5.  The details of the applicants are available in the Annex.
6.  The applicants are owners of a property situated at 8, Flat 1, Old Prison Street, Senglea, (hereinafter “the property”) which they inherited from their ancestors. The property had been conceded to third parties by a title of temporary emphyteusis for a period of seventeen years, at an established ground rent of 40 Maltese liras (MTL - approximately EUR 98) per year, which was to expire in 1990.
7.  On 1 September 1986 the Government issued a requisition order on the property. In October 1988 the Government derequisitioned the property and returned the keys to the applicants.
8.  On 15 April 1989 the Commissioner of Land took over (occupied) the property.
9.  In spring-summer 1989 the applicants became aware that the property had been demolished at some point between March and September 1989 in connection with a slum clearance project, in order to make way for the development of social housing.
10.  By means of a President’s declaration of 27 October 1989, that is after the property was demolished, the Commissioner of Land formally took over the property under title of possession and use (see relevant domestic law).
11.  By means of a President’s declaration of 4 October 1991 the Commissioner of Land issued an order to convert the title from one of possession and use into one of public tenure (see relevant domestic law).
12.  On 22 March 1999, the Commissioner of Land submitted a notice to treat to the Land Arbitration Board (LAB), by means of which the sum of MTL 15.62 (approximately EUR 36.39) per year was offered to the owners (the Zammit family) as a yearly recognition rent. The sum was based on an estimate of the Land Valuation Office in line with their policies, but did not take account other factors, and was significantly lower than the rent at which the property had been leased prior to its demolition.
13.  By means of a judicial letter of 12 April 1999 the owners refused the offer.
14.  On 22 May 2000 the Commissioner of Land instituted proceedings before the LAB requesting them to order the transfer of the property and set the relevant compensation.
15.  On 29 November 2006, the second and seventh applicants intervened in the proceedings as heirs of their deceased parent.
16.  During these proceedings, the technical experts, appointed before the LAB, considered that in 1986 the property had been valued at MTL 1,000 (approximately EUR 2,320). On 10 August 2005 the applicants’ ex‑parte architect estimated the fair rent of the property in 2005 at the equivalent of EUR 229.64 per year, and its sale value at MTL 7,500 (approximately EUR 17,470.30) – the property having been demolished, his estimate was based on the plans of the building from which it transpired that it had a depth of 14.5 metres and a width of 5.5 metres. In 2011 the technical experts of the LAB considered that the rental value for the property was EUR 158.40 per year, and its sale value (according to the terms of possession and use) was EUR 10,575.36.
17.  By a decision of 7 March 2012, acknowledging that the property had been demolished prior to the formal taking by the Government, the LAB considered that it was inconceivable that rent be paid for a property which had been demolished in order to be built anew, and that the right course of action would have been to acquire the property by outright purchase. Nevertheless, given that Article 19 of Chapter 88 of the Laws of Malta concerning expropriation by public tenure did not preclude such an action, the LAB fixed the recognition rent at EUR 158.40 per year.
18.  On 27 March 2012 the Commissioner of Land appealed against the amount of rent established. On 16 April 2012 the applicants filed a reply asking the court to declare the appeal null and void as appeals could only be lodged on points of law. It was also noted that constitutional redress proceedings were being lodged by the applicants concerning the illegalities in the procedure and the alleged unconstitutionality of the law. Following the constitutional redress proceedings (described below) the Commissioner of Land’s appeal was withdrawn.
19.  On 16 April 2012 the applicants filed constitutional redress proceedings. They claimed that the demolition of the property was illegal and amounted to a de facto expropriation contrary to the Constitution and the Convention and its Protocols; that Article 19 of Chapter 88 of the Laws of Malta and related articles were in breach of the Constitution and the Convention and its Protocols; they requested the court to annul the LAB’s decision and to award them damages as well as any other relevant remedy.
20.  The defendants filed their reply and produced a valuation by an architect appointed by the Commissioner of Land who estimated the sale value of the property at EUR 45,000. The report noted that the property had been demolished and was replaced by new residential apartments.
21.  By a judgment of 12 February 2014 the Civil Court (First Hall) in its constitutional competence delivered a partial judgment where it rejected the defendants’ plea that the applicants had not exhausted ordinary remedies, and found a violation of the applicants’ rights in so far as the recognition rent established for the taking under public tenure, which was not subject to any future increases, was too low and thus disproportionate. It rejected the remainder of the claims, and left the liquidation of damage to be established in the final judgment.
22.  In particular the court was of the view that ‑ despite the applicants’ claim that the property had been demolished prior to it having been taken under possession and use ‑ the period in which the property had allegedly been taken and demolished must have been the same as that when it had been taken under title of possession and use, and thus the latter taking could not be considered illegal. According to domestic law the State could also have taken the property under title of public tenure in exchange for a recognition rent, to eventually demolish it. The demolition was thus lawful pursuant to Article 19 of Chapter 88 of the Laws of Malta. As to the impugned law, this could not be found to be incompatible with the Constitution since it had been in force before 1962. As to its compatibility with the Convention, the court found that the taking had pursued a public interest namely a slum clearance project. However, the recognition rent established in line with LAB policies, which was not subject to any future increases, was too low and thus disproportionate. There had therefore been a breach of the applicants’ right of property.
23.  During the continuation of the proceedings the applicants submitted an ex‑parte architect valuation dated 2014 which established the sale value of the property at EUR 50,000 and its rental value at EUR 250 per year. The report noted that the property had been demolished, and that it had had the measurements identified above, which resulted in an area of 80 square metres for the apartment which was located in a block of two apartments. The defendants declared that they did not object to this valuation.
24.  By a judgment of 27 May 2015 the Civil Court (First Hall) in its constitutional competence awarded EUR 15,000 in non‑pecuniary damage, bearing in mind the value of the property, that no compensation had been paid since its demolition, that the applicants would never get their property back and the recognition rent would never increase. The court further held that pecuniary compensation would be decided by the LAB, when deciding on the Commissioner of Land’s appeal. Costs were to be shared equally between the parties.
25.  The defendants appealed and the applicants cross‑appealed. By a judgment of 18 February 2016 the Constitutional Court varied the first‑instance judgment by limiting the basis of the violation, and reducing the compensation to EUR 1,500.
26.  The Constitutional Court held that in view of the evidence, it could not agree with the first‑instance court that the demolition had taken place after a legitimate taking. Indeed there had been relevant witness testimony to the effect that the property had been demolished around three months prior to the first taking, the LAB had accepted that it was so, and the Government had not objected to such fact, nor had they shown when the demolition took place. It followed that the demolition had taken place prior to the taking under possession and use and at a time when the Government had no title over the property. However, even if this were not so, and that it had been demolished when it was under title of possession and use, the demolition would still have been unlawful, since according to law it was not possible to demolish a property under a title of possession and use the rights attached to which were limited. That illegality persisted until the Commissioner of Land acquired the property under title of public tenure; however, despite the passage of three years since the demolition the applicants did not challenge that measure. In any event that was no longer an issue, as the situation was sanctioned when the State took the property under title of public tenure (as provided for in Article 19 of Chapter 88 of the Laws of Malta). The measure thus became lawful, and pursued the general interest of slum clearance.
27.  Moreover, the applicants were entitled to recognition rent for the property and, more importantly, for the land at issue. Indeed the fact that the taking consisted of land (as the property above it had been demolished) made it feasible to apply the taking under public tenure procedure. The Constitutional Court further rejected the applicants’ claim that it would have been more appropriate to take the property by means of outright purchase, as they had not requested the LAB to order the Commissioner of Land to take such a course of action under the mentioned Article 19. The law granted the Commissioner of Land discretion as to which form of taking it would undertake and the Constitutional Court’s role was limited to verifying whether the form of taking which was actually used breached the rights of an individual.
28.  As to the proportionality of the measure, the Constitutional Court noted that the applicants had claimed recognition rent of EUR 229.64 yearly and were awarded by the LAB a rent of EUR 158.40 yearly which the applicants had not appealed. Thus, given the award, in the light of their claim, it could not be considered that there arose such a disproportionality leading to a violation of the applicants’ property rights. Nevertheless, a breach did arise as a result of a failure to pay compensation since 1989, given that the applicants’ refusal to accept the offer of MTL 15.62 (approximately EUR 36.39) had been entirely justified. The Constitutional Court noted that as the breach had occurred and continued to persist, there was no reason to await the outcome of the LAB proceedings.
29.  As to redress the Constitutional Court considered that the applicants were to be awarded non‑pecuniary damage for the violation suffered. It furthered considered that the taking had pursued two legitimate aims, firstly social housing, and secondly slum clearance. While the applicants claimed compensation of around EUR 50,000 the Constitutional Court noted that the sale value according to the applicant’s ex-parte architect in 2005 was EUR 17,470.30 and that in 2011, according to the technical experts of the board, it was EUR 10,575.36. Thus, given the small size of the property, the area in which it was in, the fact that it had been demolished at the expense of the Government and the fact that the recognition rent was adequate, the Constitutional Court considered that EUR 1,500 was an adequate amount of compensation to be shared by the applicants jointly. It further considered that it needed not examine the Convention compatibility of the relevant law in abstracto, it having already determined that its application in the present case constituted a breach. Costs of the first‑instance proceedings were to remain shared by the parties, as were those of the main appeal; and costs of the cross appeal were to be paid by the applicants.
30.  At the date of lodging the application with the Court, the applicants had not received any compensation, nor had they received any recognition rent since the date of the demolition of the property. The property has been rebuilt as apartments for social housing.
31.  Section 5 of the Land Acquisition (Public Purposes) Ordinance (“the Ordinance”), Chapter 88 of the Laws of Malta (now repealed), provided for three methods of acquisition by the Government of private property. It reads as follows:
“The competent authority may acquire any land required for any public purpose, either -
(a) by the absolute purchase thereof; or
(b) for the possession and use thereof for a stated time, or during such time as the exigencies of the public purpose shall require; or
(c) on public tenure:
Provided that after a competent authority has acquired any land for possession and use or on public tenure the conversion into public tenure or into absolute ownership of the terms upon which such land is held shall always be deemed to be an acquisition of land required for a public purpose and to be in the public interest:
Provided also that, subject to the provisions of articles 14, 15 and 16, a competent authority may acquire land partly by one and partly by another or others of the methods in paragraphs (a), (b) and (c):
Provided further that where the land is to be acquired on behalf and for the use of a third party for a purpose connected with or ancillary to the public interest or utility, the acquisition shall, in every case, be by the absolute purchase of the land.”
32.  Section 13 regarding compensation read, in so far as relevant, as follows:
“(1) The amount of compensation to be paid for any land required by a competent authority may be determined at any time by agreement between the competent authority and the owner, saving the provisions contained in subarticle (2).
(2) The compensation shall in the case of acquisition of land for temporary possession and use be an acquisition rent and in the case of acquisition of land on public tenure be a recognition rent determined in either case in accordance with the relevant provisions contained in article 27.”
33.  The Ordinance provided that compensation in respect of absolute purchase was to be calculated in accordance with the applicable “fair rent”, as agreed by the parties following the Government’s offer or as established by the LAB. In respect of public tenure, Section 27(13) of the Ordinance provided as follows:
“The compensation in respect of the acquisition of any land on public tenure shall be equal to the acquisition rent assessable in respect thereof in accordance with the provisions contained in subarticles (2) to (12), inclusive, of this article, increased (a) by forty per centum (40%) in the case of an old urban tenement and (b) by twenty per centum (20%) in the case of agricultural land.”
34.  In so far as relevant, Section 19(1) and (5) read as follows:
“(1) When land has been acquired by a competent authority for use and possession during such time as the exigencies of the public purpose shall require, the owner may, after the lapse of ten years from the date when possession was taken by the competent authority, apply to the Board for an order that the land be purchased or acquired on public tenure or vacated within a period of one year from the date of the order, and the land shall either be vacated or acquired on public tenure or purchased upon compensation to be determined in accordance with the provisions of this Ordinance or of any Ordinance amending or substituted for this Ordinance.
(5) Public tenure shall of its nature endure in perpetuity, without prejudice to any consolidation by mutual consent or otherwise according to law of that tenure with the residual ownership of the land; and the recognition rent payable in respect thereof shall in every case be unalterable, without prejudice to the effects of any consolidation, total or partial. The residual ownership of land held on public tenure with the inherent right to receive recognition rent, shall, for all purposes of law, be deemed to be an immovable right by reason of the object to which it refers and shall be transferable according to law at the option of the owner, from time to time, of that right.”
35.  Thus, while a taking under title of “possession and use” was intended for a determinate period of time, a taking under title of “public tenure” was for an indeterminate period of time, possibly forever, and the relevant recognition rent was to remain unaltered for its duration.