FIRST SECTION
CASE OF APAP BOLOGNA v. MALTA
(Application no. 47505/19)
 
 
 
 
JUDGMENT
 
STRASBOURG
9 December 2021
 
This judgment is final but it may be subject to editorial revision. In the case of Apap Bologna v. Malta,
The European Court of Human Rights (First Section), sitting as a Committee composed of:
 Krzysztof Wojtyczek, President,
 Erik Wennerström,
 Lorraine Schembri Orland, judges,
and Attila Teplán, Acting Deputy Section Registrar,
Having regard to:
the application (no. 47505/19) 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 a Maltese national, Mr Louis Apap Bologna (“the applicant”), on 6 September 2019;
the decision to give notice to the Maltese Government (“the Government”) of the application;
the parties’ observations;
Having deliberated in private on 16 November 2021,
Delivers the following judgment, which was adopted on that date:
INTRODUCTION
1. The case concerns a unilaterally imposed commercial lease under Chapter 69 of the Laws of Malta, in respect of which an insufficient amount of rent (to be paid to the applicant) is provided for by law, as well as the effectiveness of remedies in that regard. THE FACTS
2. The applicant was born in 1944 and lives in Sliema. He was represented by Dr S. Grech and Dr I. Refalo, lawyers practising in Valletta. 3. The Government were represented by their Agents, Dr C. Soler, State Advocate, and Dr J. Vella, Advocate at the Office of the State Advocate. 4. The facts of the case, as submitted by the parties, may be summarised as follows. BACKGROUND
5. The applicant was originally the owner of one-half undivided share of the premises at nos. 295 and 296 in Republic Street, Valletta, used as a shop, which he inherited on 30 April 1980. The other half undivided share belonged to G & F. 6. The premises had been leased by the applicant’s predecessors in title by means of an agreement signed on 22 January 1922 in virtue of which the premises were leased for a period of four years at the rent of one hundred pounds sterling (GBP) per annum. At the time the owners leased the tenement, the duration and conditions thereof were regulated entirely according to the agreement reached between the parties. 7. Following Acts in 1925 and 1926 granting temporary protection to tenants, in 1933 Act XXI (today Chapter 69 of the Laws of Malta) introduced a perpetual protection for the tenant, with the lease being renewed indefinitely. The owners of the premises at issue were thus forced to continue leasing the commercial premises at the same rent applicable in 1922 and in their situation, they had no legal grounds to evict the tenant. 8. In 1964 the owners managed to negotiate a rent of GBP 150. 9. By a contract of 11 September 1980 G & F and the applicant partitioned the property, each keeping half of the shop with a separate entrance, thus the applicant became the full owner of the interconnected shop at no. 296. 10. At around the same time, following two successions and two contracts whereby part of the tenancy rights was transferred, the tenancy of the shop nos. 295/296 came into the hands of another three tenants K. I. and V. The latter were not recognised by the landlords. Moreover, it appeared that they had also entered into agreements with third parties affecting the running of the shop. Eviction on these grounds was also unsuccessful. RENTAL PAYMENTS
11. The landlords continued to refuse rent which as of 18 April 2001 began to be deposited in court. The first deposit was made on the 18 of April 2001 and was for the amount of 2,828.84 Maltese liri (MTL) which covered the rent from 22 January 1982 until 22 January 2001. Subsequent deposits were made for MTL l50 (approximately 395 euros (EUR)) per annum, to cover the period until the end of December 2009. 12. When Act X of 2009 was enacted the rent was increased by law at the rate of 15% per annum for the period between 1 January 2010 and 1 December 2013. Thus, for the years 2010-2013 the annual rent of the entire shop (nos. 295/296) was EUR 401.82, EUR 462.09, EUR 531.41 and EUR 611.11 respectively. For the period commencing 1 January 2014, the rent according to law was to increase according to the Index of Commercial Value of Property (ICVP) which had to be enacted by the competent Minister, or (in default) the rent was to increase by 5% per annum. Since the ICVP was never published the rent increased by 5% every year as follows: EUR 641.67, EUR 673.75, EUR 707.44, EUR 742.81, EUR 779.95 and EUR 818.95 for the years 2014-2019 respectively. CONSTITUTIONAL REDRESS PROCEEDINGS
13. On 22 February 2017 the applicant filed constitutional redress proceedings claiming a breach of his rights under Article l of Protocol No. 1 to the Convention insofar as his interest in the property at no. 296 was concerned. He argued that he was suffering a disproportionate burden given the low amount of rent being received for the commercial premises at issue when compared to the real rental value of the property. 14. During these proceedings the court-appointed architect valued the sale value of the property (in its entirety i.e. nos. 295 and 296) in 2017 at EUR 1,500,000 and its rent as being EUR 86,540 annually, having considered its prime location, the nature and good conditions of the premises, as well as the fact that it was a going concern (i.e. an operating business making a profit). In that same year the rent due to the landlords according to the law was approximately EUR 743 annually. According to the same court‑appointed architect, having estimated the annual market rents for every year since 1986, the total amount of rent at market prices over the entire period would amount to EUR 1,603,499. 15. By a judgment of 4 June 2018 the Civil Court (First Hall), in its constitutional competence, found, in line with ECtHR’s case law, that the applicant had suffered a violation of his property rights under Article 1 of Protocol No. l to the Convention (but not under the Constitution) given the disproportionate burden he had to carry due to the low amount of rent he was receiving. It awarded him EUR 100,000 by way of compensation for pecuniary and non-pecuniary damage. It apportioned the costs of the lawsuit as to half for the applicant and half for the Attorney General. 16. In determining compensation it considered, in particular, the fact that premises consisted of a shop in a Republic Street Valletta; the rent paid; the rent increases over the years; the current market value; the disproportion between the rent payable and the market rental value; the fact that the lease will end in 2028 according to law; the years during which the applicant suffered an interference but also the interval of time which passed before the applicant instituted constitutional redress proceedings. 17. The parties appealed; the applicant appealed in so far as he considered that the redress was insufficient and was further reduced by the order to pay part costs. He also requested that the premises be returned to him. 18. By a judgment of 29 March 2019 the Constitutional Court confirmed the finding of a violation but reduced the compensation to EUR 55,000 (EUR 50,000 in pecuniary damage and EUR 5,000 in non‑pecuniary damage). It refused to order the eviction of the tenants – considering it was not the court with the appropriate jurisdiction to do so – but declared that the provisions of Chapter 69 of the Laws of Malta were to be without effect as regards the relations between the applicant and the tenants, and therefore the latter could no longer rely on those provisions to justify their occupation of the premises. As regards costs, it decided that those at first-instance were to remain as apportioned by that court whereas the costs of the applicant and the Attorney General’s appeals were to be divided as to half for the Attorney General and half for the applicant whereas the tenants had to bear their costs of their cross-appeal. 19. In relation to the compensation the Constitutional Court, reiterating that its award could not reflect civil damage which could be awarded by an ordinary civil court, remarked that the value established by the court‑appointed architect reflected the rental value for the entire shop whereas the applicant’s interest was limited only to the divided part of the shop (no. 29). As to the costs awarded at first instance it noted that since the applicant’s constitutional complaints had not been upheld, as opposed to the conventional ones, it was appropriate that he pay the costs for his unsuccessful claim. SUBSEQUENT EVENTS
20. Following the Constitutional Court judgment and the lodging of the application with the Court the applicant approached the tenant in order to secure new terms for the lease, as an alternative to lodging eviction proceedings. As a result, a new agreement was signed at a rent of EUR 140 daily, in other words EUR 51,100 per year, which was even more than that which had been estimated by the court-appointed expert. This agreement took effect as of 1 October 2019, and the tenant paid a lump sum to make up fair rent from the date of the Constitutional Court judgment to the start of the agreement. The applicant was satisfied that he was obtaining fair rent following the Constitutional Court judgment. 21. For completeness sake he also informed the Court that subsequently he reached a new agreement with the tenant at EUR 50 daily, in the light of the difficult situation resulting from the outbreak of the Coronavirus pandemic. RELEVANT LEGAL FRAMEWORK
22. The relevant provision of the Reletting of Urban Property (Regulation) Ordinance, Chapter 69 of the Laws of Malta, enacted in June 1931 and subsequently amended, and those of the Civil Code, Chapter 16 of the Laws of Malta, as amended in 2009, are set out in Zammit and Attard Cassar v. Malta (no. 1046/12, §§ 26-27, 30 July 2015). THE LAW
ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION
23. The applicant complained that the compensation awarded by the Constitutional Court covered the equivalent of one year’s market rental value while the property had been under controlled leases as of the 1920s. He thus considered that he continues to be a victim of a breach of Article 1 of Protocol No. 1 to the Convention 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.”
Admissibility
24. The Government submitted that the applicant had lost his victim status as the domestic court had given sufficient compensation, as well as a declaration that the tenant could no longer rely on the relevant law to maintain title to the property. This had opened the way for the applicant to institute fresh proceedings before the RRB to evict the tenant, however he had failed to do so. The applicant could not therefore retain victim status on the basis of his inaction. 25. The applicant originally claimed that he had victim status both because the Constitutional Court had not awarded sufficient compensation and because it had failed to evict the tenant. However, in his submissions after communication, following the arrangement reached with the tenant pursuant to the Constitutional Court judgment (as a result of which he did not seek eviction) the applicant submitted that he continued to be a victim of the violation only for the period until the Constitutional Court judgment given that he had not been adequately redressed for the breach suffered until then. 26. The Court reiterates its general principles concerning victim status as set out in Apap Bologna v. Malta (no. 46931/12, §§ 41 and 43, 30 August 2016). 27. In the present case, the Court notes that there has been an acknowledgment of a violation by the domestic courts. As to whether appropriate and sufficient redress was granted, the Court considers that even though the market value is not applicable and the rent valuations may be decreased due to the legitimate aim at issue, as well as because they were based on the property being a going concern, a global award of EUR 55,000 covering pecuniary and non-pecuniary damage for a breach which has persisted for decades in relation to a property with an estimated rental value of, for example, more than EUR 40,000 in 2017 (EUR 86,540 reflecting the rental value of the entire property, see paragraph 14 above), is insufficient. 28. That is enough to find that the redress provided by the domestic court in the present case did not offer sufficient relief to the applicant, who thus retains victim status for the purposes of this complaint (see, mutatis mutandis, Portanier v. Malta, no. 55747/16, § 24, 27 August 2019). 29. The Court notes that the complaint is neither manifestly ill-founded nor inadmissible on any other grounds listed in Article 35 of the Convention. It must therefore be declared admissible.

Article of the Convention at issue: Article 13
Outcome: violation