The First Hall of the Civil Court (Constitutional), presided over by Mr Justice Raymond C. Pace, on May 31, 2011, in the case “Maria Xuereb and others vs the Director of Lands”, held, among other things, that the failure of the state to give compensation for the expropriation of private property within a reasonable time, even for that part which was used for a public road, constituted a breach of human rights.

The facts in this case were as follows.

The authorities had expropriated two properties belonging to Maria Xuereb for an alleged public purpose, as announced in the Government Gazette dated July 25, 1991, and by virtue of an order for possession and use dated November 30, 1989.

It was stated in notification No. 193 in the Government Gazette that the government required tenements numbers 57 to 61, 13 Alley 2, 12 Alley 2, 11 Alley 2 and 1 Alley 3 in Ħerba Street, Birkirkara, for a public purpose, and this by title of “public tenure” and not for use and possession. This case was limited to No. 21, Alley 2, Ħerba Street, Birkirkara.

Maria Xuereb was aggrieved as she had not received fair compensation, despite the passage of time, for the loss of her property.

While part of the property was used in the construction of a public road, another part was occupied by third parties for their personal and private use.

Faced with this situation, Maria Xuereb proceeded by filing a human rights action against the Director of Lands. She requested the First Hall of the Civil Court

to declare that her rights were violated; that she was not paid fair compensation, more so when her property was used by third parties for their private purpose;

to declare that she was deprived of her property, presumably for a public purpose without fair compensation, as required by the Constitution and Article 1 Protocol No. 1 of the European Convention of Human Rights;

to liquidate fair compensation to be awarded to her; and

to condemn the defendant to pay her fair compensation as well as to give such other orders which it deemed to be appropriate.

The Director of Lands, in reply, submitted that this court had no jurisdiction to decide this case. Compensation for the property, taken by public tenure, was regulated by article 27 (13) of Chapter 88. Compensation was to be determined by the Land Arbitration Board.

The Director of Lands asked the court to decline to exercise its powers in terms of article 46 (2) of the Constitution and article 45 of Chapter 319.

It was stated that Ms Xuereb had at her disposal ordinary remedies before the board, which could fix compensation in terms of article 27 (13) of Chapter 88.

As regards the merits, the Director of Lands pleaded that Ms Xuereb’s claims were unfounded in fact and at law.

He denied any human right infringement.

In respect to that part of her property which was occupied by a third party, the Commissioner in his letter dated April 8, 2005 offered to release it back to her. In practice, however, this was not possible as the property was occupied by third parties.

The court noted that

• the Director of Lands was aware of the unlawful development by a third party;

• proceedings before the board were still pending and compens-ation had not yet been awarded as she still had to prove her title.

On May 31, 2011, the First Hall of the Civil Court gave judgment against the Director of Lands. The following reasons were given for its decision.

Jurisdiction: The court affirmed its jurisdiction to decide this case. It felt that it had an obligation to determine fair compensation, provided the other elements mentioned in article 37 of the Constitution and Article 1 of the First Protocol were proven. It was of the opinion that it should also exercise its constitutional powers and investigate whether there was a human rights violation.

It appeared that the authorities had not taken appropriate action after they noticed that part of the land had been occupied by a third party. They had simply offered to release this area back to its owner, something which they were unable to do because of the unlawful development.

2. Authority of the state: The court said that, although the power of the state to expropriate private property was necessary in a demo-cratic society in order to promote social and economic development, its power was not absolute. The authorities were subject to the scrutiny of the court. Their powers had to be exercised within the parameters of the law. This power of the state was exceptional, and could only be used according to law and only insofar as necessary.

The expropriation of private property had to be in the public interest. While it was not necessary to identify a particular public pro-ject why the land was expropriated, “public utility” had to result positively.

The state could not plead that there was no longer any public purpose for the property (re: “P. Cachia vs Attorney General et Constitutional Court”, dated December 28, 2010).

In this case, the court said, the authorities had expropriated pro-perty but the Director of Lands had not been careful to ensure that the entire property was used for a public purpose. It had allowed the property to be used and occupied unlawfully by a third party, without ever taking action to evict him.

In respect of such portion of land, it could not release it to its owner because of the third party; and in respect to the other part which was used for a public purpose, no compensation had been paid.

3. Deprivation of property: The expropriation of property by public tenure amounted to deprivation of property and, even if this was done according to law, it had to be in the public interest and the concept of proportionality had to be observed, maintained the court.

The European Court of Human Rights held that “in the absence of a formal expropriation, the court considers that it must look behind the appearances and investigate the realities of the situation complained of (see, mutatis mutandis, the Van Droogenbroeck judgment of June 24, 1982, Series A No. 50, p. 20, par. 38, par. 24). Since the Convention is intended to guarantee the rights that are “practical and effective”, it has to be ascertained whether that situation amounted to a de facto expropriation” (“Sporrong and Lonnroth vs Sweden”).

In “James and others vs United Kingdom”, dated February 21, 1986, the European Court of Human Rights held that “the notion of public interest is necessarily extensive. In particular, as the Commission noted, the decision to enact laws expropriating property will commonly involve consideration of political, economic and social issues on which opinions within a democratic society may reasonably differ widely. The court, finding it natural that the margin of appreciation available to the legislature in implementing social and economic policies should be a wide one, will respect the legislature’s judgment as to what is ‘in the public interest’ unless that judgment be manifestly without reasonable foundation. In other words, although the court cannot substitute its own assessment for that of the national authorities, it is bound to review the contested measures under Article 1 of Protocol No. 1 (P1-1) and, in so doing, to make an inquiry into the facts with reference to which the national authorities acted.”

Reference was made to the decision of ECHR in “Monasteries vs Greece” 1992. In this case a law was passed to transfer the property of the monasteries to the state, the presumption was that the property belonged to the state unless the monasteries could prove their title. The court considered this law as creating disproportionate interference by the state, as the state had effectively deprived the monasteries of their property.

As regards compensation the ECHR said: “Compensation terms under the relevant legislation are material to the assessment, whether the contested measure corresponds to the assessment, whether the contested measure respects the requisite fair balance and, notably, whether it does not impose a disproportionate burden on the applicants. In this connection, the taking of property without payment of an amount reasonably related to its value will normally constitute a disproportionate interference and a total lack of compensation can be considered justifiable under Article 1 (P1-1) only in exceptional circumstances. Article 1 (P1-1) does not, however, guarantee a right to full compens-ation in all circumstances, since legitimate objectives of ‘public interest’ may call for less than reimbursement of the full market value.”

The interference had to be legitimate. Compensation had to be fair, as well as proportionate with the loss and inconvenience suffered by the owner – re: “J.J. Edwards pro et noe vs Commissioner of Lands and the Attorney General” (PA dated October 22, 2004). The court noted that, in respect to that part which was occupied by a third party, expropriation was certainly not in the public interest.

The court said that the owner had a right to fair and adequate compensation.

It was of the opinion that, in the circumstances, Ms Xuereb had to suffer very onerous conditions by the expropriation of her property under article 27(13) of Chapter 88, especially since no compensation had been paid.

It could not be stated that the state had used all the means at its disposal to strike a balance between the rights of the individual and the needs of society and public interest.

An excessive burden had been placed on the owner – a burden which was not proportionate. The court said that the failure to give compensation within a reasonable time, even for that part which was used for a public road, constituted a breach of human rights.

It awarded €11,141 compens-ation for that part which was used unlawfully by a third party and €5,000 for that part used as a road.

For these reasons, the court decided as follows:

It declared that the owners’ human rights were violated insofar as they did not receive fair compensation, as well as in view of the fact that part of the property was used for private needs by a third party and not for a public purpose.

It declared that owners were deprived of their private property, presumably for a public purpose without fair compensation as required by the Constitution and this in violation of article 37 of the Constitution and article 1 Protocol No. 1 of the European Convention of Human Rights.

It said that compensation should have been given under article 27 (13) of Chapter 88 and this was not paid for reasons only imputable to the Commissioner.

It liquidated and condemned the Director of Lands to pay €16,141 compensation, with interests, accruing from the date of this decision, and without prejudice to any additional compensation to be granted under the ordinance.

Dr Grech Orr is a partner at Ganado & Associates.

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