VICA LTD v. MALTA
Inadmissible
Carlo Ranzoni;Ganna Yudkivska;Iulia Motoc;Marko Bošnjak;Georges Ravarani
1. The applicant company, Vica Ltd, was registered in Sliema, Malta in 1969. It was represented before the Court by Dr S. Grech and Dr I. Refalo, lawyers practising in Valletta. 3. The applicant company owned six pieces of land which were expropriated by the Government on 16 May 1975. The case before the Court only concerns one of those six (the sixth one). 4. In so far as relevant, on 5 July 2000 the applicant company was informed, by means of a notice to treat, that it was being offered 10,200 Maltese liri (MTL approximately 23,760 euros (EUR)) for the (sixth) piece of land, which measured 952 sq.m. 5. By means of a judicial letter of 25 July 2000 the applicant company refused the offer and claimed compensation amounting to MTL 45,210 (EUR 105,311) based on an ex parte architect report which considered that, according to the Government’s architect’s valuation, part of the land was agricultural land. 6. In the absence of any agreement, in the same year, the applicant company instituted constitutional redress proceedings, complaining under Article 1 of Protocol No.1 to the Convention and Article 6 of the Convention about the delay in the payment of compensation (in respect of all the pieces of land). The applicant company was successful and by a final judgment of 3 February 2012 the Constitutional Court awarded it EUR 10,000 in compensation for non-pecuniary damage. The costs were to be borne by both parties. 7. Pending the above constitutional proceedings and following action taken by the Commissioner of Lands, on 7 August 2000 proceedings before the Land Arbitration Board (LAB) were commenced to determine the compensation due. 8. In 2004, pending those proceedings, the Government returned part of the land to the applicant company. In consequence the remaining part of the sixth piece of expropriated land amounted to an area of 485 sq.m. 9. The LAB were not informed of the return of the property. 10. During the proceedings, technical experts appointed by the LAB established the value of the (entire) sixth piece of land as EUR 378,435, considering that for the most part, it was to be classified as building land. 11. By a decision of 18 March 2010 the LAB awarded the applicant company compensation for the six pieces of land mentioned in paragraph 3 above. In connection with the sixth piece of land, the subject of the proceedings before the Court, the LAB awarded EUR 378,435 (for the entire piece of land). It referred to Article 25 of the Land Acquisition (Public Purposes) Ordinance, which provided that where the technical members of the board were unanimously in agreement, the board was bound to award compensation in accordance with the valuation of the technical members. It also awarded interest and ordered that the costs be divided by the parties in proportion. 12. The Commissioner of Lands appealed, claiming, inter alia, that the Board had wrongly applied the law in determining the compensation, because by means of transitory provisions enacted in 2004 the LAB could now no longer award more than a claimant would have claimed. 13. During the proceedings the applicant company pleaded that the application of the relevant provisions of Act XVII of 2004 had breached its rights under Article 1 of Protocol No. 1 to the Convention. 14. By a judgment of 5 December 2014 the Court of Appeal upheld the appeal in so far as Article 25(1) of the Ordinance had retroactive application in terms of the transitory provisions contained in Article 4 of Act XVII of 2004. It followed that the award of compensation could not exceed that claimed by the applicant company. Adjusting the claim to the area of the sixth piece of land which had not been returned and for which the applicant company was owed compensation, the court awarded the applicant company EUR 53,651 and ordered it to pay costs. As to the constitutional plea raised by the applicant company in this regard, the Court of Appeal held that this legal matter had already been examined in two constitutional cases, namely Commissioner of Lands vs Maria Theresa Caruana Gatto et, of 6 September 2010 and Neriku Confectionary Ltd vs Director of Lands of 28 March 2014, in which it was held that there had been no breach of the claimants’ property rights given that they had been awarded the sum they had actually requested in compensation (irrespective of the fact that the independent architects had estimated the land to be worth more). 15. The applicant company did not institute a new and separate set of constitutional proceedings to complain about the matter, considering that it would be futile given the established case-law. 16. Before the 2004 amendments described below, in awarding compensation for the value of the land the Chairman of the LAB was bound by the valuations given by two experts (which formed part of the LAB), when these were unanimous in their valuation. 17. Act XVII of 2004 added a proviso to Article 25 (1) of the Land Acquisition (Public Purposes) Ordinance, Chapter 88 of the Laws of Malta, amending it to read as follows: “(1) The Board shall be competent – ... (e) to assess the amount of compensation payable under any of the provisions of this Ordinance and for that purpose to declare whether any area is a building site or agricultural or waste land; ... ... Provided that the amount of compensation to be assessed by the Board in accordance with the provisions of paragraph (e), shall not exceed the higher amount of compensation as proposed by any of the parties.” 18. The transitory provision, section 4(2) of the 2004 Act, reads as follows: “The provisions of Articles 25 and 31 of the Ordinance as amended by this section shall apply to any proceedings relating to any land covered by any declaration issued under Article 3 of the Ordinance, even if issued prior to the date of the coming into force of this section.” 19. The relevant parts of Article 27(1) of the Ordinance, regarding compensation, read as follows: “ (1) Without prejudice to any special provision contained in this Ordinance, in assessing compensation the Board shall act in accordance with the following rules: (a) no allowance shall be made on account of the acquisition being compulsory; (b) the value of the land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise: (...)” 20. In circumstances similar to the present case, the Constitutional Court examined, inter alia, the complaint of the claimants in that case concerning the retroactive application of the 2004 Act, which had allegedly violated their legitimate expectation to compensation as established by the laws in force at the time of the taking, thus denying them part of their compensation. 21. By a judgment of 6 September 2010 the Constitutional Court – which was bound (by procedural rules) to look into the matter only under Article 1 of Protocol No. 1 – found no violation of the claimants’ property rights. 22. It considered that before the 2004 Act the LAB could have awarded compensation higher than that requested by the parties, so rather than clarifying the law the Act limited the compensation that could be awarded. Nevertheless, the claimants did not have a “possession” within the meaning of Article 1 of Protocol No. 1, in that they had had no legitimate expectation of receiving an amount higher than that established by their ex parte expert, which they had claimed. Specific to that case the court noted firstly that when the 2004 Act had come into effect the report of the new architects had not yet been included in the case file. Secondly, before the 2004 Act the claimants had not claimed compensation higher than that awarded, and thirdly, when the tribunal architects were appointed the claimants had been aware of the new legislation. Moreover, the claimants had received fair compensation since they had been awarded the entire sum they had asked for. The Constitutional Court noted that it was clear that the valuation made by the experts appointed by the tribunal was in stark contrast to the valuations made by the previous architects and the ex parte experts; their valuation was therefore arbitrary and disproportionate, as no reasons had been given to justify the huge difference. The 2004 Act had therefore not violated the claimants’ rights under Article 1 of Protocol No. 1. 23. In circumstances similar to those in the present case, the claimants raised a constitutional issue arguing that the application of the relevant proviso of the 2004 Act in their case had breached their right to fair compensation. The issue was raised before the Court of Appeal before which they were appealing against a decision of the LAB awarding them compensation. The Court of Appeal shared the conclusions of the Constitutional Court in the case of Commissioner of Lands vs Maria Theresa Caruana Gatto et of 6 September 2010 and dismissed the claim on the basis that the claimants had obtained the sum they had requested.