The Constitutional Court, composed of Mr Justice Giannino Caruana Demajo, Mr Justice R. Micallef and Mr Justice Tonio Mallia, on December 7, 2010, in the case Philip Grech and others vs Director of Social Accommodation, held, among other things, it was contrary to human rights and not in the public interest for the Administration to requisition private property and allocate it to a political party to be used as a party club.
The facts in this case were as follows:
Philip Grech and others were the owners of house No. 362, St Joseph, Grand Street, Sta Venera.
It so happened that on April 18, 1967 the Administration issued a requisition order (No. 23,691) to expropriate the property, for an alleged public purpose, in order to construct a new traffic by-pass in Sta Venera.
The house was forcibly taken over. The furniture was removed and stored in a warehouse the whereabouts of which were not known to the owners.
The property, however, was not used. After a year, the Administration allocated and leased it to the Malta Labour Party (MLP) as a party club.
At first, the owners refused to recognise their new tenant, and legal action was taken, which owners later decided not to pursue, in view of the fact that, according to Maltese case-law at the time, it was deemed to be permissible for the Administration to requisition private property for the benefit of a political party.
The owners eventually recognised their new tenant and accepted the Lm164 annual rent for their property.
Many years later, on November 23, 2006, the owners filed a human rights action against the Director of Social Accommodation.
The owners stated that requisition order No. 23,691 was ultra vires and an abuse of power, in excess of the powers conferred upon the Administration under article 3 of Chapter 125 of the Laws of Malta.
Article 3 provides that: “If it appears to the Director of Social Housing to be necessary or expedient to do so in the public interest, but only for the purpose of providing living accommodation to persons or of ensuring a fair distribution of such living accommodation, he may requisition any building, and may give such directions as appear to him to be necessary or expedient in order that the requisition may be put into effect and complied with.”
The owners put forward the argument that the requisition was not in the public interest. It was not intended to provide social accommodation nor to have a fairer distribution of property.
They in addition were aggrieved as they had not been adequately compensated.
Faced with this situation they filed a human rights action, requesting the court:
1. To declare the requisition to be in violation of their human rights;
2. To declare the requisition to be null and void;
3. To award them fair compensation and to provide any other remedy, which it felt to be appropriate.
The Director of Social Accommodation, in reply, contested the owners’ legal action. It was submitted in its defence that:
1. The European Convention of Human Rights did not apply to an event which occurred in 1967;
2. The requisition order was issued according to law;
3. The rent was established by the Rent Regulation Board; and
4. There was no violation of human rights in the circumstances.
On November 26, 2009, the First Hall of the Civil Court accepted the owners’ requests. It declared the requisition order to be in violation of their human rights, as protected by the first article, of the First Protocol of the European Convention of Human Rights.
The requisition order was declared to be null. As the compensation given to the owners was not adequate, the court, on an arbitrio boni viri basis, awarded owners €75,000 compensation.
The court considered that the loss of enjoyment of their property was a continuous infringement; re: N. Galea et vs G. Briffa et dated April 16, 2004; Loizidou vs Turkey (ECHR December 18, 1996) where the ECHR said: “The court has endorsed the notion of a continuing violation of the Convention and its effects as to temporal limitation of the competence of the Convention organs. Accordingly, the present case concerns alleged violations of a continuing nature if the applicant, for the purposes of article 1 of Protocol No. 1 and article 8 of the Convention can still be regarded as the legal owner of the land.”
This was also confirmed in the case: D. Mintoff et vs Director of Social Accommodation, dated March 28, 2008.
The requisition order had to be in the public interest and it had to provide for social accommodation. The court noted that, at the time of the issuance of the requisition order and for some time later, the owners did not have adequate ordinary remedies to contest the requisition order, and the use of their house as a party club.
The owners in fact had no effective remedy at the time of issuance of the requisition order. The fact that they had recognised the tenant did not mean that they were precluded from filing this human right action.
The owners were prejudiced by the requisition order, the court said. The rent which they received did not reflect its market value.
The court said that if their property had not been requisitioned, they would not have rented their property at such conditions.
In the case of Ghigo vs Malta (ECHR, dated July 17, 2008), it was held that “as regards a requisition order imposed on the applicant, ... [this] has created a landlord-tenant relationship under which he received only a small amount of rent and a minimal profit, so that he had to bear a disproportionate and excessive burden”.
In Fleri Soler and Camilleri vs Malta (ECHR, dated October 24, 2006), the court said that when a person was deprived of his property, and this in violation of the law, and not in the public interest, there was a violation of the first article of the First Protocol of the European Convention. This article provides three rules:
“The first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the contracting states are entitled, inter alia, to control the use of property in accordance with the general interest. The three rules are not, however, distinct in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should, therefore, be construed in the light of the general principle enunciated in the first rule (see, among other authorities, James and Others vs The United Kingdom, judgment of February 21, 1986, Series A No. 98, pp. 29-30, 37; Beyeler vs Italy [GC], No. 33202/96, 98, ECHR 2000-I; and Saliba vs Malta, No. 4251/02, 31, November 8, 2005).”
The court maintained that this decision was without prejudice to the tenant and had no effect on the lease. Reference was made to the case of Edwards vs Malta (ECHR, dated July 17, 2008) and Fleri Soler and Camilleri vs Malta (ECHR dated July 17, 2008) where it was held that “the court is of the view that the applicants should be awarded just satisfaction based on a reasonable amount of rent which would have provided them with more than a minimal profit...”
The court said that the property suffered a devaluation as a result of the requisition order, and that it was fair to award owners €75,000 compensation.
The Director of Social Accommodation entered an appeal, calling for its revocation. It was argued that the requisition was for a public purpose and that the compensation liquidated by the First Hall of the Civil Court on December 7, 2010 was excessive.
The Court of Appeal gave judgment by accepting the appeal in part. It lowered the compensation to €60,000. It ordered that legal interests should accrue from the date of this decision.
The following reasons were given for the court’s decision.
The court noted that the owners were not requesting the eviction of the MLP. They only contested the “public interest” of the requisition order and asked for fair compensation. In Vella vs Housing Secretary, dated December 30, 1993, it was held that the interest of a political party was not to be mistaken for the general public interest. “Interest” was to be deemed to be “private”, when it did not apply to citizens generally.
The court held that the expropriation of private property to benefit a political party was not in the public interest.
The owners suffered a disproportionate and excessive burden but it felt that the amount of compensation should be reduced, in particular since the requisition order was validly issued, according to case-law obtaining at the time.
Constitutional damages were not equivalent to civil damages.
If a person filed a human right action after the lapse of considerable time, he could not expect to receive the full amount corresponding to civil damages.
In the light of the circumstances of the case, the court assessed compensation to amount to €60,000.
Dr Grech Orr is partner at Ganado & Associates.