FOURTH SECTION
DECISION
Application no. 28182/15
VICA LTD
against Malta
The European Court of Human Rights (Fourth Section), sitting on 20 June 2017 as a Chamber composed of:
Ganna Yudkivska, President,
Faris Vehabović,
Iulia Motoc,
Carlo Ranzoni,
Georges Ravarani,
Marko Bošnjak,
Péter Paczolay, judges,
and Andrea Tamietti, Deputy Section Registrar,
Having regard to the above application lodged on 29 May 2015,
Having deliberated, decides as follows:
THE FACTS
1. The applicant company, Vica Ltd, was registered in Sliema, Malta in 1969. It was represented before the Court by Dr S. Grech and Dr I. Refalo, lawyers practising in Valletta.
A. The circumstances of the case
2. The facts of the case, as submitted by the applicant company, may be summarised as follows.
1. Background to the case
3. The applicant company owned six pieces of land which were expropriated by the Government on 16 May 1975. The case before the Court only concerns one of those six (the sixth one).
4. In so far as relevant, on 5 July 2000 the applicant company was informed, by means of a notice to treat, that it was being offered 10,200 Maltese liri (MTL approximately 23,760 euros (EUR)) for the (sixth) piece of land, which measured 952 sq.m.
5. By means of a judicial letter of 25 July 2000 the applicant company refused the offer and claimed compensation amounting to MTL 45,210 (EUR 105,311) based on an ex parte architect report which considered that, according to the Government’s architect’s valuation, part of the land was agricultural land.
6. In the absence of any agreement, in the same year, the applicant company instituted constitutional redress proceedings, complaining under Article 1 of Protocol No.1 to the Convention and Article 6 of the Convention about the delay in the payment of compensation (in respect of all the pieces of land). The applicant company was successful and by a final judgment of 3 February 2012 the Constitutional Court awarded it EUR 10,000 in compensation for non-pecuniary damage. The costs were to be borne by both parties.
2. Proceedings before the Land Arbitration Board
7. Pending the above constitutional proceedings and following action taken by the Commissioner of Lands, on 7 August 2000 proceedings before the Land Arbitration Board (LAB) were commenced to determine the compensation due.
8. In 2004, pending those proceedings, the Government returned part of the land to the applicant company. In consequence the remaining part of the sixth piece of expropriated land amounted to an area of 485 sq.m.
9. The LAB were not informed of the return of the property.
10. During the proceedings, technical experts appointed by the LAB established the value of the (entire) sixth piece of land as EUR 378,435, considering that for the most part, it was to be classified as building land.
11. By a decision of 18 March 2010 the LAB awarded the applicant company compensation for the six pieces of land mentioned in paragraph 3 above. In connection with the sixth piece of land, the subject of the proceedings before the Court, the LAB awarded EUR 378,435 (for the entire piece of land). It referred to Article 25 of the Land Acquisition (Public Purposes) Ordinance, which provided that where the technical members of the board were unanimously in agreement, the board was bound to award compensation in accordance with the valuation of the technical members. It also awarded interest and ordered that the costs be divided by the parties in proportion.
12. The Commissioner of Lands appealed, claiming, inter alia, that the Board had wrongly applied the law in determining the compensation, because by means of transitory provisions enacted in 2004 the LAB could now no longer award more than a claimant would have claimed.
13. During the proceedings the applicant company pleaded that the application of the relevant provisions of Act XVII of 2004 had breached its rights under Article 1 of Protocol No. 1 to the Convention.
14. By a judgment of 5 December 2014 the Court of Appeal upheld the appeal in so far as Article 25(1) of the Ordinance had retroactive application in terms of the transitory provisions contained in Article 4 of Act XVII of 2004. It followed that the award of compensation could not exceed that claimed by the applicant company. Adjusting the claim to the area of the sixth piece of land which had not been returned and for which the applicant company was owed compensation, the court awarded the applicant company EUR 53,651 and ordered it to pay costs. As to the constitutional plea raised by the applicant company in this regard, the Court of Appeal held that this legal matter had already been examined in two constitutional cases, namely Commissioner of Lands vs Maria Theresa Caruana Gatto et, of 6 September 2010 and Neriku Confectionary Ltd vs Director of Lands of 28 March 2014, in which it was held that there had been no breach of the claimants’ property rights given that they had been awarded the sum they had actually requested in compensation (irrespective of the fact that the independent architects had estimated the land to be worth more).
15. The applicant company did not institute a new and separate set of constitutional proceedings to complain about the matter, considering that it would be futile given the established case-law.
B. Relevant domestic law and practice
1. Domestic law
16. Before the 2004 amendments described below, in awarding compensation for the value of the land the Chairman of the LAB was bound by the valuations given by two experts (which formed part of the LAB), when these were unanimous in their valuation.
17. Act XVII of 2004 added a proviso to Article 25 (1) of the Land Acquisition (Public Purposes) Ordinance, Chapter 88 of the Laws of Malta, amending it to read as follows:
“(1) The Board shall be competent –
...
(e) to assess the amount of compensation payable under any of the provisions of this Ordinance and for that purpose to declare whether any area is a building site or agricultural or waste land;
...
... Provided that the amount of compensation to be assessed by the Board in accordance with the provisions of paragraph (e), shall not exceed the higher amount of compensation as proposed by any of the parties.”
18. The transitory provision, section 4(2) of the 2004 Act, reads as follows:
“The provisions of Articles 25 and 31 of the Ordinance as amended by this section shall apply to any proceedings relating to any land covered by any declaration issued under Article 3 of the Ordinance, even if issued prior to the date of the coming into force of this section.”
19. The relevant parts of Article 27(1) of the Ordinance, regarding compensation, read as follows:
“ (1) Without prejudice to any special provision contained in this Ordinance, in assessing compensation the Board shall act in accordance with the following rules:
(a) no allowance shall be made on account of the acquisition being compulsory;
(b) the value of the land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise: (...)”
2. Domestic case-law
(a) Commissioner of Lands vs Maria Theresa Caruana Gatto et, Constitutional Court judgment of 6 September 2010
20. In circumstances similar to the present case, the Constitutional Court examined, inter alia, the complaint of the claimants in that case concerning the retroactive application of the 2004 Act, which had allegedly violated their legitimate expectation to compensation as established by the laws in force at the time of the taking, thus denying them part of their compensation.
21. By a judgment of 6 September 2010 the Constitutional Court – which was bound (by procedural rules) to look into the matter only under Article 1 of Protocol No. 1 – found no violation of the claimants’ property rights.
22. It considered that before the 2004 Act the LAB could have awarded compensation higher than that requested by the parties, so rather than clarifying the law the Act limited the compensation that could be awarded. Nevertheless, the claimants did not have a “possession” within the meaning of Article 1 of Protocol No. 1, in that they had had no legitimate expectation of receiving an amount higher than that established by their ex parte expert, which they had claimed. Specific to that case the court noted firstly that when the 2004 Act had come into effect the report of the new architects had not yet been included in the case file. Secondly, before the 2004 Act the claimants had not claimed compensation higher than that awarded, and thirdly, when the tribunal architects were appointed the claimants had been aware of the new legislation. Moreover, the claimants had received fair compensation since they had been awarded the entire sum they had asked for. The Constitutional Court noted that it was clear that the valuation made by the experts appointed by the tribunal was in stark contrast to the valuations made by the previous architects and the ex parte experts; their valuation was therefore arbitrary and disproportionate, as no reasons had been given to justify the huge difference. The 2004 Act had therefore not violated the claimants’ rights under Article 1 of Protocol No. 1.
(b) Neriku Confectionary Ltd vs Director of Lands, Court of Appeal judgment of 28 March 2014
23. In circumstances similar to those in the present case, the claimants raised a constitutional issue arguing that the application of the relevant proviso of the 2004 Act in their case had breached their right to fair compensation. The issue was raised before the Court of Appeal before which they were appealing against a decision of the LAB awarding them compensation. The Court of Appeal shared the conclusions of the Constitutional Court in the case of Commissioner of Lands vs Maria Theresa Caruana Gatto et of 6 September 2010 and dismissed the claim on the basis that the claimants had obtained the sum they had requested.
COMPLAINTS
24. The applicant company complained under Article 1 of Protocol No. 1 to the Convention that it had not received adequate compensation for the taking of the land. It further complained under Article 13 in conjunction with Article 1 of Protocol No. 1 that it had had no effective remedy given that, as also confirmed by the Court of Appeal, the matter had already been decided by the domestic courts and thus constitutional proceedings would have been futile.
THE LAW
25. The applicant company complained that due to the proceedings being protracted at the hands of the authorities, it had suffered an interference with its property rights as a result of amendments to the law which capped its compensation to that which would have been claimed by it. The Constitutional Court had already pronounced on the matter, finding that the amendments did not breach Article 1 of Protocol No. 1. The applicant company had therefore had no remedy for its grievance. It relied on Article 1 of Protocol No. 1 to the Convention and Article 13, which read as follows:
Article 13
“Everyone whose rights and freedoms as set forth in this convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
Article 1 of Protocol No. 1 to the Convention
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
26. The applicant company complained that to date it had still not received adequate compensation. However, it argued that the law applied retroactively diminishing the compensation was in itself a breach of Article 1 of Protocol No. 1. It relied in this connection on the case of Pressos Compania Naviera S.A. and Others v. Belgium (20 November 1995, Series A no. 332). The applicant company also argued that the interference had had disproportionate results. It noted that its architects had wrongly estimated the land by considering only part of it as building land and the rest as agricultural land. The architects had followed the classification used by the Government officials for the purposes of making the offer at the time of the notice to treat (in 2000). However, it later transpired that most of the land was building land. In justification, the applicant company submitted that ever since the land had been taken in 1975 it had had no immediate contact with the land in question and thus its value on the market.
27. The applicant company further complained about the wording of the law itself, in so far as it could in any event allow a co-owner to obtain more compensation than that claimed by him or her if the LAB decided to award the higher amount claimed by the other co-owner. In addition, the applicant company argued that the domestic court’s retroactive application of the 2004 amendment had not been in accordance with the law, in particular its wording. It argued that the transitory provision had not required that the new proviso (see paragraph 18 above) be applied to proceedings already pending before the LAB. Had it so required, it would have been worded accordingly, as were other provisos of the like in which the law explicitly stated that the amendment would apply to pending proceedings. In the applicant company’s view the proviso solely referred to proceedings yet to be commenced but not pending ones.
28. In the light of the various arguments raised by the applicant company and the facts as presented, the Court considers it useful to specify the scope of the present case. Firstly, the case concerns only the sixth plot of land. Secondly, the applicant company has already been successful (and obtained non-pecuniary compensation) in domestic proceedings which found that there was a breach of its property rights (as well as its right to a fair trial within a reasonable time) because of the delay in the payment of compensation (including that related to the sixth plot of land). Beyond that delay, no explanation has been given by the applicant company as to why at the time of the introduction of the application the award had not yet been paid. Indeed in its application the applicant company focused its complaint on the inadequacy of the compensation rather than the fact that it had not yet been paid. As to the complaint about the effects of the law in general, the Court emphasises that the Convention does not provide for the institution of an actio popularis and that its task is not normally to review the relevant law and practice in abstracto, but to determine whether the manner in which they were applied to, or affected, the applicant gave rise to a violation of the Convention (see, among other authorities, N.C. v. Italy [GC], no. 24952/94, § 56, ECHR 2002‑X, and Centre for Legal Resources on behalf of Valentin Câmpeanu v. Romania [GC], no. 47848/08, § 101, ECHR 2014). Furthermore, the applicant company has not raised before the domestic courts or this Court a complaint under Article 6 § 1 of the Convention to the effect that the legislative interference pending proceedings violated its right of access to Court (see in relation to the exact same amendment, Deguara Caruana Gatto and Others v. Malta, no. 14796/11, § 59, 9 July 2013, and, mutatis mutandis, Scordino v. Italy (no. 1) [GC], no. 36813/97, § 111, ECHR 2006‑V). It follows that the Court is confined to examining whether, following the deprivation of its possessions, the application of the law concerning compensation as amended in 2004 in the applicant company’s case was in breach of Article 1 of Protocol No. 1.
29. The Court reiterates that the taking of property can be justified only if it is shown, inter alia, to be “in the public interest” and “subject to the conditions provided for by law”. Any interference with property must also satisfy the requirement of proportionality. As the Court has repeatedly stated, a fair balance must be struck between the demands of the general interest of the community and the requirement of protecting the individual’s fundamental rights, the search for such a fair balance being inherent in the whole of the Convention. The requisite balance will not be struck where the person concerned bears an individual and excessive burden (see Sporrong and Lönnroth v. Sweden, 23 September 1982, §§ 69-74, Series A no. 52, and Brumărescu v. Romania [GC], no. 28342/95, § 78, ECHR 1999-VII).
30. Compensation terms under the relevant legislation are material to the assessment of whether or not the contested measure respects the requisite fair balance and, in particular, whether it imposes a disproportionate burden on the individuals (see Jahn and Others v. Germany [GC], nos. 46720/99, 72203/01 and 72552/01, § 94, ECHR 2005‑VI).
31. Concerning the lawfulness of the measure, in so far as the applicant company complains about the interpretation given to the relevant proviso by the domestic courts (see paragraph 27 above), the Court reiterates that it is not its function to deal with errors of fact or law allegedly committed by a national court unless and in so far as they may have infringed rights and freedoms protected by the Convention (see García Ruiz v. Spain [GC], no. 30544/96, § 28, ECHR 1999-I, and Anheuser-Busch Inc. v. Portugal [GC], no. 73049/01, § 83, ECHR 2007‑I). In the present case, in the absence of any arbitrariness or manifest unreasonableness, the Court cannot call into question the interpretation of the domestic courts of the proviso at issue.
32. In relation to the lawfulness requirement, the Court also notes that it has in previous cases acknowledged that laws with retrospective effect which were found to constitute legislative interference still conformed to the lawfulness requirement of Article 1 of Protocol No. 1 (see, for example, Azienda Agricola Silverfunghi S.a.s. and Others v. Italy, nos. 48357/07 and 3 others, § 104, 24 June 2014, and Arras and Others v. Italy, no. 17972/07, § 81, 14 February 2012). It finds no reason to find otherwise in the present case. Indeed, in various cases the fact that such an interference was provided for by law as required by Article 1 of Protocol No. 1 was not even disputed by the parties (see for example, Maurice v. France [GC], no. 11810/03, § 81, ECHR 2005‑IX; Scordino (no.1) [GC], cited above § 81; National & Provincial Building Society, Leeds Permanent Building Society and Yorkshire Building Society v. the United Kingdom, 23 October 1997, § 79, Reports of Judgments and Decisions 1997‑VII, and Agrati and Others v. Italy, nos. 43549/08, 6107/09 and 5087/09, § 76, 7 June 2011).
33. Furthermore, in the present case there is no contestation as to the public interest of the expropriation.
34. As to the amount of compensation, as stated by domestic case-law under Article 1 of Protocol No. 1 concerning other claimants (see paragraphs 20-23 above), it cannot be said that the applicants in the present case suffered an excessive and individual burden given that they received the amount of compensation requested by them. In so far as in the present case the matter is more intricate given that the applicant company had wrongly estimated the property, it is noted that it engaged its own experts, and the fact that the experts valued the property on the incorrect assumptions of another expert (irrespective of the fact that it was the Government’s expert) can only be its own responsibility, and the responsibility of the State for the matter is therefore not engaged. It follows that in the present case the complaint under Article 1 of Protocol No. 1 is manifestly ill-founded and should be rejected pursuant to Article 35 §§ 3 and 4 of the Convention.
35. Since in the present case the complaint under Article 1 of Protocol No. 1 to the Convention is manifestly ill-founded, Article 13 is not applicable (see, for example, Brincat and Others v. Malta, no. 60908/11 and 4 others, § 139, 24 July 2014). The complaint is therefore incompatible ratione materiae with the provisions of the Convention and should be rejected pursuant to Article 35 §§ 3 and 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 13 July 2017.
Andrea TamiettiGanna Yudkivska
Deputy RegistrarPresident
Full & Egal Universal Law Academy