CASE OF GERA DE PETRI TESTAFERRATA BONICI GHAXAQ v. MALTA
Violation of Art. 6-1;Violation of P1-1;No violation of Art. 13;Pecuniary damage - reserved;Non-pecuniary damage - award
Joseph Zammit Mckeon;Lech Garlicki;Ledi Bianku;Nicolas Bratza;Päivi Hirvelä;Zdravka Kalaydjieva
6. The applicant was born in 1949 and lives in Balzan, Malta. 7. The applicant is the owner of a property, known as Palazzo Bonici, in Valetta. She partly owns some of the ground floor shops, and entirely owns the house, from the rest of the ground floor and the basement to the top floors. 8. The property had been damaged during the Second World War and the applicant's ancestors, from whom she inherited the property, had on 11 January 1945 applied to the War Damage Commission to obtain the necessary funding to have the property restored. At the time, the building consisted of a large eighteenth century town house including a few rooms on the ground floor which were rented out as shops. Between 1945 and 1950 the War Damage Commission had paid out a sum corresponding to EUR 1,307, for the premises excluding the shops in respect of which no amount had been paid as a consequence of undefined claims. According to the applicant the sums awarded covered expenses for required temporary works to secure the premises, as had originally been claimed, and not the entire works to repair the whole of the property. While the Government contended that, despite the payments, the building was left in a state of neglect, the domestic courts acknowledged that the applicant had attempted to reconstruct the damaged area (page 21 of the Constitutional Court judgment of 8 January 2007) 9. In 1958 the then Colonial Government issued an order taking control of the property under title of possession and use, that is, a forced temporary taking of property subject to the payment of annual compensation, known as a “recognition rent”, to the owners. 10. Despite this order, the applicant's ancestors refused to hand over the keys of the building. Thus, the property was left unused until 1972 when the building was forced open by the Government, by which time it had deteriorated considerably. 11. In 1972 the Government commenced works to repair the property with a view to using it as a cafeteria and offices in conjunction with the Manoel Theatre situated nearby. The Government evicted the tenants of the shops on the ground floor which had been leased on the basis of controlled rents, and a hall in the upper floors was converted into a performance hall for small audiences. Subsequently a theatre restaurant was housed in the basement of the building and another floor was added to house the foundation for Maltese patrimony “Fondazzjoni Patrimonju Malti”, a Government foundation promoting national heritage, which also serves as a commercial company dealing in publications. 12. On 5 August 1976 the Government issued a “notice to treat” by which the owner was informed that the compensation offered by way of recognition rent amounted to 210 Maltese Liras (MTL – approximately 490 euros (EUR)). The amount was based on the 1914 rental value (according to rent laws relating to renting of residences – not commercial premises – in force at the time) increased by 40 % to allow for inflation. By a judicial letter of 1976 the applicant's ancestors rejected the offer and in the same year the Commissioner of Lands instituted compensation proceedings before the Land Arbitration Board (“LAB”). These proceedings were suspended sine die on 10 October 1996 (see Annex A for a detailed chronological list of hearings in the proceedings). Pending these proceedings, the applicant inherited the property of which she gained possession by public deed on 26 March 1990. The applicant submitted that even if these proceedings had been concluded, the LAB would have been unable to establish a fair rent reflecting market values, since it was bound by law to assess rent on the basis of 1914 rental values. 13. After repairing the property the Government allocated it and entrusted its management to the Manoel Theatre Management Committee (“MTMC”), the organ of the Ministry of Culture and Education which administers the Manoel Theatre. It rented the property to a number of commercial entities, including offices, cafeterias, reception halls, a restaurant and a publishing house. According to the Government, the economic income received by the MTMC per year amounted to approximately EUR 13,000 and the Government had spent EUR 735,115 restoring the building and meeting its maintenance costs. 14. In 1996 the applicant instituted constitutional redress proceedings in which she brought complaints under Articles 6 and 14 of the Convention and Article 1 of Protocol No.1 to the Convention. She complained that the property, estimated at the time to be worth MTL 880,000 (approximately EUR 2,050,000), was not used for a public purpose, that she had not been offered fair compensation, that the proceedings pending before the LAB were taking an unreasonably long time to be decided and that she had been discriminated against vis-à-vis other property owners who, unlike her, had their properties expropriated by outright purchase and not subject to the less favourable forced rents. She requested the court to grant adequate redress and to award damages. 15. On 18 January 1999 the Civil Court (First Hall) found for the applicant. It declared the taking null and void, as the property was not being used for a public purpose, and therefore contrary to the Convention. It further found a violation of the applicant's right to a fair hearing within a reasonable time. It considered that the period to be taken into account started running on 25 February 1958, the date when the applicant's right to compensation arose, and had not yet ended forty years later. It noted that it had taken the Government eighteen years to issue a “notice to treat” without which compensation proceedings could not be initiated. This, together with the lack of initiative of the Commissioner of Lands to pursue those proceedings, was enough to allow it to conclude that the applicant had suffered a serious prejudice, incompatible with Article 6 of the Convention, over the forty years during which she had been left without compensation. It declared that it was not necessary to examine the Article 14 complaint. The issue of payment of damages in respect of the violation of Article 6 (which depended on the value of the property) was reserved. 16. The Government appealed against the above-mentioned judgment. 17. The applicant submitted that during the proceedings, lasting eight years, the judges were replaced several times and there had been numerous adjournments (see Annex B for a detailed chronological list of hearings in the proceedings). 18. On 8 January 2007 the Constitutional Court upheld the first-instance judgment in part. It held that there had been a violation of Article 1 of Protocol No.1 to the Convention, in that a proper balance had not been preserved between the private interest and the public need. While it was true that the commercial purposes of the taking appeared to have superseded the original purpose, it was in the light of the compensation offered to the applicant (EUR 490 yearly rent for a property valued at approximately EUR 1,863,500) and the fact that she had been deprived of her property for nearly fifty years, that she had been made to bear a disproportionate burden. The fact that the property had been refurbished by the State had little bearing on this conclusion, although it could be relevant in determining the compensation terms. It declared the Governor's declaration of 1958 null and void and ordered the Government to release the property. The Constitutional Court, however, found that there had not been a violation of Article 6 in respect of the length of the proceedings. It was true that the proceedings had been lengthy, the “notice to treat” having been issued only eighteen years after the taking of the property and the proceedings before the LAB having not yet been concluded. However, the court noted that the time to be considered started running after the Convention took effect in respect of Malta, namely on 30 April 1987 (when Malta introduced the right of individual petition) and the applicant had failed to submit evidence of what had caused the delay after 1987. As to the Article 14 complaint, the court held that it had been misconceived, since the first-instance court had not examined it. As to the adequacy of compensation, it confirmed that the release of the property was an adequate remedy for the violation of Article 1 of Protocol No.1 to the Convention, and the reservation of the issue of compensation by the first court was related to the Article 6 complaint, which had not been upheld on appeal. However, it reserved any rights the applicant might wish to assert in respect of compensation for the “possession and use” of the premises during the relevant period. 19. On an unspecified date following this judgment, the applicant obtained an eviction order against the Government. However, prior to its enforcement, on 22 January 2007, the Government issued a fresh order, this time under title of public tenure in accordance with the Land Acquisition (Public Purposes) Ordinance (“the Ordinance”). Included in the taking were a number of shops and offices adjacent to Palazzo Bonici, of which the applicant owned an undivided share together with third parties. The Government offered an annual recognition rent of MTL 21,000 (approximately EUR 49,000), basing it on section 22 (11) (c) of the Ordinance (see “Relevant Domestic Law” below), without indicating what portion of this amount was due for the applicant's house, of which she was the sole owner. According to an architect's valuation, the present day rental value of Palazzo Bonici, excluding the other adjacent property, amounts to MTL 110,000 (approximately EUR 256,000) per year. The market value in the case of sale is estimated to be MTL 2,200,000 (approximately EUR 5,125,000); the Government, however, estimate it to be only MTL 1,500,000 (approximately EUR 3,494,000). 20. On an unspecified date, the applicant lodged ordinary proceedings (327/07 - ATB 10), complaining that the new taking of the property under public tenure had been unlawful, as it was not permissible under the Land Acquisition Ordinance to take property by means of public tenure if it was not already being used by the Government. 21. At the request of the Government the eviction order was suspended pending the outcome of those proceedings. 22. On the date of introduction of this application the proceedings were still pending. The Civil Court, in its ordinary jurisdiction, gave judgment in the case on 11 November 2008. The latter held that the taking of the property by public tenure had been ultra vires and was therefore null and void. An appeal was lodged on 19 November 2008 and the case is still pending. 23. On an unspecified date the applicant lodged further constitutional redress proceedings (23/07 - ATB 10 A), claiming that the taking of the property under public tenure breached Articles 6 and 14 of the Convention and Article 1 of Protocol No.1 to the Convention. 24. She claimed that the taking had not been in the public interest as the property was mainly being used for commercial purposes in relation to the Theatre, even though the Government had at their disposal other properties in the vicinity which could have served the same purpose. She also claimed that the inadequate compensation offered by the Government was arbitrary and not in accordance with the law. Compensation for the taking of a property under public tenure had to be calculated on the basis of section 27 (13) of the Ordinance and not section 22 (11) (c), which applied where property taken under “public tenure” was converted by absolute purchase (see the Relevant Domestic Law below). Although it could be supposed that the Government's offer amounted to more than what was applicable by law, it did not reflect the real current market value, since the calculations had been based on rental values applicable in 1939. Even assuming that the offer comprised compensation for Palazzo Bonici alone and not the adjacent properties, it still represented a fifth of its real value on the market; therefore, it did not constitute adequate compensation and the applicant was being made to bear an excessive burden. She further claimed that the decision to take her property under public tenure had been arbitrary and discriminatory. At the time only four other properties had been taken under this title, as opposed to outright purchase. All the properties had already been in the possession of the Government under a different title and were all related to slum clearance and housing projects, unlike the applicant's. Finally, she complained that the taking was in breach of Article 6, in that she was not given a fair hearing within a reasonable time, as she had no real and effective possibility of having the value of her property determined by a court. Notwithstanding the Constitutional Court judgment in her favour, in these circumstances the applicant remained without an effective remedy. 25. These proceedings are still pending. 1. Compensation for damage arising from the violation of Article 1 of Protocol No. 1 26. On 15 January 2007 the applicant requested the Civil Court (First Hall) to determine the claim (537/1996) for the compensation due for the violation of Article 1 of Protocol No. 1 in accordance with Article 235 of the Code of Organisation and Civil Procedure (“COCP”). On 29 November 2007 the Civil Court (First Hall) rejected the applicant's claim. It held that the Civil Court had only reserved the matter of compensation in relation to Article 6, of which no violation had been found by the Constitutional Court, which had also found that declaring the taking null and void was a sufficient remedy for the violation of Article 1 of Protocol No. 1. Thus, the Constitutional Court's judgment of 8 January 2007 had been final, the applicant's claims having been decided in their entirety, except for the reservation in respect of payment due for the possession and use of the land for the relevant period, which was subject to ordinary civil remedies. In consequence Article 235 of the COCP did not apply to the present case. 27. That finding was confirmed on appeal by a judgment of the Constitutional Court of 29 February 2008. 2. Compensation for damage arising from the possession and use of the premises 28. On 6 December 2007 the applicant instituted proceedings against the Commissioner of Lands (1281/07) for damage arising from the loss of possession and use of the premises in the light of the Constitutional Court's judgment of 8 January 2007 finding a violation of Article 1 of Protocol No. 1 to the Convention. On 10 June 2010, the court having established that such a decision had not been taken by any other court and that the domestic courts had particularly stated that such a measure had to be sought before the ordinary domestic civil courts, took cognisance of the case and ordered the submission of the relevant evidence. 29. The proceedings are still pending. 30. Section 22 (11) of the Land Acquisition (Public Purposes) Ordinance, Chapter 88 of the Laws of Malta, reads as follows: “The compensation due for the acquisition by absolute purchase of any land, and the sum to be deposited in accordance with this article shall be: ... (c) in the case of conversion from public tenure into absolute purchase a sum arrived at by the capitalisation at the rate of one point four per centum of the annual recognition rent due under the provisions of this Ordinance.” Section 27 of the Ordinance relates to the assessment of compensation by the Land Arbitration Board. Subsection 13, reads as follows: “The compensation in respect of the acquisition of any land held by way of public tenure shall be equal to the acquisition rent assessable in respect thereof in accordance with the provisions contained in subarticles (2) to (12), inclusive, of this article, increased (a) by forty per centum (40%) in the case of an old urban tenement and (b) by twenty per centum (20%) in the case of agricultural land.”