The Constitutional Court overturned a judgment delivered in 1999 which had found that certain provisions of the Civil Code relating to the payment of laudemium (premium) on the transfer of property were in violation of the property owners' fundamental human rights.
The Constitutional Court delivered its judgment in a case filed by Vincent Curmi on behalf of Tempesta Ltd, Corinne Ramsay and Marie Angele Marshall against the Prime Minister, Casma Ltd, Malta Investment Management Company Ltd, Insula Ltd (formerly Dragonara Development Ltd) and Peninsula Investments Ltd.
Mr Curmi, Ms Ramsay and Ms Marshall had told the First Hall of the Civil Court they owned the property known as the Dragonara Palace Hotel and Casino, together with almost 74,000 square metres of land at St Julians.
The property had been granted by title of temporary emphyteusis to Kursaal Company Ltd for 120 years commencing on March 9, 1963. The emphyteutical grant had stipulated that, should there be any future transfers of the land, then the applicants would be entitled to payment of a laudemium in the sum of £1 (sterling) per square cane of land transferred.
Kursaal Co. Ltd had redeemed part of the ground rent by not later than July 10, 1963 and, consequently, the ground rent payable was 24,080 Swiss francs per annum.
In 1984, the property was transferred to Malta Development Corporation by judicial sale by auction and MDC paid applicants the laudemium due in the sum of Lm16,802,000. In 1990, MDC transferred the property consisting of the Casino to Casma Ltd and, in the same year, MDC transferred the property consisting of the Dragonara Hotel complex to Mimcol, which, in turn, transferred the property to Dragonara Development Ltd which, in 1993, transferred the property to Peninsula Investments Ltd.
All the transferees claimed that the laudemium they owed to the applicants was not as established by means of the 1963 emphyteutical grant but was, in terms of law, a sum equivalent to one year's ground rent.
The court heard that section 1513 of the Civil Code had been amended after the property was granted on temporary emphyteusis to Kursaal Company Ltd. The amendment to this section stipulated that when laudemium was due, in terms of a public deed, and was greater than the sum of one year's ground rent, then the owner of the land was only entitled to receive one year's ground rent.
Mr Curmi, Ms Ramsay and Ms Marshall submitted that this provision of the law was in violation of their fundamental human right to freedom from deprivation of property.
In 1999, the First Hall of the Civil Court, in its constitutional jurisdiction, upheld the request made by Mr Curmi, Ms Ramsay and Ms Marshall and declared the sections of the Civil Code that dealt with the limitation to laudemium contrary to the Constitution and to the European Convention of Human Rights.
The Prime Minister, Casma Ltd, Malta Investment Management Company Ltd, Insula Ltd and Peninsula Investments Ltd then appealed to the Constitutional Court, composed of Chief Justice Vincent Degaetano, Mr Justice Joseph D. Camilleri and Mr Justice Joseph A Filletti.
When examining the applicants' claim that they had been deprived of their property, the Constitutional Court declared that the essence of deprivation of property was the extinction of the legal rights of the owner. In this case, the amendment to section 1513 of the Civil Code did not have the effect of extinguishing the applicants' legal rights. The amendment had only controlled the manner in which their right to receive a laudemium was regulated.
The Constitutional Court therefore found against Mr Curmi, Ms Ramsay and Ms Marshall and revoked the judgment of the first court. In view of the novelty of the merits of the case, the court declined to award costs.