Communicated on 31 August 2018
THIRD SECTION
Application no. 28404/17
Jesmond PORTELLI and Nazzareno PORTELLI
against Malta
lodged on 5 April 2017
STATEMENT OF FACTS
The applicants, Mr Jesmond Portelli and Mr Nazzareno Portelli, are Maltese nationals, who were born in 1968 and 1970 and live in Ħamrun and Imġarr respectively. They are 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 are joint owners of no. 177, Zerafa Street, Marsa (hereinafter “the property”), which they inherited in equal parts from their deceased relative M. in 2006.
The property being decontrolled, in 1966, M. entered into a contract for a temporary emphyteusis in favour of a third party (A.), for the annual and temporary ground rent of 40 Maltese Lira (MTL) (approximately 93 euros (EUR)).
The temporary empytheutical grant expired on 31 March 1983, however A. relied on Act XXIII of 1979 amending Chapter 158 of the Laws of Malta, the Housing (Decontrol) Ordinance, (hereinafter “the Ordinance”), which came into force during the emphyteusis contract, to retain the property under title of lease, at the rent applicable according to law (approximately EUR 186).
Until 2010, A., and after 2006 the applicants, accepted to receive the rent. In 2010 the first applicant filed an application before the Rent Regulation Board (RRB) to evict the tenant and increase the rent but his claim was rejected on 5 May 2014 as A.’s title to the property was valid under the law. Following the application lodged with the RRB in 2010 A. started depositing EUR 186 in court. According to the applicable law, in 1998 the rent had to increase to EUR 308 and in 2013 the rent the owner should have received was EUR 435.68.
2. Constitutional redress proceedings
The applicants instituted constitutional redress proceedings claiming that Section 12 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, and without providing for any procedural safeguards, and thus was in breach of Article 1 of Protocol No. 1 to the Convention. They requested the court to grant redress.
By a judgment of 28 April 2016 the Civil Court (First Hall) in its constitutional competence found a violation of the applicants’ property rights and awarded EUR 16,000 in compensation for damage incurred until the date of its judgment, plus interest. It rejected the applicants’ request to evict the tenant and ordered the applicants to pay their costs of the proceedings.
The court noted that A. had been paying approximately EUR 186 annually from April 1983 to June 2010; for the year running from 1 July 2010 to 30 June 2011 he paid approximately EUR 258; and thereafter he continued to deposit with the court the sum of EUR 186 annually. The court considered that even accepting that legitimate aims might not require market values, the difference between the rent paid and that estimated by the court‑appointed architect [who estimated, inter alia, the rental value in 1983 as being approximately EUR 95, that in 1998 approximately EUR 540 and that in 2015 as being EUR 1,740, annually and that the applicants should have until that date received EUR 23,000] was huge, thus the adequate balance of interests had not been reached and there had therefore been a violation of the applicants’ property rights. The court however considered that Article 1531 B and 1531 F of the Civil Code allowed a possibility of recovering the property. It was not for the court to order the eviction of tenants who also needed protection. Bearing in mind that just satisfaction under the Convention was not equal to damages which could be recovered in ordinary proceedings, the court rejected their claim for damages and awarded EUR 16,000 in compensation for the violation found.
Both the applicants and the defendants appealed, in particular concerning the quantum of compensation.
By a judgment of 25 November 2016, the Constitutional Court upheld the first‑instance judgment in part, it upheld the violation, diminishing however the compensation to EUR 5,000 and ordered that the tenants could no longer rely on the relevant law in future. Half of the costs of the appeal proceedings were to be paid by the applicants.
The Constitutional Court considered that the applicants were not to be penalised for instituting proceedings after a period of inertia. It agreed with the ECtHR’s considerations in this respect as set out in Apap Bologna v. Malta (no. 46931/12, § 46, 30 August 2016). It considered that the time factor was relevant in so far as the disproportionality could have arisen not from the start of the lease but only at a later stage, because the mechanism provided by law to increase the rent over the years did not take account of the increase in rental value on the open market. As to the quantum of compensation awarded the court noted that as appeared from the report of the court-appointed expert it was only at some point between 1998 and 2003 that the rent was no longer proportionate. In the period between 1983 and 1998 there was no drastic disproportionality, indeed it appeared that the rent received by the applicants was even higher than that on the free market.
Bearing in mind this factor, as well as the legitimate aim behind the measure, but also the fact that the violation arose not only in relation to the amount of rent, but also the uncertainty within which the applicants found themselves given that there was no mechanism to recover the property, and the lack of procedural safeguards, the Constitutional Court considered that EUR 5,000 in compensation inclusive of pecuniary and non-pecuniary damage sufficed particularly given its order that the tenants could no longer rely on the relevant law in future. In this connection, the Constitutional Court confirmed that it would not evict the tenant. However, the relevant law being in breach of the Convention, and thus without effect in that part which was incompatible with the Convention, the tenants could no longer rely on it to remain in the property.
B. Relevant domestic law
The relevant domestic law pertinent to this case is set out in Amato Gauci v. Malta (no. 47045/06, § 21-23, 15 September 2009) and Cassar v. Malta (no. 50570/13, § 29-30, 30 January 2018).
COMPLAINT
The applicants complain that they are still the 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)?
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