CASE OF FLERI SOLER AND CAMILLERI v. MALTA
Violation of P1-1;Damage - question reserved;Costs and expenses award - domestic and Convention proceedings
Giovanni Bonello;Ján Šikuta;Josep Casadevall;Matti Pellonpää;Nicolas Bratza;Stanislav Pavlovschi
4. The applicants were born in 1932 and 1934 respectively and live in Malta. 5. The applicants claimed to be the owners of a building in Valletta, Malta. The Government contested this claim, stating that it appeared from the relevant records and from a letter written by the applicants themselves on 29 July 2005 that the premises had simply been acquired by the applicants’ late father, Mr Joseph Camilleri, under a public deed of 19 March 1943. The property had been transferred in perpetual emphyteusis (a contract granting a tenement for a stated yearly rent or ground rent to be paid in money or in kind) with effect from 1 March 1941. The deed in question 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 given back by the government to the said Joseph Camilleri.” 6. Having taken note of the disagreement between the parties on this point, the Court will nevertheless refer in the present judgment to the building in issue as “the applicants’ building” or “the applicants’ property”. 7. On 4 September 1941 the authorities requisitioned the applicants’ building. They allocated the property first to the Department of Education and then to the Ministry of Industry and Agriculture. The building was used as public offices. 8. According to the Emergency Compensation Board, the yearly rent due at the time of the requisitioning was 89 Maltese liras (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 received this rent regularly and it was still being paid to them at the time the application was lodged (10 September 2005). 9. On 13 March 1997 the applicants brought constitutional proceedings before the First Hall of the Civil Court. They argued that the requisitioning and continued occupation 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 authorities should nevertheless have been subject to the ordinary laws governing landlords and tenants. However, when a forced tenancy was established with the authorities, the usual remedies available to ordinary landlords against tenants were excluded, and the landlord-tenant relationship could not be terminated under the usual conditions. Hence, for example, whereas 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 its composition might change, remained a government and hence a lessee in perpetuity. In view of the above, the applicants alleged a breach of Article 1 of Protocol No. 1 taken alone or in conjunction with Article 14 of the Convention. 10. In a judgment of 26 November 2003, the Civil Court rejected the applicants’ claim. It observed that, according to the caselaw of the European Court of Human Rights, a deprivation of property could be said to have occurred 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 had not been deprived of their right of ownership. Therefore, the requisition of their building could not be considered an expropriation. 11. In the Civil Court’s view, the measure complained of was aimed at controlling the use of property. The authorities had the power to interfere with the right of property in accordance with the general interest provided that their actions satisfied a “fair balance” test. 12. According to the findings of the European Commission of Human Rights in Zammit v. Malta (no. 16756/90, Commission decision of 12 January 1991, Decisions and Reports (DR) 68), in the implementation of policies of a socioeconomic nature, the margin of appreciation of the State was very wide. The Civil Court found that in the present case the occupation of the property by the authorities could properly be said to be in the public interest. 13. With regard to the claim of discrimination, the Civil Court acknowledged that the applicants were burdened with a perpetual tenant and that the authorities 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” (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 grounds. In addition, it noted that the fact that no further requisitions could be carried out did not mean that those in force should not be maintained, especially since the public interest justifying them had not ceased to exist. 14. The applicants appealed to the Constitutional Court. They claimed that the requisition constituted a de facto expropriation rather than a measure to control 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 subsidised housing. The measure complained of was therefore disproportionate and the authorities had abused their powers for their own benefit. 15. The applicants further observed that they were being discriminated against, since the authorities were abusing their power and frustrating the applicants’ right to seek a remedy. They relied on Article 14 of the Convention taken in conjunction with Article 1 of Protocol No. 1. 16. In a judgment of 18 March 2005, the Constitutional Court dismissed the applicants’ appeal and upheld the Civil Court’s judgment. 17. The Constitutional Court reiterated that, since the applicants had 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. 18. The Constitutional Court noted that the Housing Act, as in force at the time of the issuing of the requisition order, authorised requisitions either in the general interest or to meet the need for affordable housing. In the present case, the use of the building as a government department was clearly in accordance with the public interest. 19. The Constitutional Court further pointed out that in Mellacher and Others v. Austria (19 December 1989, Series A no. 169), the European Court of Human Rights had held that any interference with the right of property must strike 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 achieve 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 authorities would probably continue using the building for an indefinite period of time; however, this was lawful as long as the building was being used in the general interest. 20. Lastly, the Constitutional Court observed that the applicants had never claimed that they needed their property urgently for themselves or for their families. Hence, no “individual and excessive burden” had been imposed on them within the meaning of the Strasbourg case-law. 21. As to the applicants’ complaint under Article 14 of the Convention, the Constitutional Court noted that it was unclear what form of discrimination the applicants were claiming to have suffered. They had not clarified, either, what kind of remedies they had been unable to use. In any case, the authorities and the applicants were not “persons in relevantly similar situations”. The Constitutional Court referred on this point to the case in Spadea and Scalabrino v. Italy (28 September 1995, Series A no. 315-B). 22. 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”. 23. 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 in order to provide living accommodation to certain persons or ensure a fair distribution of living accommodation. Section 3(1) of the Housing Act, as in force at the time of the requisitioning of the applicants’ building, 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.” 24. After 1989 authority to issue requisition orders was transferred to the Director of Social Housing. In section 3(1) of the Housing Act, after the words “public interest”, the conjunction “or” was deleted and replaced by the words “but only”. 25. A requisition order imposes a landlord-tenant relationship on the owner of the requisitioned premises. 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. This provision, 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 ...” 26. 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 ...”