Court of Appeal

Chief Justice Vincent Degaetano

Judges

Joseph D. Camilleri

Joseph A. Filletti

9 February 2007

Constitutional Court

This was an appeal from a judgement delivered by the First Hall, Civil Court in its Constitutional Jurisdiction on 15 February, 2001. The plaintiffs alleged a breach of Article 14 and Article 1 of the First Protocol of the European Convention On Human Rights (ECHR) due to the fact that as ex-servicemen in the British Military, they were entitled to a British service pension. However, due to this pension, they were not being given a Maltese pension equal to other persons who did not benefit from such service pension.

The plaintiffs sought a remedy claiming that Article 56 of the Social Security Act (Chapter 318 – Laws of Malta) breached their fundamental rights as per the above quoted articles.

The service pension varies according to the term of service and the rank held by the individual and was always and is still to this day distributed by the British government.

The plaintiffs claimed to have always paid their social security contributions like any other employees and this gave them a right to a Maltese pension once they became pensioners.

This also applied to those individuals who carry out a service outside Malta and during such service pay contributions to the British government in agreement with the Maltese government.

When the plaintiffs became eligible to a pension at the age of 61 years, the pension which they received was reduced to the extent of the British service pension.

Article 14 condemns any discrimination in the enjoyment of any right or freedom set forth in the convention.

The plaintiffs also claimed a breach of the First Protocol (Article 1), which in essence stipulates that every person is entitled to the peaceful enjoyment of his possessions and nobody shall be deprived of his possessions except in the public interest and to conditions provided by law and general principles of public international law.

They stated that there was “a clear inequality of treatment in the enjoyment of the right in question” (“Chassagnau and others vs France-1999”).

The plaintiffs claimed that the distinction between them as ex-servicemen and other individuals was neither legitimate nor reasonable and that they were being deprived of the enjoyment of something that they had a right to since they always made their contributions.

The only reason why their Maltese pension was reduced was because they received a pension from the British government, a pension that they had worked hard for.

Article 56 of the Social Security Act states: “Where a person is entitled to a Service Pension, other than a Service Pension which has been commuted, at any time, in whole, any pension arrived at in accordance with the provisions of articles 53 to 55 of this Part shall be abated by the amount of such Service Pension.”

The plaintiffs claimed this is in breach of their fundamental rights together with Articles 53 and 55 and the 12th Schedule of the same Act.

The amount that was being reduced from their Maltese pension was the amount of the British pension that they received at the very beginning and not as it began to accrue along the years. (This is a benefit only given to those who receive pensions from the British government.)

In “Lithgow and others vs UK” (1986), the European court stated that Article 14 safeguards persons (including legal persons) who are “placed in analogous situations” against discriminatory differences of treatment; and, for the purposes of Article 14 a difference of treatment is discriminatory if it “has no objective and reasonable justification,” that is, if it does not pursue a “legitimate aim” or if there is not a “reasonable relationship of proportionality between the means employed and the aim sought to be realised.”

The court felt that as in order to examine people “placed in analogous situations”, it was essential to compare not the plaintiffs and individuals who did not receive a service pension, but the plaintiffs and other individuals who received a service pension.

It added that it was just that persons not enjoying a service pension do not suffer any deductions.

A comparison with others entitled to a service pension showed that if there was a distinction between them, it was in favour of the plaintiffs since others receiving a service pension not from the British government had to bear a deduction in their Maltese pension to the extent of the amount of the service pension payable on the date of deduction. The plaintiffs enjoyed the benefit of reduction of the Maltese pension up to the amount due to them as a service pension at the very beginning of entitlement. The court commented that it was the quantum of the pension that was being disputed and not the actual right to such pension. Hence there was no breach of the First Protocol.

Case law has shown that the making of contributions to a pension fund may, in certain circumstances, create a property right and such a right may be affected by the manner in which the fund is distributed. The rights stemming from payment of contributions to social insurance systems are pecuniary rights for the purposes of Article 1 of the First Protocol.

However, even assuming that Article 1 guarantees benefits to persons who have contributed to a social insurance system, it cannot be interpreted as entitling that person to a pension of a particular amount (“Müller vs Austria” – 1975) In “Stanislaw Domalewski vs Poland” (1999) it was stated that an important consideration in the assessment under this provision is whether the applicant’s right to derive benefits from the social insurance scheme in question has been infringed in a manner resulting in the impairment of the essence of his pension.

Hence, the right being protected in this Article is the actual right to the property in question and not the quantum.

This however, did not mean that the quantum could be reduced extensively without giving the pensioners a remedy. In this case, the pension was reduced only to the extent of the other pension so that it would be equal or did not exceed considerably the pension of other individuals.

The First Hall rejected the plaintiffs’ pleas regarding violations of their rights under the ECHR.

On appeal, the Constitutional Court agreed that paying contributions gave rise to a right to a pension, a property right under Article 1 of the First Protocol.

However, so long as the reductions in the pension did not amount to a total negation of such right, a breach of such Article could not be contemplated. According to Karen Reid, author of A Practitioner’s Guide to the European Convention on Human Rights (2004), “A wide margin applies however to states in regulating their social policy. This can include measures reducing pensions in pursuit of social justice or reintegration into the general system of previously privileged groups.”

The Constitutional Court stated that there was no breach of the ECHR and the reduction in pensions was neither disproportionate nor illegitimate. Hence this court rejected the appeal and confirmed the judgement.