Communicated on 24 April 2019
THIRD SECTION
Application no. 19579/18
Catherine CAUCHI and others
against Malta
lodged on 20 April 2018
STATEMENT OF FACTS
A list of the applicants is set out in the appendix. They were represented before the Court by Dr M. Camilleri and Dr E. Debono, lawyers practising in Valletta.
A. The circumstances of the case
The facts of the case, as submitted by the applicants, may be summarised as follows.
1. Background to the case
The applicants own property No. 28, Żejtun Street, Marsaxlokk (“the property”), which the first applicant originally owned and later co‑owned with the remaining applicants
On 3 February 1983, the first applicant rented (under title of temporary emphyteusis) the property to a third party, for twenty‑one years, at 60 Maltese liras (MTL) (approximately 140 euros (EUR)) per year. The third party rented the property under title of sub‑emphyteusis to another third party who did the same. Following a number of such transfers the sub‑empyhteutae was a certain J.B.
In February 2004, on the expiry of the contract of temporary emphyteusis, J.B relied on Act XXIII of 1979 amending Chapter 158 of the Laws of Malta, the Housing (Decontrol) Ordinance, (hereinafter “the Ordinance”) to retain the property under title of lease, at the rent applicable according to law. Thus, the first applicant was forced to recognise the tenant and the lease at the rent stipulated by law, in their case MTL 95 (approximately EUR 221) per year.
2. Constitutional redress proceedings
The first applicant, and her husband, eventually superseded by his children (the remaining applicants), instituted constitutional redress proceedings claiming that the provisions of the Ordinance as amended by Act XXIII of 1979 ‑ which granted tenants the right to retain possession of the premises under a lease ‑ imposed on them as owners a unilateral lease relationship for an indeterminate time without reflecting a fair and adequate rent, in breach of, inter alia, Article 1 of Protocol No. 1 to the Convention. They requested the court to award compensation for the damage suffered. The applicants argued that while it was true that at the time when they rented the property in 1983, the law was already in force, they could not have foreseen the inflation in the property market in the following decades. Moreover, they had no other option than to rent the property under title of temporary emphyteusis, in order to avoid it being expropriated or requisitioned as was common at the time.
By a judgment of 2 May 2017 the Civil Court (First Hall) in its constitutional competence rejected the applicants’ claim. The court did not accept that the applicants had no other choice but to rent their property, since, unlike other adjacent property owned by them, there was no imminent risk of it being requisitioned. It noted that the applicants were aware of the law at the time when they decided to rent the property and knew that in 2004 no matter the index of inflation they could not obtain more than MTL 120, approximately EUR 280, per year. It was thus irrelevant that in 2004 the property was estimated as having an annual rental value of EUR 3,060. The applicants also knew that at the end of the emphyteusis the contract would be transformed into a lease and that it would have been nearly impossible to ever get back their property. Thus despite the unfavourable circumstances, there had been no violation of their property rights.
On appeal, by a judgment of 2 March 2018 the Constitutional Court revoked the first‑instance judgment and found a violation of the applicants’ property rights and awarded EUR 10,000 in pecuniary and non‑pecuniary damage combined. It considered that the applicant’s property was at a real and imminent risk of being requisitioned, as was the case of neighbouring properties, which explained their choice to rent out the property under title of temporary emphyteusis. The regime under which the applicants had rented their property could not be considered proportionate as in 2002 the applicants received EUR 221 annually while the market value was around EUR 3,000 annually, thus even assuming the property would not have been rented out all throughout and that the estimate might be a bit high the disproportionality was still evident, and the more time passed the more severe it had become. In awarding damage it also took account of the fact that the tenant will no longer be able to benefit from the amended law. It ordered that costs of both instances be paid by the defendants.
B. Relevant domestic law
The relevant domestic law in relation to the present case is set out in Amato Gauci v. Malta, (no. 47045/06, §§ 19-25, 15 September 2009).
COMPLAINT
The applicants complained that they were still victims of the violation of Article 1 of Protocol No. 1 upheld by the Constitutional Court given the low amount of compensation awarded.
QUESTION TO THE PARTIES
Has there been a violation of Article 1 of Protocol No. 1 to the Convention (see Amato Gauci v. Malta, no. 47045/06, 15 September 2009 and Cassar v. Malta, no. 50570/13, 30 January 2018)?
APPENDIX
Catherine CAUCHI is a Maltese national who was born in 1941, lives in Valletta Jeremy CAUCHI is a Maltese national who was born in 1969, lives in Valletta John CAUCHI is a Maltese national who was born in 1963, lives in Valletta Thomas CAUCHI is a Maltese national who was born in 1964, lives in Valletta
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