A termination of lease

The First Hall of the Civil Court, presided over by Mr Justice Tonio Mallia, in the case “Buxom Poultry Ltd vs Commissioner of Lands and Minister of Resources and Rural Affairs” held, among other things, that if there existed such an ordinary remedy, no human right action should be taken before all ordinary remedies were exhausted.

The facts in this case were as follows:

The company, Buxom Poultry Ltd, occupied under title of lease 110 tumoli of land, known as “Tal-Kaboċċi” , limits of Qrendi, where it carried out its commercial activities. The Malta government was the owner of the land.

On April 23, 2010, by way of a declaration of the President, part (45 tumoli) of the property forming part of the lease was declared to be required for a public purpose. The lease covering this area was declared as terminated.

The company was notified of the Presidential declaration by the judicial letter dated May 26, 2010, by the Commissioner of Lands.

The government instead consigned this area to a group of private individuals where 12 dairy farms were located, necessary for milk production for Malta.

The company, while not contesting the right of the government to terminate the lease, claimed that the termination of its lease was not for a public purpose. It alleged requiring all 110 tumoli for its own needs.

It was stated that the Administration’s decision served to benefit a private group of individuals. The company filed a judicial protest holding the Commissioner of Lands responsible for damages.

The Commissioner filed a counter-protest on June 24, 2010, alleging that the land was needed to safeguard the interests of a number farmers who required the land to breed their animals, and this after their land had been taken for purposes of development. The commissioner said that the government had to take into consideration other individuals who also had a right to earn a living.

Aggrieved, the company proceeded by filing a human rights action against the Commissioner of Lands and the Minister for Resources and Rural Affairs. It contended the termination to be in violation of its rights to property – under article 37 of the Constitution, and Article 1 of the First Protocol of the European Convention of Human Rights. It was submitted that:

(1) The leasehold was to be considered as an asset under Article 1 of the First Protocol. Intangible assets, such as goodwill, commercial licences were considered “assets” by the European Court.

(2) This court had power to review decisions of the Administration and revoke an administrative act such as the declaration of the President, if no public purpose was found.

(3) The company claimed that the Administration’s decision to terminate part of the lease was not for a public purpose. The Administration had wide discretion to determine what was for a “public purpose re In James and others vs United Kingdom (February 21, 1986), The European Court held that the notion of “public interest” was necessarily extensive, in particular, as the Commission noted, the decision to enact laws expropriating property commonly involved consideration of political, economic and social issues on which opinions with a democratic society could reasonably differ widely. The court... would respect the legislature’s judgment as to what was “in the public interest” unless that judgment was manifestly without reasonable foundation.”

The court had to consider the legitimate purpose of the decision, and whether it was proportionate. In the James case, the European Court held: “Not only must a measure depriving a person of his property pursue, on the facts as well as in principle, a legitimate aim ‘in the public interest’, but there had to be a reasonable relationship of proportionality between the means employed and the aim sought to be realised. This latter requirement was expressed in other terms in the Sporrong and Lonnroth judgment by the notion of the fair balance that had to be struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights. The requisite balance was not to be found if the person has had to bear ‘an individual and excessive burden’ ... The court considered that a measure had to be both appropriate for achieving its aim and not disproportionate thereto.”

An individual should not suffer an excessive burden. In its application the company requested the court:

(1) To declare that the declaration of the President dated April 23, 2010 was in violation of its human rights: article 37 of the Constitution and Article 1 of the First Protocol of the European Convention of Human Rights;

(2) To declare the Presidential declaration to be null and without effect, as well as to give such other remedies to protect its rights, including the return of the land under the same conditions, which it enjoyed, prior to the declaration of the President.

The Commissioner of Land, in reply, contested the company’s legal action and pleaded, among other things, that the court should decline to exercise its constitutional powers once the company failed to exhaust its ordinary remedies in terms of Article 21 of Chapter 199.

Article 21 (2a) of Chapter 199 provides: “Any person who has an interest in land in respect of which a declaration of the President of Malta as is referred to in sub-article (1) is made, may contest the public purpose of the said declaration before the Land Arbitration Board ...”.

It asked the court to apply the proviso to Article 46 (2) of the Constitution and Article 4 (2) of Chapter 319 and decline to exercise its constitutional powers.

The Commissioner put forward the argument that this lawsuit was filed prematurely. As regards the merits, the Commissioner denied any breach of human rights. The Commissioner argued that the government had wide discretion to determine what comprised a “public purpose”.

The court could not substitute the discretion of the government unless it was clear that there was no public interest or if its act was not proportionate. Reference was made to the case Edoardo Palumbo vs Italy, where the European Court held: “The court reiterates that an interference under the second paragraph of Article 1 of Protocol Number 1 must strike a ‘fair balance’ between the demands of the general interest and the requirements of the protection of the individual’s fundamental rights. There must be a reasonable relationship of proportionality between the means employed and the aim pursued. In determining whether the requirement is met, the court recognises that the state enjoys a wide margin of appreciation with regard both to choosing the means of enforcement and to ascertaining whether the consequences of enforcement are justified in the general interest for the purpose of achieving the objective of the law in question.”

The Commissioner of Land reiterated that the Administration acted in the public interest, in order to safeguard the social and economic needs of the country. He said that the company still had in its possession 65 tumoli, from which it could continue their operations. It was stated that a fair balance was struck between various interests groups.

On December 15, 2010, the First Hall of the Civil Court dismissed the company’s application, and decided not to take cognisance of its application, in terms of Article 46 (2) of the Constitution and Article 4 (2) of Chapter 318 of the Laws of Malta.

The court concluded that it should decline to exercise its constitutional powers once the company failed to exercise its ordinary remedies. The court freed the two defendants, the Commissioner of Lands and the Minister for Resources and Rural Affairs.

The following reasons were given for the court’s decision:

The alternative remedies had to be effective and efficacious, and if a person did not utilise his ordinary remedies out of caprice, he had no right to be allowed to exercise his human right remedy.

If there existed such as ordinary remedy, no human right action should be taken before all ordinary remedies were exhausted.

The lease could be terminated for a public purpose: which was both legitimate and proportionate. Both criteria had to be satisfied. The act had to be in the general interest of society. If an individual suffered a disproportionate and excessive burden, it could not be stated that the act was for a public purpose.

The court concluded that in this case there existed an ordinary remedy, which was also effective. As the company failed to exercise its ordinary remedy, it was justified to apply the provisions of Article 46 (2) of the Constitution, and not consider this case.

Dr Grech Orr is a partner at Ganado & Associates.