The Malta Independent 3 June 2020, Wednesday

ECHR orders government to pay €500,000 to family over Valletta properties

Albert Galea Friday, 14 February 2020, 08:20 Last update: about 5 months ago

The European Court of Human Rights (ECHR) has ordered the Maltese government to pay €500,000 to the owners of a property in Valletta which had been transferred from Scicluna's Bank to Bank of Valletta, a wholly state-held bank at that time.

The owners of the property sought redress from the ECHR, arguing that a judgement handed down by Malta's Constitutional Court in the case had failed to give them appropriate redress, leaving them victims of a number of articles within the Convention for the Protection of Human Rights and Fundamental Freedoms.

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The case centres on two sets of Valletta properties; 1 to 5 in St George's Square and nos. 132 to 135 in Strait Street. On 30 July 1958 the applicants' ancestor (the late Marquis John Scicluna) leased the premises no. 1 to 5 in St George's Square, Valletta, to Scicluna's Bank for ten years starting on 1 January 1959. In March 1968, the premises no. 132 to 135 in Strait Street, adjacent to the other premises, were incorporated into the lease contract for use by Scicluna's Bank. Thereinafter the lease was renewed every year.

On an unspecified date, Scicluna's Bank was merged with the National Bank of Malta Ltd, and the contract of lease was renewed. The conditions imposed in the lease contracts of 1958 and 1968 et sequi stipulated that the property would be used as the seat of Scicluna's Bank and that it could not be sublet or used for other purposes.  The Bank of Valletta was then established and the property was transferred in the name of the Bank by operation of law. The Bank was wholly owned by the Government, the judgement reads.

The applicants objected to the transfer, considering it a breach of contract. Following numerous requests for the return of the property and futile attempts to agree over a new lease contract with appropriate conditions, in 1989 the applicants instituted ordinary proceedings before the civil courts, in their ordinary jurisdiction, to regain possession of the property.  21 years later the case was determined by a final judgment of the Court of Appeal of 25 June 2010, whereby the court found that the lease in favour of the Bank was protected under Chapter 69 of the Laws of Malta (until 2028) and therefore that the ordinary courts were not the competent forum to address the applicants' complaints.

In 2010 the applicants instituted redress proceedings in the Constitutional Court finding a breach of Article 1 of the Human Rights Convention - which relates to deprivation of possessions and the right to enjoy such possessions peacefully - and of Article 6 of the same Convention - which relates to the having a reasonable time for proceedings.

The Constitutional Court found a violation of both points, and awarded the applicants €1 million in compensation, but this was later reduced to €25,000 after the government appealed the judgement.  The Constitutional Court also failed to evict the tenant from the property in question.

Faced with the case, the ECHR found that in the absence of an award covering future rent until 2028, the only remedy capable of giving adequate and speedy redress to the applicants in the present case was for the Constitutional Court to order eviction of the tenants, a course of action it had failed to undertake, as was its normal practice.

"Instead it had ordered that the tenants could no longer rely on the relevant law provisions to retain title to the property. While the Court will refrain from adjudicating on the matter in general, the effectiveness of such a measure appears unsatisfactory in the present case", the Court said.

The inaction of both parties in terms of the eviction of the tenants has led to the status quo remaining in existence for a further three years since the Constitutional Court judgement was handed down, the Court pointed out.

"Be that as it may, there was little justification for delaying redress in the present case, given that : (i) unlike in similar cases where the interferences had been justified by the legitimate aim of providing social housing, in the present case the interference applied in favour of a commercial entity, namely a bank; (ii) as the law stood, the bank would in any event lose the protection of the law and therefore would have to vacate the property when the lease came to an end in 2028", the Court concluded.

The Court also lamented that the financial compensation offered to the applicants was not adequate, noting that this is a common failure of the Maltese courts.

"Furthermore, the financial redress offered to the present applicants was not adequate. The Court is concerned that the Maltese courts often fail: (i) as to pecuniary damage, to bear in mind that awards must be intended to put the applicant, as far as possible, in the position he would have enjoyed had the breach not occurred; (ii) to accompany such awards by an adequate award in respect of non-pecuniary damage and/or an order for the payment of the relevant costs", the Court wrote.

The Court also unanimously found a violation in account of the excessive length of proceedings, and that the applicants were made to bear a disproportionate burden.

As a result, the Court ordered a compensation of €500,000 in respect of pecuniary damage, while it dismissed a claim for non-pecuniary damage.

The ECHR Chamber was made up of Paul Lemmens as President, and Georgios A. Serghides, Alena Poláčková, María Elósegui, Gilberto Felici, Erik Wennerström, and Lorraine Schembri Orland as Judges. 


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