European Court of Human Rights

 

 

 

THIRD SECTION

 

 

 

 

 

 

 

 

 

CASE OF BEZZINA WETTINGER AND OTHERS v. MALTA

 

(Application no. 52673/15)

 

 

 

 

 

 

 

 

 

JUDGMENT

 

 

 

 

 

 

STRASBOURG

 

21 January 2020

 

 

 

This judgment is final but it may be subject to editorial revision.

In the case of Bezzina Wettinger and Others v. Malta,

The European Court of Human Rights (Third Section), sitting as a Committee composed of:

          Georgios A. Serghides, President,
          Erik Wennerström,
          Lorraine Schembri Orland, judges,
and Stephen Phillips, Section Registrar,

Having deliberated in private on 10 December 2019,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1.  The case originated in an application (no. 52673/15) 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 six Maltese nationals (see Appendix) (“the applicants”), on 19 October 2015.

2.  The applicants were represented by Dr P. Galea and Dr E. Borg Costanzi, lawyers practising in Valletta. The Maltese Government (“the Government”) were represented by their Agent, Dr P. Grech, Attorney General.

3.  The Government objected to the examination of the application by a Committee. After having considered the Government’s objection, the Court rejects it.

4.  On 18 May 2017 notice of the application was given to the Government.

THE FACTS

I.  THE CIRCUMSTANCES OF THE CASE

5.  The details of the applicants are set out in the Appendix.

A.  Background to the case

6.  On 3 August 1960 the applicants and/or their ancestors (hereinafter “the applicants”), together with C.Z. and Company W.J., acquired, in equal shares, the right of perpetual emphyteusis (a contract granting use of land or a “tenement”, for a stated yearly rent or ground rent to be paid in money or in kind) over a piece of land, located within the limits of two Maltese cities, Birkirkara and Msida. This land, known as “Tal-Ħriereb”, measured approximately 23,606 square metres (sq.m).

7.  On 1 August 1961 the Governor of Malta declared that part of the land in question, measuring approximately 7,531 sq.m., was required for a public purpose. The acquisition of the land was to be made by outright purchase. The applicants (together with C.Z. and Company W.J.) held under title of emphyteusis most of the land affected by the expropriation. In particular the applicants own, jointly, but in different shares, one third of that property.

8.  In a Notice to Treat of 16 May 1964 and 20 May 1964 respectively the Commissioner of Lands offered the applicants (together with C.Z. and Company W.J.) in their capacity as empyhteutae, jointly with the persons having the direct dominium (hereinafter, the “dominus”), 631 British pounds (approximately 1,470 euros (EUR)) for the land expropriated. The dominus and the empyhteutae refused this offer.

9.  On 6 November 1964 the case was brought before the Land Arbitration Board (hereafter the “LAB”) to establish the amount of the compensation due. By a decision of 3 February 1978, the LAB established that the compensation due amounted to 1,161 Maltese liras (MTL) (approximately EUR 2,704) and fixed 15 February 1978 as the date for the publication of the deed of transfer. It further assigned a notary to publish the deed and an advocate to appear on behalf of any absent party. The LAB did not indicate how this amount was to be shared among the interested parties.

10.  Following a request for rectification, due to an error, on 22 September 1981 the LAB gave its decision. It acknowledged that the decision of 3 February 1978 had been based on a wrong measurement of the expropriated land and ordered the correction of this mistake. However, the amount of compensation remained unchanged. The LAB rejected the Commissioner of Land’s request to indicate the respective shares of the dominus and the emphyteutae, reserving the right of the parties to have this matter determined by the ordinary courts.

11.  The dominus and the emphyteutae disagreed on the amount of compensation due to each and the compensation was thus not apportioned. In consequence, the applicants (together with E.Z. - the only heir to C.Z. ‑ and Company W.J.) instituted constitutional redress proceedings. They claimed that the requisition of the “Tal-Ħriereb” land, coupled with the lack of payment of compensation, amounted to a violation of Article 1 of Protocol No. 1. Moreover, they argued that, contrary to Article 6 § 1 of the Convention, their case had not been heard by the LAB “within a reasonable time”.

12.  By a judgment of 24 October 2005, the Constitutional Court found against the applicants. Details concerning these proceedings, as well as further details about the background of the case are set out in Bezzina Wettinger and Others v. Malta (no. 15091/06, §§ 5-37, 8 April 2008).

B.  Proceedings before this Court

13.  In 2006 proceedings were brought before this Court. By a judgment of 8 April 2008 (Bezzina Wettinger and Others, cited abov e) the Court found a violation of Article 6 of the Convention (in respect of the applicants in that case who were direct victims and party to the proceedings - namely, Company W.J. and the ancestor of the first and second applicants in this case, as well as E.Z. who had participated in the redress proceedings - but not in respect of the heirs who were not a party to any of the proceedings, namely the remaining applicants in this case) concerning the length of the proceedings before the LAB which ended on 22 September 1981 (see for details Bezzina Wettinger and Others, cited above, §§ 85-94). It declared the remainder of the complaints inadmissible. In particular the Court found that the claim regarding the alleged inadequacy of the amount of compensation was to be rejected for non‑exhaustion of domestic remedies (ibid. §§ 100‑105), while that concerning the fact that no compensation had yet been paid was manifestly ill-founded, since the compensation had not been paid because the applicants had failed to take the necessary steps to divide up the compensation granted (ibid. §§ 106-114).

C.  Subsequent proceedings

14.  Following this Court’s judgment, on 3 October 2011, the first and second applicant’s father and the other four applicants in this case (together with E.Z. and Company W.J.) brought a fresh set of constitutional redress proceedings complaining about the quantum of compensation.

15.  The complainants argued that the compensation awarded to them by the LAB was not adequate and breached their rights under Article 1 of Protocol No. 1. They requested the court to remedy the situation by annulling the LAB decision, awarding adequate compensation and refunding the ground rent the empyhteutae had paid during the relevant time, as well to award any other damage.

16.  According to the their architect, in 2006, the open market value of the land measuring 7,530 sq.m., considering the most part of it as development land, was 3,780,000 Maltese liras (MTL) approximately EUR 8,805,000. According to the same architect’s report, on the basis of contracts for the purchase of land in the area at the relevant time, the value of the land in 1964 was MTL 7,530 approximately EUR 17,319 (EUR 2,30 per sq.m), and that in 1978 was MTL 52,700 approximately EUR 121,210.

1.  First-instance

17.  By a judgment of 30 October 2014 the Civil Court (First Hall) in its constitutional competence rejected their claim. The court considered that the complainants were not attacking the law concerning compensation [which determined that compensation was to be awarded according to the value of the land at the time of the Notice to treat]. As to the facts, it noted that when the empyhteutae acquired the right of perpetual emphyteusis over the land, they paid the equivalent of 0.08 euro cents per square metre. The expropriation concerned 6,774.54 sq.m and the compensation awarded by the LAB was that of EUR 2,786 therefore the applicants received 0.41 euro cents per square meter, which was much greater than the price they had paid for it. According to the applicant’s architect, in 1964 compensation had to amount to EUR 15,710 (EUR 2.30 per sq.m) while according to the architect appointed by the Commissioner of Land - given that in 1961 the land was outside a development zone - compensation had to amount to EUR 3,610 (0.36 euro cents per sq.m). It followed, according to the court, that the compensation awarded to the empyhteutae was closer to the price at which they had acquired the land, while the compensation estimated by their expert had not taken into consideration the purpose of the expropriation and the use made of the land but rather reflected the price on an open market. It followed that it had not been shown that the compensation awarded had not been adequate.

2.  Appeal

18.  The complainants appealed, noting in particular that the first‑instance court had failed to give consideration to relevant facts which had an impact on proportionality, such as the passage of time and the fact that they had not yet received compensation, the ground rents paid for the property during such time (EUR 605.92 per year), inflation, and the fact that the land was building land, both at the time of the taking as well as later. They relied on ECtHR case-law that had established in various cases that domestic law concerning compensation was in breach of the Convention as it did not take account of the passage of time between the taking and the actual payment. Further the first-instance court had erroneously considered the land as having an area of 6,774.54 sq.m as opposed to 7,531 sq.m. Lastly, they considered that their challenge to the award of the LAB automatically covered the limitations of the law, which was the reason why the LAB could only make low compensation awards.

19.  During these proceedings, on 5 July 2014, the first and second applicants’ father died.

20.  By a judgment of 24 April 2015 the Constitutional Court confirmed the first-instance judgment.

It noted that it could not go further than that requested by the complainants, and that they were solely challenging the amount of compensation. As to proportionality, in the present case - the expropriation procedure had started in 1961 and a notice to treat had been issued in 1964 ‑ no compensation had been paid to date because the complainants failed to determine the shares of all the interested parties and to institute ordinary proceedings regarding such matter. The same as well as other delays on the part of the complainants had also been confirmed by the ECtHR in Bezzina Wettinger and Others (cited above). Furthermore, during the first‑instance proceedings it had been established that the ground rents had been repaid to the applicants. As to the value of the land itself, at the time when it was taken this had been agricultural land thus it had to be valued on that scale and not on one for development as had been done by the ex parte architect. It followed that, even taking into consideration the error of calculation of the size of the land, a fair balance had been struck given the legality of the measure and the public interest in taking the land.

II.  RELEVANT DOMESTIC LAW

21.  The relevant domestic law and practice is set out in Bezzina Wettinger and Others v. Malta (no. 15091/06, §§ 36-48, 8 April 2008).

THE LAW

I.  ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1

22.  The applicants complained that they were still without any compensation five decades after the taking and that the quantum of compensation determined by the LAB could not be considered adequate compensation. They argued that the award was derisory both because it was valued on the basis that it was agricultural land, while in reality it had been used for development, and because the relevant compensation law (Article 27 (1) (b) of Chapter 88 of the Laws of Malta) restricted the amount of compensation to the value of the land at the time of the declaration issued, without any consideration of the time which elapsed until payment, contrary to the Court’s case-law. They relied on under Article 1 of Protocol No. 1, which reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

23.  The Government contested that argument.

A.  Admissibility

24.  The Court notes that the complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.

B.  Merits

1.  The parties’ submissions

(a)  The applicants

25.  The applicants submitted that the property had been within a development area. They presented an architect’s report including aerial photos which showed that there had already been a building on the area in 1957, and that it was in the vicinity of a number of other buildings. Moreover, on the contract of emphyteusis they had bound themselves to spend at least the equivalent of EUR 17,470 on building improvements within three years of the acquisition which showed that the land had not been merely agricultural. Under this engagement the applicants’ ancestor had built his marital home (which was completed in 1965) on part of the property which was adjacent to the part expropriated. Indeed, the Government had not proved that the property was outside the development zone, save for an ex parte architect’s report, instructed by the Government, drawn up fifty-two years after the taking; and no plans, nor property policies were submitted to substantiate such an allegation. According to the applicants the Government could not argue that in 1960/1 it was not developable land but that a year later, when the erection of the University on the expropriated land started, it was developable. While the applicants did not contest the public interest behind the measure, they considered that the Government were acting in bad faith in relation to the compensation.

26.  Without prejudice to the above they considered that even if that were so, compensation should have taken account of its development potential, given that it was expropriated precisely to be built on (as also reflected in local case-law), as there was a difference between land not yet developed and land which could never be developed.

27.  The applicants also noted that the Government’s observations stated that account had been taken, by the LAB, of the “the type of development which was permissible at the time” but again the Government failed to mention any restriction on such development and to substantiate their claim. In any event this was a clear admission that some type of development would at least be possible, therefore it was not acceptable to award compensation on the basis of it being agricultural land.

28.  The applicants noted that the offer of compensation was inappropriate even when compared to the sum of EUR 606 they were paying in ground rent (ċens) and the sum of EUR 20,197 they would have had to disburse (at the earliest in 1963) to redeem such rent ‑ even accepting that a reduction was due given the public interest of the measure. The fact that they remained unpaid to date rendered it even more inadequate.

(b)  The Government

29.  The Government submitted that according to their architect (who valued the property in 1961 at EUR 3,610) the land was situated outside the development zone and was essentially agricultural in nature; the applicants had not proved otherwise. The property had been acquired in connection with a national project. The Government considered that the compensation established by the LAB had taken account of its size, location, and comparative properties, as well as the type of development which was permissible at the time, and the lawfulness of, and public interest behind, the taking, which meant that the market value was not applicable. The Government considered that the Court should bear in mind that in the 1960s and 70s the value of property was considerably low, and the fact that the value of the property had now increased did not render the compensation determined then unfair.

30.  In their subsequent observations the Government submitted a new ex parte report dated 2013 which states that it is in full agreement with the prior report. It also considered that the rural construction on the land at the time only consisted in a small room as storage for agricultural tools. The Government considered that the fact that the applicants had taken a risk, in the emphyteusis contract, could not suffice to render the land developable in the absence of any permits having been issued. They also considered that no proof had been brought concerning the building of a marital home. The Government submitted that the fact that after taking possession of the land the State built the University could not be used against the Government as at the time the Government could embark on a national project without requiring planning authorization. The Government also considered that it being agricultural land, no potential for development could be attributed to it.

2.  The Court’s assessment

31.  The Court refers to its general principles as set out in B. Tagliaferro & Sons Limited and Coleiro Brothers Limited v. Malta (nos. 75225/13 and 77311/13, §§ 67-69, 11 September 2018). In particular, the Court reiterates that compensation terms under the relevant legislation are material to the assessment of whether the contested measure respects the requisite fair balance and, notably, whether it imposes a disproportionate burden on the applicant. In this connection, the taking of property without payment of an amount reasonably related to its value will normally constitute a disproportionate interference that cannot be justified under Article 1. That Article does not, however, guarantee a right to full compensation in all circumstances, since legitimate objectives of “public interest” may call for less than reimbursement of the full market value (see The Holy Monasteries v. Greece, 9 December 1994, §§ 70-71, Series A no. 301‑A, and Papachelas v. Greece [GC], no. 31423/96, § 48, ECHR 1999‑II).

32.  The Court notes that it has already found (in the Bezzina Wettinger and Others judgment of 2008 concerning the same facts) a violation of Article 6 in so far as most of the delay in establishing compensation (i.e. between 1964 and 1981) was due to the authorities (Bezzina Wettinger and Others, cited above, §§ 85-94). However, it also found that the delay in the payment of compensation, from 1981 onwards was the fault of the empyhteutae, including the applicants or their ancestors (Bezzina Wettinger and Others, cited above, §§ 106-114). Nothing appears to have changed since then, and the delay in the payment of compensation from 1981 to date remains the fault of the applicants, as also acknowledged by the domestic jurisdictions. Thus, it remains to be determined whether the award made by the LAB, twenty years after the taking, in 1981 (regardless of whether it was paid out or not thereafter) was in itself adequate.

33.  The Court notes that domestic law provides that the award of compensation be made on the basis of the value of the land at the time of the Notice to Treat (in this case 1964) despite the fact that the compensation may be finally determined and paid decades later (in this case 1981) ‑ to which must be added interest at 5%. The Court notes that this in itself raises an issue of proportionality according to the Court’s case law. Indeed, in similar Maltese cases, the Court has consistently found that the awards of the LAB which did not take into account the delay in the payment of compensation were inadequate (see, for example, Frendo Randon and Others v. Malta, no. 2226/10, §§ 70-71, 22 November 2011 and Schembri and Others v. Malta, no. 42583/06, § 45, 10 November 2009).

34.  Other than these restrictions imposed by law, the applicants argue that the land had been considered as agricultural land while in reality it was used for development. The Court considers that, even assuming that it was not ‑ at the time of the taking ‑ classified as undevelopable land or as being outside a development zone (ODZ land), it cannot be said that it was indisputably developable land. The fact that, when the applicants (or their ancestors) entered into the contract of emphyteusis, no specific type of development had yet been determined for the land did not entail any assurance as to its development (see, mutatis mutandis, Trimeg Limited v. Malta, (dec.), no. 64792/10, 27 September 2011). Nor can the terms of the agreement between the parties determine the nature of the land irrespective of any other legal considerations. In this connection the Court notes that the ground rent prices referred to by the applicants concern the entirety of the property which had been taken under title of emphyteusis, while the expropriated part amounts to around one fourth of that property. Further, the parties have not indicated what were the objective criteria arising from the law, applicable at the relevant time, to determine whether land was agricultural or otherwise. In such circumstances it is not for the Court to make that assessment and for the purposes of the present case it suffices to note that the Constitutional Court considered such land to be agricultural (see paragraph 20 above).

35.  As to the award itself, even taking the 1964 value and assuming it was agricultural land, the Court is struck by the low amount of compensation. Indeed the award made is even smaller than what the Government’s architect estimated the land to be worth (as agricultural land). Thus, even assuming that the applicants’ architect’s valuation was, as seems to have been understood by the domestic courts, to refer to developable land, the award made to the applicants remains questionable. Moreover, it cannot go unnoticed that the LAB in their rectification judgment, gave the same amount of compensation established previously despite acknowledging that they had previously relied on a wrong (smaller by around 10%) measurement. This situation was not remedied by the constitutional jurisdictions. Thus, the award also appears to have been made without proper consideration of the actual size of the property. It follows that the compensation determined more than two decades after the taking had not been adequate.

36.  Bearing in mind the above, the Court considers that there has been a violation of Article 1 of Protocol No. 1.

II.  APPLICATION OF ARTICLE 41 OF THE CONVENTION

37.  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.”

A.  Damage

38.  The applicants claimed 3,720,000 euros (EUR) plus interest dating back from 1961 in respect of pecuniary damage reflecting their share of the property which was in 2017 valued at EUR 11,160,000. In their view given the delay in compensation they would continue to suffer a disproportionate burden if the Court were to award compensation according to its case-law in similar cases. They also claimed EUR 5,000 each in non-pecuniary damage.

39.  The Government considered that no pecuniary damage was due, nor interest as Convention proceedings were not akin to a domestic claim for damage. In any event they considered that, any award in pecuniary damage should not exceed EUR 1,000 consisting of the difference between the award of the LAB and the valuation of the Government’s architect. They also considered that pecuniary damage should not exceed EUR 2,000 jointly.

40.  The Court notes that in similar cases (see, for example, Frendo Randon and Others v. Malta, (just satisfaction), no. 2226/10, § 20, 9 July 2013 and Azzopardi v. Malta, no. 28177/12, § 66, 6 November 2014) the sum to be awarded to the applicants was calculated on the basis of the value of the land at the time of the taking, converted to the current value to offset the effects of inflation, plus simple statutory interest applied to the capital progressively adjusted. However, in the present case the Court does not lose sight of the fact that, although inadequate, compensation had been determined and was payable to the applicants in 1981 and that this Court has already found that the delay in the payment of compensation, from 1981 onwards was the fault of the empyhteutae, including the applicants or their ancestors (Bezzina Wettinger and Others, cited above, §§ 106-114). The Court will also take account of the public interest behind the measure, and the limited share of the applicants in the present case. It will, however, refrain from awarding interest, which will be paid domestically upon the finalisation of the deed of expropriation.

41.  Having regard to the above the Court considers it reasonable to award the applicants EUR 4,500, jointly, plus any tax that may be chargeable on that amount, in pecuniary damage for the expropriation of their share of the property.

42.  It further awards EUR 10,000, jointly, in non-pecuniary damage.

B.  Costs and expenses

43.  The applicants also claimed a total of EUR 7,896 for the costs and expenses incurred before the domestic courts (EUR 3,265.87 as per taxed bill of costs) and for those incurred before the Court.

44.  The Government did not contest the sums the applicants had to pay domestically, though they noted that no receipt had been submitted as to the part costs they had been made to pay to Government. They also considered that costs for proceedings before this Court should not exceed EUR 2,000.

45.  According to the Court’s case-law, an applicant is entitled to the reimbursement of costs and expenses only in so far as it has been shown that these have been actually and necessarily incurred and are reasonable as to quantum. In the present case, regard being had to the documents in its possession and the above criteria, as well as the fact that, even assuming they have not been paid, outstanding domestic court expenses remain payable, the Court considers it reasonable to award the sum of EUR 7,896 claimed by the applicants, in its entirety, covering costs under all heads.

C.  Default interest

46.  The Court considers it appropriate that the default interest rate 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,

1.  Declares the application admissible;

 

2.  Holds that there has been a violation of Article 1 of Protocol No. 1;

 

3.  Holds

(a)  that the respondent State is to pay the applicants, jointly, within three months the following amounts:

(i)  EUR 5,000 (five thousand euros), plus any tax that may be chargeable, in respect of pecuniary damage;

(ii)  EUR 10,000 (ten thousand euros), plus any tax that may be chargeable, in respect of non-pecuniary damage;

(iii)  EUR 7,896 (seven thousand, eight hundred and ninety‑six euros), plus any tax that may be chargeable to the applicants, 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;

 

4.  Dismisses the remainder of the applicants’ claim for just satisfaction.

Done in English, and notified in writing on 21 January 2020, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

  Stephen Phillips                                                              Georgios A. Serghides
       Registrar                                                                              President

 

APPENDIX

No.	Applicant’s Name	Birth date	Nationality	Place of residence
1	Stephanie BEZZINA WETTINGER	15/01/1972	Maltese	St Julians
2	Martin BEZZINA WETTINGER	15/11/1966	Maltese	Msida
3	Johanna PARNIS ENGLAND	28/07/1965	Maltese	Tal-Ibraġġ
4	Nicholas PARNIS ENGLAND	18/01/1969	Maltese	San Pawl Tat-Tarġa
5	Robin PARNIS ENGLAND	12/06/1972	Maltese	Madliena
6	Stephen PARNIS ENGLAND	09/02/1963	Maltese	St Julians