the applicants' right to the building in
issue. The applicants claimed to be its owners, while the Government
alleged that they only had a right of perpetual emphyteusis (see
paragraphs 5 and 6 above).
- The Court does not consider it necessary to examine in
detail the views of the parties on this point. It reiterates that the
concept of “possessions” in Article 1 of Protocol No. 1
has an autonomous meaning which is certainly not limited to ownership
of physical goods: certain other rights and interests constituting
assets can also be regarded as “property rights”, and
thus as “possessions” for the purposes of this provision
(see Gasus Dosier- und Fördertechnik GmbH v. the Netherlands,
judgment of 23 February 1995, Series A no. 306-B, p. 46, §
53, and Iatridis v. Greece [GC], no. 31107/96, § 54, ECHR
1999-II). The right of perpetual emphyteusis, which entails the
obligation to pay the annual ground rent and the right to use the
property or, in case of lease, to receive a rent, constitutes such a
“possession”. The Court also underlines that the domestic
constitutional jurisdictions saw no obstacle to the applicability of
Article 1 of Protocol No. 1 to the kind of right asserted by
applicants. Therefore, even assuming that the applicants were
emphyteutae, and not owners, of the building in question, this
provision would in any event be applicable.
- In the present case, the applicants had been prevented
from exercising their right of use in terms of physical possession as
the building had been allocated to State departments. Also, their
right to receive rent and to terminate leases had been substantially
affected. However, the applicants never lost their right to sell
their property or their right of emphyteusis, nor had the authorities
applied any measures resulting in the transfer of ownership.
- In the Court's view, the measures taken by the
authorities were aimed at subjecting the applicants' premises to a
continued tenancy and not at taking it away from them 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 applicants' building had been effected in
accordance with the provisions of the Housing Act. The latter defines
the notion of “requisition” (see paragraph 22 above) and
indicates the grounds for issuing requisition orders (paragraph 23
above). Also, 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 set out in the Housing Act (see paragraphs 25-26
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.
- 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 applicants' premises were
allocated first to the Department of Education, then to the Ministry
of Industry and Agriculture (see paragraph 7 above). As these bodies
were performing their duties in the interests of the community as a
whole, the Court can accept the Government's argument that the
requisition and the rent control were measures taken in the general
interest (see paragraph 46 above).
- The Court therefore accepts that the impugned measures
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
applicants' 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, cited above, 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 applicants' premises were
requisitioned in 1941 and subsequently used as public offices (see
paragraph 7 above).
- The Court notes that a requisition order imposes on
the owner of the premises a landlord-tenant relationship (see
paragraph 25 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). This is especially so in the present
case, where the building was occupied by the Government and the
applicants had little or no chance to obtain the restitution of the
property.
- The Court further observes that the applicants
received compensation for the loss of the control of their property,
amounting to MTL 89 (approximately 213 EUR) for the years 1941-1988
and to MTL 340.53 (approximately EUR 817) from 1989 onwards. At
the same time, the applicants had to pay a yearly ground rent of
MTL 53 (approximately EUR 132 – see paragraphs 8 and
44 above). This means that the net income they could obtain from
their building was approximately EUR 81 per year until 1988 and
approximately 685 EUR per year after that date.
- Even assuming that the applicants were 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 sums at
issue – amounting to less than 7 EUR per month until 1988 and
to less than EUR 58 per month from 1989 onwards – are extremely
low and could hardly be seen as a fair compensation for the use of a
building which was big enough to allocate public offices and an
entire government department. 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 owners
to such extremely low returns.
It has not been shown by the Government to the
Court's satisfaction that in the particular circumstances of their
case, the applicants had at their disposal effective remedies capable
of redressing the above-mentioned situation.
- The Court has stated on many occasions that 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).
- Also, 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, mutatis mutandis, Hutten-Czapska, cited
above, § 223).
- However, these principles do not necessarily apply in
the same manner where, as in the present case, the requisition of
premises belonging to private individuals is aimed at allocating
public offices and not at securing the social protection of tenants
and/or at preventing homelessness. In the Court's view, in cases such
as the present one the effects of the rent control measures are
subject to a closer scrutiny at the European level.
- Having regard to the low amount of the rent paid to
the applicants, to the minimal profit that the latter could obtain
from their building, to the fact that the applicants' premises have
been requisitioned for almost sixty-five years, as well as to the
above-mentioned restrictions on the landlord's rights, the Court
holds that a disproportionate and excessive burden has been imposed
on the applicants. The latter had been required to bear most of the
financial costs of providing a working environment for government
departments and/or for public offices which were performing their
duties for the benefit of the community as a whole (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 applicants' fundamental rights.
- This conclusion is not altered by the fact, as pointed
out by the Government (see paragraphs 43 and 47 above), that the
existence of the requisition was known by the applicants' father at
the time of the signature of the public deed of 19 March 1943.
Indeed, the applicants and/or their ancestor could have expected that
the requisition, made in time of war, would have been lifted at the
end of the emergency period. The prolongation of the requisition over
a period of decades, coupled with the low level of rent and the
absence of sufficient procedural safeguards has, after a certain
lapse of time, upset the reasonable relation of proportionality which
should subsist between the means employed and the aim sought to be
achieved.
- 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 applicants claimed MTL 36,378 (approximately EUR
87,307) in respect of pecuniary damage for the occupation of their
premises since 1997, the year in which they started constitutional
proceedings. They also alleged that they had suffered great hardship.
They requested the Court to fix the amount of compensation for their
moral damage on an equitable basis.
- The Government submitted that the occupation at issue
was not unlawful and that the applicants had received the rent
provided for by the law and have obtained profits from their
property. Furthermore, the value of the building claimed by the
applicants was merely speculative.
- Having examined the circumstances of the case, the
Court 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 applicants (Rule 75 § 1 of the Rules of
Court).
B. Costs and expenses
- The applicants also claimed MTL 669.16 (approximately
EUR 1,605) for the costs and expenses incurred before the
domestic courts and MTL 1,675 (approximately 4,020 EUR) for those
incurred before this Court.
- The Government submitted that the costs as adjudicated
by the Constitutional Court presented no injustice to the applicants,
while the fees claimed for the Convention proceedings were excessive,
also in view of the applicants' extremely high valuation of
translations, postage and other secretarial services.
- 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 their application in Strasbourg, the applicants
presented a constitutional claim alleging a violation of their right
of property before the Civil Court. They also appealed against the
latter's decision to the Constitutional Court. The Court therefore
accepts that the applicants had incurred some expenses in order to
put right the breach of their 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 applicants (EUR 5,625) 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
applicants 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 applicants 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 applicants,
within three months from the date on which the judgment becomes final
in accordance with Article 44 § 2 of the
Convention, EUR 5,625 (five thousand six hundred and twenty-five
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
