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FOURTH
SECTION
CASE OF EDWARDS v. MALTA
(Application
no. 17647/04)
JUDGMENT
(Just
Satisfaction)
STRASBOURG
17
July 2008
This
judgment will become final in the circumstances set out in Article 44
§ 2 of the Convention. It may be subject to editorial
revision.
In the case of Edwards v. Malta,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Nicolas
Bratza,
President,
Lech
Garlicki,
Giovanni
Bonello,
Ljiljana
Mijović,
David
Thór Björgvinsson,
Ján
Šikuta,
Päivi
Hirvelä,
judges,
and
Lawrence Early, Section Registrar,
Having
deliberated in private on 24 June 2008,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 17647/04) against the Republic
of Malta lodged with the Court under Article 34 of the Convention for
the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by Mr Joseph John Edwards, who has dual
nationality, British and Maltese, on 4 May 2004.
- In a judgment delivered on 24 October 2006 (“the
principal judgment”), the Court held that there had been a
violation of Article 1 of Protocol No. 1 as regards a requisition
order which had been imposed on the applicant for more than thirty
years and which had 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
(Edwards v. Malta, no. 17647/04, § 78, 24
October 2006).
- Under
Article 41 of the Convention the applicant, without indicating a
precise amount, claimed just satisfaction covering the difference
between the rent paid to him and the rent he could have obtained on
the market, plus compensation for the damage he had suffered.
- Since
the question of the application of Article 41 of the Convention was
not ready for decision as regards pecuniary and non pecuniary damage,
the Court reserved it and invited the Government and the applicant to
submit, within six months, their written observations on that issue
and, in particular, to notify the Court of any agreement they might
reach (ibid., § 84, and point 3 of the operative
provisions).
- The
applicant and the Government each filed observations, respectively on
12 July 2007 and 23 July 2007.
THE LAW
I. ARTICLE 41 AND ARTICLE 46 OF THE CONVENTION
- Article 41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
- Article
46 of the Convention provides:
“1. The High Contracting Parties
undertake to abide by the final judgment of the Court in any case to
which they are parties.
2. The final judgment of the Court shall be
transmitted to the Committee of Ministers, which shall supervise its
execution.”
A. Damage
1. The parties’ submissions
- The
applicant submitted that as a logical consequence of the Court’s
principal judgment, the Government should have released the property;
however, this had not been done. He recognised the limits of the
Convention with regard to compensation and noted that the Government
had not sought to redress the violation found in the Court’s
principal judgment. He was weary of a situation in which he was given
compensation for the past but not for the future, so that the
situation remained unchanged and might continue indefinitely. He
therefore asked the Court to give the Government directions that
could ensure effective redress for the violation found and that would
bring to an end the circumstances creating it. Consequently, the
applicant sought compensation both for losses suffered and for any
losses that continued to be suffered until the requisition order was
withdrawn. He reiterated, however, that redress would only be
effective on the date of the release of the property.
- The
applicant claimed monetary compensation representing the rental value
as from 1976, the year in which his property was again requisitioned,
to the date of the principal judgment amounting to (26,800 Maltese
Liras (MTL) – approximately 62,433 euros (EUR)). For the period
from 1976 to 1996 he claimed the sum of MTL 4,800 (approximately EUR
11,184) based on an average of MTL 240 (approximately EUR 559) per
year and for the period of 1996 to 2006 he claimed the sum of
MTL 22,000 (approximately EUR 51,268) based on an average of
MTL 2,000 (approximately EUR 4,662) per year. According to
the architect’s valuation submitted by the applicant, the
present rental value of the premises is MTL 2,400 (approximately EUR
5,594) per year. This valuation does not take into account the value
of the field which is separate and distinct and it is also in this
light that the applicant has claimed these amounts. An alternative
method to work out these claims would be to start off with the
current value and work backwards on the basis of inflation figures
which would once more result in a total figure of MTL 26,800
(approximately EUR 62,433) for loss of rents, again not taking into
account the value of the field. To this should be added the loss
suffered due to inflation on the rental values not paid to the
applicant, according to the rates of inflation published by the
National Statistics Office (“NSO”) and interest of 8%
(the legal interest rate) for each of the yearly rents due which were
never paid, excluding the amount of MTL 868 (approximately EUR 2,023)
already paid to the applicant.
- The
applicant further claimed compensation from the date of the judgment
to the date when the property is returned to him with vacant
possession. Since it is impossible to calculate the future loss
according to any fixed data, the applicant submitted that this must
certainly reflect at least the rental value for the year 2006,
increased by the yearly rate indicated in the cost of living index as
published by the NSO. In view of the increase in market value the
applicant claimed a further increase of this amount by 5% every three
years to make up for the increase of the property’s rental
value.
- The
applicant further submitted that the amount of compensation suggested
by the Government would only amount to a twelfth of the property’s
value and consequently would neither redress the violation suffered
nor prevent a further one being perpetrated.
- The
applicant also claimed further expenses he had incurred in relation
to this property, namely MTL 689 (approximately EUR 1,606) for the
cost of repairs to the premises.
- The
Government submitted that they were not in a position to revoke the
requisition order and to evict the tenant from whom the applicant had
accepted rent directly for numerous years. The breach found could,
however, be remedied through additional compensation.
- The
premises in question were requisitioned in 1941 when the rent
applicable according to law (The Rent Restriction (Dwelling Houses)
Ordinance) was MTL 28 (approximately EUR 65) per year. The Government
submitted that the effect of such rent control, which had given rise
to the violation found in the principal judgment, would be remedied
if the rent of the premises was increased periodically according to
the index of inflation on the basis of criteria applicable to
premises which were “decontrolled” in the terms used in
Maltese legislation. The Convention came into force in respect of
Malta on 23 January 1967 and therefore the Government proposed that
the applicant be compensated as follows: the rent of 1967 updated in
accordance with the increase in the index of inflation between 1946
(the year when the index of inflation started to be kept in Malta)
and 1967 was 75.6 points which would translate into an increase of
MTL 49.18 (approximately EUR 115). In accordance with the law
introduced in 1979, the rent of decontrolled premises would have been
renewable every fifteen years, provided that such an increase in rent
could not exceed 100% every fifteen years. Therefore, the next
revision, which would have been in 1982, would have increased the
rent to MTL 98.36, and that would have been the rent payable between
1982 and 1997. The next revision of rent would be in respect of the
period starting in 1997 and the rent would be increased to MTL 196.72
(approximately EUR 459), therefore the amount payable between 1967
and 2007 would have been MTL 4,180.30 (approximately EUR 9,747).
Considering that the amount received by the applicant for the
premises between 1967 and 2007 amounted to MTL 1,088 (approximately
EUR 2,537) the remaining balance to be paid would be MTL 3,092.30
(approximately EUR 7,210). The Government were moreover willing to
pay the applicant the said rent (MTL 196.72) to be increased
every fifteen years in accordance with the index of inflation but
subject to a capping of 100% increase every fifteen years, the next
revision being due to take place in 2012.
- The
Government further submitted that the applicant’s claims were
speculative and that the rental values between 1976 and 2006 had not
been substantiated. Moreover, such valuations did not take account of
the fact that the property was subject to legitimate restrictions on
the use property in the public interest and that the premises were
occupied by a tenant who could not be lawfully evicted by the
applicant or his successors. Determination of just satisfaction could
not ignore the economic and social reality of Malta, where the weekly
minimum wage amounted to EUR 140.
- Rejecting
the applicant’s assertions, the Government presented a deed of
sale from which it appeared that in 2000 the applicant had purchased
five adjacent properties including the one at issue for the price of
MTL 30,100 (approximately EUR 70,000); thus if it was assumed that
the properties were of equal value it was evident that the value of
the property was not that claimed.
- In
respect of the claims for the costs of repairs, the Government
submitted that these had not previously been raised. Moreover, in a
previous letter to the Registry the applicant had explicitly stated
that he was not claiming that the property was damaged.
2. The Court’s assessment
- The
Court recalls that in its principal judgment it held that there had
been a violation of Article 1 of Protocol No. 1 as regards a
requisition order imposed on the applicant, for more then thirty
years, which created a landlord-tenant relationship granting only a
small amount of rent and a minimal profit, causing the applicant to
bear a disproportionate and excessive burden (Edwards v.
Malta, cited above, § 78).
- The
Court will proceed to determine the compensation the applicant is
entitled to in respect of the loss of control, use, and enjoyment of
the property which he has already suffered from 1976 to 2008.
- The
Court observes that there is a considerable difference between the
applicant’s claims and the amount offered by the Government. It
notes that the Government’s calculation is based on the law in
force at the time for “decontrolled premises”. The Court,
in principle is not bound to follow domestic calculations; moreover,
in the present case the Government’s calculations are merely
speculative and based on another legal regime which was not pertinent
to the applicant’s premises. Furthermore, it recalls that in
its principal judgment the Court solely considered whether the
requisition order imposed on the applicant creating a landlord-tenant
relationship with fixed minimal rents infringed the applicant’s
rights under Article 1 of Protocol No. 1. It did not enter into an
analysis of whether the rent control laws in force in respect of
landlord-tenant relationships entered into voluntarily, and therefore
applicable to non-requisitioned property owners, whether the property
was “decontrolled” or otherwise, were compatible with the
Convention.
- In assessing the pecuniary damage sustained by the
applicant, the Court has, as far as appropriate, considered the
estimates provided and had regard to the information available to it
on rental values on the Maltese property market over the past years.
It further considered the legitimate purpose of the restriction
suffered, recalling that legitimate objectives in the “public
interest”, such as those pursued in measures of economic reform
or measures designed to achieve greater social justice, may call for
less than reimbursement of the full market
value and that a total lack of
compensation can be considered justifiable under Article 1 of
Protocol No. 1 only in exceptional circumstances (see James
and Others v the United Kingdom, judgment of 21 February
1986, Series A no. 98, p. 36, § 54; and Jahn and Others v.
Germany [GC], nos. 46720/99, 72203/01 and 72552/01, §
94, ECHR 2005 VI).
- The
Court, making its assessment on an equitable basis and deducting the
amount of rent already paid to the applicant over the years, awards
the applicant the sum of EUR 31,000.
- The
Court reiterates that an award for pecuniary damage under Article 41
of the Convention is intended to put the applicant, as far as
possible, in the position he would have enjoyed had the breach not
occurred (see, mutatis mutandis, Kingsley v. the United
Kingdom [GC], no. 35605/97, § 40, ECHR 2002-IV). It
therefore considers that interest should be added to the above award
in order to compensate for loss of value of the award over time (see
Runkee and White v. the United Kingdom, nos. 42949/98 and
53134/99, § 52, 10 May 2007). As such, the interest
rate should reflect national economic conditions, such as levels of
inflation and rates of interest (see, for example, Akkuş v.
Turkey, judgment of 9 July 1997, Reports of Judgments and
Decisions 1997-IV, § 35; Romanchenko v. Ukraine,
no. 5596/03, 22 November 2005, § 30, unpublished; Prodan
v. Moldova, no. 49806/99, § 73, ECHR 2004-III
(extracts)). It notes that the applicant claimed the statutory rate
of 8 per cent, and that the Government did not make any submission in
this respect. However, it considers that the rate of 5 per cent
interest is more realistic. Accordingly, it considers that 5 per cent
interest should be added to the above amount.
- Hence,
the Court awards the applicant EUR 1,550 under
this head.
25.
In respect of the applicant’s claim for maintenance costs, the
Court considers that there is no causal link between the pecuniary
damage alleged by the applicant and the violation found in the
present case. It therefore makes no award under this head.
- The
Court notes that the Government have not released the
property and that the applicant’s calculation for future rent
has not been met by the Government under the
proposed conditions.
- Indeed
the Court reiterates, as it did in the principal judgment,
that it is not empowered under the Convention to direct the Maltese
State to annul or revoke the requisition order (Edwards v.
Malta, cited above, § 83).
Therefore, the release of the property clearly cannot be an automatic
consequence of the principal judgment as alleged by the applicant.
- However, the Court points out
that by Article 46
of the Convention the High Contracting Parties undertook to abide by
the final judgments of the Court in any case to which they were
parties, execution being supervised by the Committee of Ministers. It
follows, inter alia,
that a judgment in which the Court finds a breach imposes on the
respondent State a legal obligation not just to pay those concerned
the sums awarded by way of just satisfaction, but also to choose,
subject to supervision by the Committee of Ministers, the general
and/or, if appropriate, individual
measures to
be adopted in their domestic legal order to put an end to the
violation found by the Court and to redress so far as possible the
effects. Furthermore, subject to monitoring by the Committee of
Ministers, the respondent State remains free to choose the means by
which it will discharge its legal obligation under Article 46
of the Convention, provided that such means are compatible with the
conclusions set out in the Court’s judgment (see, mutatis
mutandis, Scozzari and
Giunta v. Italy [GC], nos. 39221/98 and 41963/98, § 248,
ECHR 2000 VIII).
- Accordingly,
under Article 41 of the Convention the purpose of awarding sums by
way of just satisfaction is to provide reparation solely for damage
suffered by those concerned to the extent that such events constitute
a consequence of the violation that cannot otherwise be remedied
(idem § 249). It is therefore not for the Court to
quantify the amount of rent due in the future; thus, the Court
dismisses the applicant’s claim for future loses, subject to
action being taken by the Government to put an end to the violation
found by putting in place a mechanism which would allow for a fair
amount of rent to be paid in future years (see paragraph 28 above).
- Referring
to Article 46 of the Convention, the Court observes that its
conclusion in the principal judgment is a result of shortcomings in
the Maltese legal system, particularly, Maltese housing legislation,
as a consequence of which, an entire category of individuals have
been and are still being deprived of their right to the peaceful
enjoyment of property. In the Court’s view, the unfair balance
detected in the applicant’s particular case may subsequently
give rise to other numerous well-founded applications which are a
threat for the future effectiveness of the system put in place by the
Convention (see Driza v. Albania, no. 33771/02, § 122,
ECHR 2007 ... (extracts)).
- Under
Article 46 of the Convention, once a deficiency in the legal system
has been identified by the Court, the national authorities have the
task, subject to supervision by the Committee of Ministers, of taking
within a determined period of time – retrospectively if needs
be – (see, among other authorities, Scordino v. Italy
(no. 1) [GC], no. 36813/97, § 233, ECHR 2006
and Broniowski v. Poland [GC], no. 31443/96, § 192,
ECHR 2004-V; and Di Mauro v. Italy [GC], no. 34256/96,
§ 23, ECHR 1999-V) the necessary measures of redress in
accordance with the principle of subsidiarity under the Convention,
so that the Court does not have to reiterate its finding of a
violation in a long series of comparable cases (see Driza,
cited above, § 123 in fine).
- In principle it is not for the Court to determine what
may be the appropriate measures of redress for a respondent State to
perform in accordance with its obligations under Article 46 of the
Convention. However, the Court’s concern is to facilitate the
rapid and effective suppression of a defective national legislation
hindering human-rights protection. In that connection and having
regard to the systemic situation which it has identified above (see
paragraph 30), the Court considers that general measures at national
level are undoubtedly called for in the execution of the present
judgment.
- As
regards the general measures to be applied by the Maltese State in
order to put an end to the systemic violation of the right of
property identified in the present case, and having regard to its
social and economic dimension, including the State’s duties in
relation to the social rights of other persons, the Court considers
that the respondent State must above all, through appropriate legal
and/or other measures, secure in its domestic legal order a mechanism
maintaining a fair balance between the interests of landlords,
including their entitlement to derive profit from their property, and
the general interest of the community – including the
availability of sufficient accommodation for the less well-off
– in accordance with the principles of the protection of
property rights under the Convention (see Hutten-Czapska v. Poland
[GC], no. 35014/97, § 239, ECHR 2006 ...).
- It
is not for the Court to specify what would be the most appropriate
way of setting up such remedial procedures or how landlords’
interest in deriving profit should be balanced against the other
interests at stake. The Court would, however, observe that the many
options open to the State include measures setting out the features
of a mechanism balancing the rights of landlords and tenants and
criteria for what might be considered nowadays a “tenant in
need” (which as stated by the Government in the observations
regarding the principal judgment, refers to “individuals who
would not have been able to afford reasonably priced accommodation”),
“fair rent” and “decent profit”.
B. Non-pecuniary damage
- In
view of the distress and anxiety caused to the applicant, who is of
an advanced age, he claimed the amount of MTL 20,000 (approximately
EUR 46,634) by way of non-pecuniary damage.
-
The Government submitted that the applicant had not suffered any
non-pecuniary damage but was willing to pay him MTL 1,000
(approximately EUR 2,331) under this head.
- The
Court considers that the applicant must have sustained feelings of
frustration and stress having regard to the nature of the breach. It
therefore awards EUR 6,000 in respect of non-pecuniary damage.
C. Costs and expenses
- The
applicant claimed MTL 298 (approximately EUR 695) as the cost of the
architect’s valuation as per attached bill, MTL 6,300
(approximately EUR 14,690) as the cost of the applicant’s
travel from the United Kingdom to Malta to pursue and follow up
proceedings connected to his lawsuit and a total of MTL 2,941
(approximately EUR 6,857) for legal costs and expenses incurred
before the domestic courts and this Court, of which MTL 1,007
(approximately EUR 2,346) for court expenses and fees and MTL 1,150
(approximately EUR 2,680) as per attached non itemised bill for the
costs and fees of his legal representative.
- The
Government submitted that these claims had not previously been
raised.
- The
Court notes that these claims were submitted after the delivery of
the principal judgment, which considered the issue of costs and
expenses but made no award as the applicant had failed to submit a
claim under this head. There is therefore no call for the Court to
reconsider that award (see Van Mechelen and Others v. the
Netherlands (Article 50), judgment of 30 October 1997,
Reports of Judgments and Decisions 1997 VII, p. 2431,
§ 12).
- However, the Court accepts that the applicant must
have incurred some costs and expenses in the current proceedings for
obtaining just
satisfaction under Article 41 of
the Convention. According to the Court’s established case-law,
an award can be made in respect of costs and expenses incurred by the
applicant only in so far as they have been actually and necessarily
incurred and are reasonable as to quantum (see Belziuk v. Poland,
judgment of 25 March 1998, Reports 1998-II, p. 573,
§ 49). The Court notes that the only expenses relating to
the current proceedings under Article 41 are the architect’s
valuation and the legal representative’s fees. Neither of the
bills presented was itemised, so that, in respect of the legal
representative’s fees, the Court cannot assess precisely the
cost and expenses actually incurred. In these circumstances, the
Court considers it reasonable to award the sum of EUR 1,200.
Default interest
- The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Holds
(a) that
the respondent State is to pay the applicant, within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, the following
amounts:
(i) EUR
32,550 (thirty-two thousand five hundred and fifty euros) in respect
of pecuniary damage;
(ii) EUR
6,000 (six thousand euros) plus any tax that
may be chargeable, in respect of non-pecuniary damage;
(iii) EUR
1,200 (one thousand two hundred euros) plus
any tax that may be chargeable to the applicant,
in respect of costs and expenses;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amounts at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
- Dismisses the remainder of the applicant’s
claim for just satisfaction.
Done in English, and notified in writing on 17 July 2008, pursuant to
Rule 77 §§ 2 and 3 of the Rules of Court.
Lawrence Early Nicolas Bratza
Registrar President
