European Court of Human Rights

SECOND SECTION

CASE OF VASSALLO v. MALTA

(Application no. 52795/20)

JUDGMENT
 

STRASBOURG

12 September 2023

This judgment is final but it may be subject to editorial revision.

In the case of Vassallo v. Malta,

The European Court of Human Rights (Second Section), sitting as a Committee composed of:

 Pauliine Koskelo, President,
 Lorraine Schembri Orland,
 Davor Derenčinović, judges,
and Dorothee von Arnim, Deputy Section Registrar,

Having regard to:

the application (no. 52795/20) 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") on 26 November 2020 by two Maltese nationals, Ms Maria Fatima Vassallo and Mr John Edward Vassallo, born in 1950 and 1946 respectively and both living in Tarxien ("the applicants"), who were represented by Dr M. Camilleri and Dr E. Debono, lawyers practising in Valletta;

the decision to give notice of the complaints concerning Article 1 of Protocol No. 1 to the Convention alone, and in conjunction with Article 13 of the Convention, in relation to the effects of Act XXIII of 1979, to the Maltese Government ("the Government"), represented by their Agents, Dr C. Soler, State Advocate, and Dr J. Vella, Advocate at the Office of the State Advocate, and to declare inadmissible the remainder of the application;

the parties' observations;

Having deliberated in private on 11 July 2023,

Delivers the following judgment, which was adopted on that date:

SUBJECT MATTER OF THE CASE

1.  The case concerns a unilaterally imposed lease under Act XXIII of 1979 amending Chapter 158 of the Laws of Malta (hereinafter 'the Ordinance') affecting the first applicant's property in Tarxien (which she inherited in 1987) as of 13 May 1984. At that time the annual rent payable was approximately 134 euros (EUR), in 1999 it increased to EUR 187, and in 2013 to EUR 259; it would increase every three years thereafter, amounting to EUR 264 in 2016.

2.  In 2019 the applicants (who are married) lodged constitutional redress proceedings complaining that the application of Article 12 of the Ordinance breached their, and their ascendants', property rights as of 1990 (sic). They specified that their claims referred to the period until 31 December 2018, without prejudice to any further action they might undertake to challenge the 2018 amendments to the law introducing the new Article 12B of the Ordinance. The property's annual market rental value according to the court-appointed expert was EUR 1,330 in 1984 and EUR 6,800 in 2018, totalling approximately EUR 88,000 over the period 1984-2018, while the amount received in rent was around EUR 8,000.

3.  By a judgment of 17 June 2020, the Civil Court (First Hall) in its constitutional competence found a violation of Article 1 of Protocol No. 1 to the Convention, as a result of the application of the law since 1987, date when the property was inherited. The court considered that the ancestors had not taken any steps to challenge the law, thus it could not be established that they had been unhappy with the situation. It considered that the 2018 amendments (relied on by the Government in their submissions) which could possibly serve as a remedy preventing the continuation of the violation, fell outside the parameters of the case. It awarded EUR 15,000 in compensation. In this connection, the court considered that while it was true that the law did not provide for a time-limit within which to bring forward constitutional claims, the applicants, who had inherited the property in 1987, had only lodged their complaint in 2019. Thus, in the court's view, that inaction had to be taken into consideration for the purposes of compensation. No costs were to be paid by the applicants. None of the parties appealed.

4.  In the meantime, in 2019, the applicants filed a case before the Rent Regulation Board (RRB) which increased the rent to EUR 2,550 for three years and EUR 3,400 for the subsequent three years (i.e. 1.7% and 2 % of the sale market value) in line with the 2018 amendments.

5.  The applicants complained under Article 1 of Protocol No. 1 to the Convention alone and in conjunction with Article 13 that they were still victims of the violation upheld by the domestic court as a result of the low amount of compensation awarded and the failure to evict the tenants.

THE COURT'S ASSESSMENT

1. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION

6.  The applicants complained that they were still victims of the violation of Article 1 of Protocol No. 1 to the Convention upheld by the domestic court.

7.  The Court notes that neither the Government nor the domestic court have distinguished the status of the first applicant, as sole owner of the property at issue (which she inherited), and the second applicant who is her husband. The Court will likewise not make any such distinction which would be based on the applicable domestic law and the matrimonial regime of the applicants, the details of which were not brought to the attention of the Court.

8.  The Court refers to its general principles concerning victim status and its established case-law in cases similar to the present one (see, among many other authorities, Apap Bologna v. Malta, no. 46931/12, §§ 41, 43, 48 and 82, 30 August 2016). The Court observes that the domestic court has acknowledged the violation and awarded EUR 15,000 in compensation covering pecuniary and non-pecuniary damage.

9.  In this connection, the Court notes that despite a reference to 1990 in their requests to the domestic court, the latter awarded compensation as of 1987. Bearing in mind that it is for the domestic courts to verify the limits of the applicants' requests thereby avoiding acting ultra petita and that the Government raised no objection in this respect, the Court will likewise not limit the claim to the period subsequent to 1990.

10.  In so far as the domestic court considered that the applicants were only due compensation for the period after which the property had been inherited (i.e. after 1987) the Court observes that, as admitted by the Government in their submissions, the Civil Court (First Hall)'s jurisprudence was not uniform on this point and the Constitutional Court had taken a more consistent approach. The latter considered that in those circumstances where the plaintiffs were the universal heirs of their predecessors, they should be awarded compensation also in respect of the period during which the property had been held by their predecessors in title. The Court observes that the matter pertains to the sphere of domestic law, in particular its civil provisions, and their pertinence in the context of the particular human rights framework pertaining to Malta, where human rights claims are not subject to prescription. The matter having been determined by the Constitutional Court and consistently applied, there is no reason for this Court to take a different approach. The first applicant being a universal heir, the assessment of compensation must thus be made on the basis of the entire period i.e. since 1984.

11.  Bearing in mind that the property had a rental value of, for example, EUR 6,800 in 2018, the Court considers that the compensation awarded for a violation persisting over decades was not adequate. This consideration suffices to find that the redress provided by the domestic court did not offer sufficient relief to the applicants, who thus retain victim status for the purposes of this complaint (see, mutatis mutandis, Portanier v. Malta, no. 55747/16, § 24, 27 August 2019). The Government's objection to this effect is therefore dismissed.

12.  The Court also dismisses the Government's objection of non-exhaustion of domestic remedies (in so far as the applicants had not appealed to the Constitutional Court). The Court has already made relevant considerations related to the Constitutional Court's effectiveness for the period until 2018 in Cauchi v. Malta (no. 14013/19, §§ 55 and 77, 25 March 2021) and for the period until 2019 in Pace v. Malta ([Committee], no. 53545/19, § 9, 29 September 2022) and Grima and Others v. Malta ([Committee], no. 18052/20, § 8, 7 March 2023).

13.  The Court notes that the additional domestic judgments relied on by the Government in the present case, related to 2020, show that the Constitutional Court increased compensation in seven[1] of the eight appeals where this was requested. Thus, the Court considers that the case-law relied on by the Government offers a good indication that in 2020 the Constitutional Court abandoned its precedent practice of diminishing compensation awarded at first instance and, as argued by the Government, has started to examine these rent law cases on their own merits, paying attention to the facts of each case.

14.  However, the Court observes that the compensation terms applied by the Constitutional Court in March 2020 were nonetheless not consistently satisfactory. For example, on the same day, 27 March 2020, it upheld the plaintiff's appeal and increased compensation in one judgment, thus awarding adequate compensation (see Tabone v. Malta (dec.) [Committee], no. 23107/20, §§ 10-13, 28 March 2023), while upholding the State's appeal and therefore reducing compensation in two other judgments[2], at least one of which resulting in an inadequate amount of compensation being awarded (see Grima v. Malta, [Committee], no. 38660/20, §§ 6 and 9, 22 September 2022). The next case where compensation was increased by the Constitutional Court is dated 20 July 2020[3], that is after the expiry of the time-limit for the applicants in the present case to appeal (i.e. twenty running days from the first-instance judgment of 17 June 2020 in their case). Thus, even assuming that, by 20 July 2020, the final awards made by the Constitutional Court were already in line with this Court's awards (see, for example, Cuschieri and Others v. Malta (dec.) [Committee], no. 36806/21, § 8, 20 September 2022, in relation to the beginning of 2021), and that it could be considered an effective remedy, given the relevant timeline in the circumstances of the present case, the applicants could not have been expected to lodge an appeal to the Constitutional Court prior to that date.

15.  The Court notes that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention or inadmissible on any other grounds. It must therefore be declared admissible.

16.  As to the merits, the Court refers to its general principles as set out, for example, in Amato Gauci v. Malta (no. 47045/06, §§ 52-59, 15 September 2009).

17.  Having regard to the findings of the domestic court relating to Article 1 of Protocol No. 1, the Court considers that it is not necessary to re-examine in detail the merits of the complaint. It finds that, as established by the domestic court, the applicants were made to bear a disproportionate burden. Moreover, as the Court has already found in the context of the objection on victim status (see paragraph 8 above), the redress provided by the domestic court did not offer sufficient relief to the applicants.

18.  The foregoing considerations are sufficient for the Court to find that there has been a violation of Article 1 of Protocol No. 1 to the Convention.

2. OTHER COMPLAINTS

19.  The applicants also complained under Article 13 of the Convention in conjunction with Article 1 of Protocol No. 1. Having regard to the facts of the case, the submissions of the parties, and its findings above, including those related to the development of the Constitutional Court's case-law in 2020, the Court considers that it has dealt with the main legal questions raised by the case and that there is no need to examine the remaining complaint (see Centre for Legal Resources on behalf of Valentin Câmpeanu v. Romania [GC], no. 47848/08, § 156, ECHR 2014).

APPLICATION OF ARTICLE 41 OF THE CONVENTION

20.  The applicants claimed 40,255.20 euros (EUR) in respect of pecuniary damage for rental losses from 1984 up to 2021 based on the court-appointed expert's valuation and in accordance with their own calculations which they considered were based on the principles of Cauchi (cited above) and EUR 12,000 in respect of non-pecuniary damage.

21.  The Government submitted that there had been no explanation as to the applicants' calculation in respect of pecuniary damage which according to the Government was not in line with Cauchi (cited above). Furthermore, they considered that: (i) the values submitted by the expert were only estimates, and not amounts that the applicants would certainly have obtained; (ii) it could not be assumed that the property would have been rented out for the whole period if the tenants had not been protected by law - particularly given the boom in property prices over recent years; (iii) the measure had been in the public interest and thus the market value was not called for. In particular, the Government also noted that the applicants had limited their claims at the domestic level until 2018, thus no dues could be awarded for the subsequent period. The Government also considered that the claim for non-pecuniary damage was excessive.

22.  The Court has made all the considerations applicable in this type of cases, as set out in Cauchi (cited above, §§ 102-07). Noting in particular that the award of the Civil Court remains payable if not yet paid, and that the applicants' domestic claims and those at issue in the present application as communicated to the Government were limited to the period prior to 2018 the Court awards the applicants, jointly, EUR 32,000 in pecuniary damage and rejects their claim for non-pecuniary damage which can be considered covered by the domestic award.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

1. Declares the complaint concerning Article 1 of Protocol No. 1 to the Convention admissible;
2. Holds that there has been a violation of Article 1 of Protocol No. 1 to the Convention;
3. Holds that there is no need to examine the admissibility and merits of the remaining complaint;
4. Holds

(a)  that the respondent State is to pay the applicants, jointly, within three months, EUR 32,000 (thirty-two thousand euros) in respect of pecuniary damage;

(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;

5. Dismisses the remainder of the applicants' claim for just satisfaction.

Done in English, and notified in writing on 12 September 2023, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Dorothee von Arnim Pauliine Koskelo
 Deputy Registrar President

[1] Victoria Amato Gauci et v. L-Avukat Generali et, Rik. 85/2013, 28 February 2020;

Catherine Tabone pro et noe v. L-Avukat Generali et, Rik. 27/18, 27 March 2020;

Mario Cachia et v. Supermarkets Limited et, Rik. 82/2015, 20 July 2020;

Angela sive Gina Balzan v. L-Onorevoli Prim Ministru et, Rik. 16/2015/1, 8 October 2020;

Michael Farrugia et v. L-Avukat Generali et, Rik. 79/2016, 6 October 2020;

Giovanna Bartoli et v. Carmelo Calleja et, Rik. 46/2018/1, 6 October 2020;

Henry Deguara Caruana Gatto et v. L-Avukat tal-Istat, Rik. 36/18, 23 November 2020.Henry Deguara Caruana Gatto et v. L-Avukat tal-Istat, Rik. 36/18, 23 November 2020.

[2] Joseph Grima et v. L-Avukat Generali et, Rik. 22/19, 27 March 2020,

Brian Psaila v. L-Avukat Generali et, Rik. 12/2018, 27 March 2020.

[3] Mario Cachia et (cited above).