Communicated on 29 May 2015
FIFTH SECTION
Applications nos. 75225/13 and 77311/13
B. TAGLIAFERRO & SONS LIMITED against Malta
and COLEIRO BROTHERS LIMITED against Malta
lodged on 28 November 2013 and 28 November 2013 respectively
STATEMENT OF FACTS
The applicant in the first case, B. Tagliaferro & Sons Limited, is a company registered in Malta in 1966 and is situated in Valletta. It is represented before the Court by Dr I. Refalo and Dr S. Grech, lawyers practising in Valletta.
The applicant in the second case, Coleiro Brothers Limited, is also a company registered in Malta in 1966 and it is situated in Marsa. It is represented before the Court by Dr P. Lofaro and Dr M. Simiana, lawyers practising in Valletta.
A. The circumstances of the case
The facts of the case, as submitted by the applicant companies, may be summarised as follows.
1. Background to the case
Each applicant company is the owner of a one third undivided share of three corner properties, namely nos. 124 and 125 in Strait Street and no. 109 Archbishop Street, Valletta (hereinafter “the properties”).
According to a court-appointed expert the properties nos. 124 and 125 were valued at 35,000 Euros (EUR) each in 1993 and EUR 58,000 and EUR 60,000 respectively in 2012 while property no. 109 was valued at EUR 93,000 in 1993 and EUR 140,000 in 2012. The same architect estimated that the rental value from 1993 to 1998 would be EUR 233, EUR 250 and EUR 600 respectively, to be augmented by 10 % every five years thereafter. It has not been specified whether the rental value was monthly or yearly.
By a President’s declaration of 23 February 1993 the Government declared its intention of acquiring by title of absolute purchase the three properties for public purposes. No Notice to Treat (offering an amount of compensation) was issued by the Commissioner of Lands at the time (see below). The public purpose later transpired to be that of using the properties together with other properties also expropriated (together referred to as “the premises” hereinafter) as government offices, in particular as the office of the Attorney General.
For some time the Government did not take any other steps in relation to the properties. Later on, since parts of the premises expropriated (including other adjacent property not owned by the applicants) were occupied by squatters and other persons having legal title (of lease or similar – inkwilini - hereinafter referred to as “lessees”), the Government was unable to take over the premises. The applicants insisted that at the time of the declaration, the properties owned by them were vacant.
Between 1996 and 2007 the Attorney General repeatedly requested the Land Department to take steps to vacate the premises. In turn the latter department wrote to the Housing Authority requesting it to provide alternative accommodation to the lessees and the squatters. Given that not all the occupiers had applied for alternative accommodation, as expected by the authorities, the relocation process was delayed. Thus, a construction permit in relation to the planned project issued in 1996 expired. On 18 September 2000 another application was submitted to the Malta Environment and Planning Authority for approval. By the end of 2013 no approval had yet been issued.
In the meantime in April 2000 the issue was brought to the attention of the Justice Minister and in January 2001 eviction orders were issued to evict the occupiers of the premises.
In 2003 the applicant companies wrote to the Commissioner of Land requesting him to pay compensation for the taking. The latter did not reply.
In 2007 the premises were vacated and the Government took over their possession.
By means of a judicial protest of 20 July 2008 the applicant companies requested the return of the properties owned by them as well as compensation for the taking until its effective release. The Commissioner of Land did not reply to the protest but continued the attempts to vacate the property.
On 24 June 2009 the Government issued a new declaration for the expropriation of the properties. They offered the following amount of compensation which was deposited in court: EUR 8,968 for property no. 124; EUR 8,316 for property no. 125; and EUR 21,733 for property no. 109.
The Government thus immediately became the owner of the properties in accordance with the Ordinance, Chapter 88 of the Laws of Malta (as amended). The applicant companies were not served with this declaration as required by law (see Relevant domestic law).
2. Constitutional redress proceedings
On unspecified dates the two applicant companies instituted separate constitutional redress proceedings complaining that the taking had not been in the public interest, that there had been a delay in the payment of compensation and that they had had no access to an impartial and independent tribunal in the meantime.
The two applications were heard and determined jointly by the domestic courts.
By two separate judgments of 12 October 2012 the Civil Court (First Hall), in its constitutional jurisdiction, upheld the applicant companies’ claims in part.
It rejected their claim concerning the lack of public interest of the expropriation, having considered that the purpose of the taking was one in the general interest of citizens, given the role of the Attorney General who served constitutional duties in the interest of the State. The current Attorney General’s office was being moved to a more appropriate location, allowing it to expand. Whether the Government had other alternative property for this project was not a matter to be examined by the court, such choices falling within the Government’s discretion, which in the present case had not been applied unreasonably, and the decision had been intra vires. While it was true that a certain delay had occurred in the development of the initial plan, the court considered that the public interest still existed to date as the plan was still in force and had recently started progressing more rapidly. Moreover, the property was still earmarked for the same purpose, which had never been abandoned by the authorities.
The court, however, found a violation of Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention in connection with the delay resulting from the expropriation proceedings, highlighting the slowness of the authorities in taking steps to vacate the premises and in offering the applicant companies compensation.
It further found a violation of Article 6 in so far as the applicant companies had not had access to court between 1993 and 2009, given that access to the Land Arbitration Board (LAB) was limited solely to the Commissioner of Land.
Moreover, until 2009 the LAB did not fulfil the requirements of an independent and impartial tribunal given its composition according to the law as it stood before the 2009 amendments. It noted on the one hand that, in practice, the chairperson was appointed by the President, but for no specified duration and substitutions were made by the Chief Justice (whose role included the assignment of functions to the members of the judiciary). However, the lack of provision for necessary substitutions could not lead to issues of independence. The fact that the chairperson was an already appointed magistrate or judge sufficed to satisfy the independence guarantees and the fact that such a judge or magistrate could be replaced did not detract from those guarantees unless it was shown that it had been done for purposes of punishment. On the other hand, the constitutional jurisdictions had already held (in previous domestic-case law) that the LAB did not fulfil the requirement of independence and impartiality because of the method of appointment of its technical members before the 2009 amendments. Nevertheless, the latter amendments provided that the technical members, who assisted the chairperson in his decision, would now be appointed by the chairperson. Moreover, the latter’s decision was subject to appeal before the Court of Appeal. It followed that the same issues did not arise post 2009, thus the applicant companies had suffered a violation of their right to have their claims determined by an independent and impartial tribunal solely until 2009.
Furthermore, in the court’s view, the applicant companies were also still suffering a violation of their right to a fair trial within a reasonable time in connection with the proceedings which were at the time in their preliminary phase, in so far as the Commissioner of Land had not yet officially notified the owners (or curators on their behalf) allowing them to challenge the compensation.
The court further noted that while according to the law the obligation to act was upon the Commissioner of Land and owners should not be required to take judicial steps to impose a term for him to act, the fact that the applicant companies had not undertaken such judicial steps could affect the compensation awarded.
The court rejected the applicant companies’ claims for material damage without prejudice to proceedings which they could bring before the LAB which could now be considered independent and impartial – it being chaired by a judge or magistrate who fulfilled the relevant guarantee - and whose decisions could also be appealed. It awarded each applicant company EUR 10,000 in non-pecuniary damage (known in the domestic system as moral damage) bearing in mind that they each were owners of a third undivided share of the properties. The court also ordered the applicant companies to pay half the costs of the proceedings.
Both parties appealed.
By two separate judgments of 31 May 2013 the Constitutional Court rejected the defendants’ appeal and upheld the applicant companies’ appeal in part. It confirmed the first-instance judgment, extending the scope of certain violations and augmenting the amount of compensation awarded.
The Constitutional Court confirmed the violations of Article 6 (access to court and length of proceedings) and Article 1 of Protocol No. 1 to the Convention in so far as in the absence of a Notice to Treat issued by the Commissioner of Land the applicant companies had had no access to court from 1993 to 2009. However, these violations persisted further, in so far as even after the declaration of 2009 and the Commissioner’s deposit in court of the offer made to the applicant companies, he had failed to notify the owners as required by law with the consequence that proceedings were stagnant and no access to court by the applicant companies was possible as a result of his inaction. Indeed, the authorities had slacked all throughout the process. Similarly, the Constitutional Court confirmed that the applicant companies’ failure to bring judicial proceedings to oblige the Commissioner to act could only have a bearing on the award of compensation but not on the substance of the claim.
It further confirmed the public interest of the taking, which persisted to date since, despite the delay, the Government was still pursuing the aim it had originally intended for the property.
The Constitutional Court also confirmed the lack of independence and impartiality of the LAB, however not only until 2009. The Constitutional Court considered that, even following those amendments the law remained deficient given the insecurity of tenure of the technical members of the board, on whose technical advice the chairperson had to base his or her decision. While it confirmed the first-instance court’s findings concerning the role of the chairperson, it observed that the technical members were still subject to reappointment (by the President of Malta, on the advice of the executive, which was perennially a party to the proceedings before such board). Although the role of the technical members was subordinate to that of the chairperson (who following the amendments was not bound to follow the experts unanimous report), in practice it was decisive in so far as the chairperson (a legal person without the necessary technical knowledge) was undoubtedly influenced by the decision of the technical members when considering technical matters. As stated in previous domestic case-law, at least in the mind of an objective observer, the possibility of the technical experts being reappointed could be an incentive for such members to determine low values for expropriated property in order to remain in the good graces of the executive who had the power to keep them in office. Thus, such a body did not fulfil the guarantees of independence and impartiality. In the specific circumstances those failings could not be cured by the Court of Appeal, which was not in a position to interfere with the conclusions of the technical members of the board.
The Constitutional Court still considered that material damage had to be awarded by the LAB in separate proceedings; it thus solely awarded non-pecuniary damage in the amount of EUR 15,000 to each applicant company. It ordered the applicant companies to pay a third of the costs of the appeal proceedings and confirmed the costs as ordered at first-instance for those proceedings. It further directed that the judgment be notified to the Speaker of the House of Representatives.
B. Relevant domestic law
The Land Acquisition (Public Purposes) Ordinance (Chapter 88 of the Laws of Malta), in so far as relevant, reads as follows:
Section 3
“The President of Malta may by declaration signed by him declare any land to be required for a public purpose.”
Prior to the amendments introduced in 2002, the Land Acquisition (Public Purposes) Ordinance provided that:
Section 12 (1)
“...the competent authority shall give to the owner a notice ... by means of a judicial act, stating the amount of compensation, as shown in a valuation to be attached to the notice to treat.”
Section 13 (1)
“The amount of compensation to be paid for any land required by a competent authority may be determined at any time by agreement between the competent authority and the owner ...”
Section 22
“If the owner shall by a judicial act decline to accept the offer made by the competent authority, the matter shall be brought before the Board by an application to be made by the competent authority, and the Board shall give all necessary orders or directions in accordance with the provisions of this Ordinance.”
Following amendments in 2002, Section 9 of the Ordinance, in so far as relevant, read as follows:
“(1) Whenever the President of Malta declares that any land is required for a public purpose, the competent authority shall cause a copy of such declaration (together with particulars sufficient for the purpose of identifying the land) to be published in the Government Gazette, in at least two local newspapers (one of which must be a newspaper published in English and the other a newspaper published in Maltese) and on the notice board of the office of the Local Council of the locality where the land is situated.
(2) The competent authority shall also file a copy of the declaration and of the particulars in the registry of the Board, and shall cause a copy thereof to be served through the Board in the manner prescribed by the Code of Organisation and Civil Procedure on every owner of and on every other party having a legal interest in the land to which the declaration refers, of whose existence and identity the competent authority is aware.”
Following amendments in 2009, Section 23 and 24 of the Ordinance, in so far as relevant, read as follows:
Section 23
“(1) There shall be a Board to be known as the Land Arbitration Board.
(2) The Board shall consist of a Chairman who shall be appointed by the President of Malta. The Chairman shall be a person who holds or has held the office of judge or a person who holds the office of magistrate.
(3) The President of Malta may appoint several such judges or magistrates to sit on the Board, but only one such judge or magistrate shall sit in any one case.
(4) The President of Malta shall also appoint a Panel of Architects and Civil Engineers for the purpose of assisting the Board in the valuation of land and in other technical matters. The said Panel of Architects and Civil Engineers shall be appointed from among persons who hold the warrant to practice as architect and civil engineer according to the provisions of the Periti Act and who have practised that profession in Malta for not less than seven years.
(5) The provisions of articles 733, 734, 735, 737 and 739 of the Code of Organization and Civil Procedure shall apply to the Chairman and to the members of the Panel and any exception to any member of the Panel shall be decided by the Chairman and shall not be subject to appeal.”
Section 24
“(3) The members of the Panel shall be appointed for a period of three years and may be reappointed.”
The law does not provide for the procedure through which a Chairman is appointed or revoked or changed, nor does it specify a term of office, or the grounds on which termination or substitution may occur.
In practice the removal of the Chairman was usually ordered by the Chief Justice but not published in the Government Gazette unlike an appointment.
C. Obligations
Article 1078 (b) of the Maltese Civil Code, Chapter 16 of the Laws of Malta, in so far as relevant, reads as follows:
“Where the time for the performance of the obligation has been left to the will of the debtor, or where it has been agreed that the debtor shall discharge the obligation when it will be possible for him to do so, or when he will have the means for so doing, the following rules shall be observed:
(b) if the subject-matter of the obligation is other than the payment of a sum of money, the time within which the obligation is to be performed shall be fixed by the court according to circumstances.”
COMPLAINTS
The applicant companies complain under Article 1 of Protocol No. 1 to the Convention that their property had been expropriated without satisfying the public interest requirement, in so far as twenty years after the taking no use had yet been made of the property. Furthermore, to date they had not been paid any compensation for the property.
In this connection they also complain under Article 6 that the domestic authorities had failed to carryout proceedings within a reasonable time, and that they had had no access to an independent and impartial tribunal to initiate compensation proceedings. This situation remained the same to date, despite the Constitutional Court judgment, and they still did not have access to an impartial and independent tribunal to whom to address their compensation request, both because the commissioner had not issued a notice to treat and because the LAB was not an Article 6 compliant tribunal, due to the legislation concerning the appointment and removal of its members.
In consequence the applicant companies consider that they remained victims of the alleged violations and given the Constitutional Court’s failure to give redress, including adequate compensation, it could not be considered as an effective remedy for the purposes of Article 13.
They further consider that the order to the applicant companies to pay part costs of the constitutional redress proceedings in which they had been successful also constituted a hindrance to their access to court under Article 6.
QUESTIONS TO THE PARTIES
1. Have the applicant companies been deprived of their possessions in the public interest, within the meaning of Article 1 of Protocol No. 1, particularly given the delay in actuating the planned project (see, mutatis mutandis, Vassallo v. Malta, no. 57862/09, 11 October 2011)?
2. Did the deprivation of the applicant companies’ properties give rise to a disproportionate interference with their property rights, particularly in view of the delay leading to the lack of compensation to date?
3. Did the applicant companies have a fair hearing in the determination of their civil rights and obligations in accordance with Article 6 § 1 of the Convention? In particular, given the Commissioner of Lands’ inaction and the current state of affairs, was the applicant companies’ right to access to court and to have proceedings heard within a “reasonable time” by an independent and impartial tribunal respected?
4. Bearing in mind the constitutional jurisdictions’ order of costs to be paid by the applicant companies, was the applicant companies’ right to access to court to raise their human rights violations respected (see Francesco Quattrone v. Italy, no. 13431/07, 26 November 2013)?
5. Did the applicant companies have at their disposal an effective domestic remedy for their Convention complaints as required by Article 13 of the Convention? In particular, in circumstances such as those of the present case, where an applicant suffers a violation as a result of the failings of the domestic system concerning compensation proceedings, can constitutional redress proceedings be considered “effective” in the sense of preventing the continuation of the alleged violation and providing adequate redress for any violation that has already occurred? In view of the relevant domestic law and practice, what are the limits to the powers of the courts of constitutional jurisdiction in granting redress for Convention violations, and in particular pecuniary damage when this is due? The parties are requested to substantiate their replies by means of examples of recent court decisions in connection with breaches of this kind.
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