At the start of 2017, the First Hall of the Civil Court of Malta heard a case brought by Strickland Limited and several members of the Strickland family. The plaintiffs claimed that their innate right to peaceful enjoyment of their property had been breached by the actions of the Housing Authority.
The basis of this court case
One’s innate right to peaceful enjoyment of property is protected by Article 1 of the First Protocol supplementary to the European Convention of Human Rights. In brief, this Article declares that, unless for the public interest, no one should be deprived of their possessions, including property.
There is a clear provision, however, that the State can enforce laws that may breach one’s right to the enjoyment of property in certain cases, including the collection of tax.
A summary of proceedings
In early 2017, Strickland Limited and several members of the Strickland family took the Housing Authority to court following what they deemed to be a breach of their rights. The claim was based on several apartments that form part of a block in Gzira.
Prior to 1968, these apartments were under a sub-emphyteusis agreement with the Admiralty. Once this agreement ended, a State Order was issued to fill the vacant apartments with citizens who were in dire need of accommodation.
Whilst the plaintiffs did not contest that the requisition of vacant apartments was done in the public’s interest, they did contend that damage and strain to the properties led to them to lose some of their value. As a result, when the apartments were eventually de-requisitioned, they had to be sold for a lesser price.
The plaintiffs, therefore, requested that the Court award them due and fair compensation.
The Attorney General, representing the Housing Authority, made several arguments that were struck down by the Court.
During its deliberations, the Court sought precedent with a similar case involving Strickland Limited. In a 2008 case, the Constitutional Court decided in favour of the plaintiff, though it awarded a meagre compensation package of €5,000 to cover moral damages. In addition, it ruled that material damages could be sought in separate proceedings.
The most significant conclusion made by the Court
Since the plaintiffs sought compensation for lost potential earnings, the Court’s most important decisions focused on this matter.
According to the Court, the plaintiffs would have realistically received €46,187.06 yearly from their properties. In reality, they only collected €8,330 in 2016. Whilst discrepancies between market averages and actual rents are normal, the Court found this difference is disproportionate.
The Court, therefore, found that such a discrepancy trumped the measure of discretion enjoyed by the State in legislating the payment of rent to support social housing.
As a result, the Court moved on to consider reasonable compensation. The calculation involved considering the different periods when de-requisitioning took place and the variety of market rent rates across 30 years. The Court remarked that the journey to arrive at the liquidation of compensation was ‘a headache’, and that’s putting it mildly.
Was justice delivered in this case?
Following an extensive calculation process that was based on similar cases heard in Strasbourg, the Court prescribed €526,043 in material damages and a further €60,000 in non-pecuniary damages.
However, both parties protested against the decision as they found it to be unfair. Appeals were lodged accordingly, so this case is not over yet.
Whilst the Court certainly decided in the plaintiff’s favour, it is clear that they do not believe that justice has prevailed.
Nevertheless, what is certain is that trying to reach a just quantum as compensation for damages spanning several decades is absurd. This is one of the reasons behind the decision taken by the European Court of Human Rights to adopt a more systematic and objective approach that strikes a balance between subjectivity and timely justice.