SECOND SECTION
CASE OF RIZZO AND OTHERS v. MALTA
(Application no. 36318/21)
 
JUDGMENT
Art 13 (+ Art 1 P1) • Effective remedy • Appeal to Constitutional Court as of 2021 an accessible remedy, capable of providing redress and offering reasonable prospect of success in relation to claims under the old rent laws • Consistent application by Constitutional Court of specific guidelines for award of adequate compensation indicated in Cauchi v. Malta • Amendments to relevant domestic law subsequent to Cauchi • New potentially effective procedure capable of evicting tenants or putting in place a higher future rent
Art 1 P1 • Peaceful enjoyment of possessions • Disproportionate burden on applicants due to inadequate rent imposed by law • Insufficient domestic redress at first instance • Art 35 § 1 • Exhaustion of domestic remedies • Given present case timeline, applicants not expected to lodge a Constitutional Court appeal prior to expiry of appeal time-limit as remedy ineffective at the time due to judicial practice
 
Prepared by the Registry. Does not bind the Court. STRASBOURG
16 January 2024
 
FINAL
 
16/04/2024
 
This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision. In the case of Rizzo and Others v. Malta,
The European Court of Human Rights (Second Section), sitting as a Chamber composed of:
 Arnfinn Bårdsen, President,
 Egidijus Kūris,
 Pauliine Koskelo,
 Saadet Yüksel,
 Lorraine Schembri Orland,
 Frédéric Krenc,
 Diana Sârcu, judges,
and Hasan Bakırcı, Section Registrar,
Having regard to:
the application (no. 36318/21) 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 three Maltese nationals, relevant details listed in the appended table, (“the applicants”), on 15 July 2021;
the decision to give notice to the Maltese Government (“the Government”) of the complaints concerning Article 1 of Protocol No. 1 to the Convention alone and in conjunction with Article 13 of the Convention and to declare inadmissible the remainder of the application;
the parties’ observations;
Having deliberated in private on 5 December 2023,
Delivers the following judgment, which was adopted on that date:
INTRODUCTION
1. The case concerns the effectiveness of an appeal to the Constitutional Court for the purposes of Article 13 following developments in domestic case-law in the ambit of judgments relating to old rent laws raising issues under Article 1 of Protocol No. 1 to the Convention. THE FACTS
2. The applicants were initially represented by Dr K. Micallef and later by Dr C. Ellul, 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 may be summarised as follows. Background to the case
5. The applicants hold the perpetual utile dominium of a property, No. 17, Triq Gort, Paceville, St. Julian’s, which they received by deed causa mortis, following the death of their aunt on 26 February 1994. 6. On 19 January 1972 the applicants’ predecessor in title rented, under title of temporary sub-emphyteusis, the property to a third party for twenty‑one years. 7. On 18 January 1993, on the expiry of the temporary sub-emphyteusis, the tenant, a Maltese citizen and using the property as his ordinary residence, relied on Act XXIII of 1979 amending Chapter 158 of the Laws of Malta, the Housing (Decontrol) Ordinance (hereinafter ‘the Ordinance’), to retain the property under title of lease at the annual rent according to law of approximately 303 euros (EUR) per year. In line with the law, in 2008 the annual rent was increased to approximately EUR 454; in 2013, to approximately EUR 502; and in 2016, to approximately EUR 519. Constitutional Redress Proceedings
8. In April 2019, the applicants instituted constitutional redress proceedings before the First Hall, Civil Court (in its constitutional competence) (hereinafter ‘FHCC’) claiming that the provisions of the Ordinance as amended by Act XXIII of 1979 which granted the tenant the right to retain possession of the premises under a lease, imposed on them, as owners, as of January 1993, a unilateral lease relationship for an indeterminate time without reflecting a fair and adequate rent, in breach of, inter alia, Article 1 of Protocol No. 1 to the Convention. Limiting their claims to 31 December 2018, they requested the court to award compensation for the damage suffered, but they did not demand the eviction of the tenant. 9. According to the court-appointed expert, bearing in mind the development potential of the premises (namely, a further three floors and a penthouse, with two apartments on each level), its sale value in 2019 would be of EUR 850,000, while its actual value as it stood (excluding development potential) was EUR 320,000. Thus, the annual market rental value in 1993 was EUR 1,980 annually, in 1998 EUR 3,120, in 2003 EUR 4,080, in 2008 EUR 6,360, in 2013 EUR 6,240 and that in 2018 EUR 10,560. 10. By a judgment of 25 January 2021, the FHCC found a violation of the applicants’ property rights, them having suffered a disproportionate burden as a result of the laws in place and awarded them EUR 30,000 in pecuniary and non-pecuniary damage, for the violation suffered until 10 April 2018 (as requested by the applicants (sic.)), date when the new Article 12B of the Ordinance provided a further remedy. The applicants were not made to bear any of the costs related to the proceedings, despite the fact that not all of their demands were acceded to by the court. None of the parties appealed. Parallel proceedings
11. Act XXVII of 2018 was published on 10 July 2018 and came into force on 1 August 2018. This Act amended the Ordinance and introduced Article 12B thereof (see Relevant Domestic Law below). 12. In April 2019, the applicants instituted ordinary proceedings before the Rent Regulation Board (hereinafter ‘RRB’) demanding the RRB (1) to recognise the occupants as the tenants of the property; (2) to order the tenants to undergo the means test according to law; (3) to declare that the rent should be increased to an amount not exceeding 2% of the open market value of the property on 1 January 2019 or to order the eviction of the tenant within five years if the tenant does not satisfy the means test criteria. 13. By a judgment of 2 December 2020, the RRB, having found that the tenants satisfied the means test, increased the annual rent payable to EUR 5,000 for the first two years and to EUR 7,500 for the subsequent four years. The tenants appealed and the applicants filed a cross-appeal. By judgment of 17 December 2021 the decision of the RRB was confirmed by the Court of Appeal. RELEVANT LEGAL FRAMEWORK
14. The relevant domestic law in connection with the rent laws at issue in the present case is set out in Amato Gauci v. Malta (no. 47045/06, §§ 19-22, 15 September 2009) and Cauchi v. Malta (no. 14013/19, § 22, 25 March 2021). 15. The relevant domestic law in connection with constitutional redress proceedings is set out in Apap Bologna v. Malta (no. 46931/12, §§ 28-29, 30 August 2016). THE LAW
ALLEGED VIOLATION OF ARTICLE 13 OF THE CONVENTION
16. The applicants complained that they did not have an effective remedy in respect of their property rights as provided in Article 13 of the Convention, read in conjunction with Article 1 of Protocol No.1 to the Convention, the former of which reads as follows:
“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
Admissibility
17. The Court notes that the applicants’ have an arguable claim for the purposes of Article 1 of Protocol No. 1 to the Convention as evidenced by copious case-law to that effect (see, inter alia, Amato Gauci v. Malta, no. 47045/06, §§ 19-22, 15 September 2009, and Cauchi v. Malta, no. 14013/19, § 22, 25 March 2021), as well as the domestic findings in their case at first instance (see paragraph 10 above) and the Court’s considerations in that respect (see paragraph 65 below). It follows that Article 13 is applicable. 18. 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. MeritsThe parties’ submissions

(a)   The applicants
19. The applicants submitted that at the time that an appeal had to be filed in their case, following the judgment at first instance in January 2021, recourse to the Constitutional Court did not constitute an effective or practical remedy. Although early signs of a change in trend started appearing in late 2020, this did not automatically mean that the concerns related to the ineffectiveness of the Constitutional Court, as confirmed by years of jurisprudence of the Court to this effect, were no longer justified. They considered that, while in more recent judgments delivered by the Constitutional Court in 2021-2022, the latter appeared to have started reversing the trend of rejecting appeals or at worse decreasing the compensation claimed, this was not the existing situation at the time their petition was made. The applicants noted that by the State Advocate’s own admission, in 2020, bar two judgments, all were decided in late 2020 (October and November 2020) and therefore by no means could it be alluded that such development had changed the situation to the extent that what otherwise (and for well over a decade) had been deemed to be an ineffective remedy, suddenly became an effective one. In the applicants’ view a decade long reputation could not be eradicated by a few sporadic judgments delivered some months before the applicants had to decide on which recourse they would seek. 20. Moreover, while the six cases dated 2020, relied on by the Government (see paragraph 24 below), indicated that the Constitutional Court had increased the compensation awarded by the first-instance court, in the applicants’ view, five of those awards had nevertheless not reflected adequate compensation, in line with the Court’s guiding principles established in Cauchi (cited above). The same held in respect of another case (namely, Catherine Tabone pro et noe v. L-Avukat Generali et, Rik. 27/18, 27 March 2020), which the Government mistakenly considered had reduced compensation. In support of this, the applicants’ submitted their own calculations, based on the latter guidelines, in respect of those cases. They noted that the guiding principles only started to be followed at the domestic level after the Court’s judgment in Cauchi in March 2021, but those judgments were after January 2021 (date relevant to the applicants) and thus could not be of any relevance to the present case. 21. Furthermore, apart from the issue of compensation, the applicants further referred to the Constitutional Court’s continued insistence not to apply an erga omnes effect to a declaration that the rent laws are unconstitutional, as well as its continued insistence not to order eviction even though the declaration of unconstitutionality would so merit. (b)   The Government
22. The Government submitted that constitutional redress proceedings, namely an application before the CCFH as first-instance constitutional jurisdiction and, in particular, an appeal before the Constitutional Court amounted to an effective remedy for the purposes of the applicants’ complaint under Article 1 of Protocol No. 1 to the Convention. They noted that, in law, the powers of the courts enjoying constitutional jurisdiction in the domestic legal system were wide and capable of offering any redress which the plaintiff may be entitled to. 23. In the present case, the applicants had demanded compensation for the violation that subsisted until 2018, and explicitly stated that they were not after the eviction of the tenants. As a result, the CCFH awarded EUR 30,000 which the Government considered adequate compensation. Nevertheless, had they been unhappy with that award, they could have appealed to the Constitutional Court which could have increased that compensation had it been merited. In particular, the Government relied on the Constitutional Court’s case-law in 2020 and 2021, which dispelled previous conclusions in that respect. 24. The Government submitted that between 1 January 2020 and 31 December 2020, the Constitutional Court decided eight appeals by plaintiffs demanding higher compensation in rent law cases and in six[1] of them the Constitutional Court had upheld the appeal and increased the compensation. In one other case[2] it had confirmed the compensation, and in the other[3] it had reduced compensation upholding the State’s appeal (sic.). The Constitutional Court also chastised the representative of Government for appealing when the compensation awarded by the FHCC had evidently been in line with jurisprudence. It also, at times, had found that the appeal was frivolous and vexatious and ordered the State to pay double court costs[4]. According to the Government, in the same time span there had been eleven other rent cases decided by the Constitutional Court on appeal by the Government. However, those eleven cases were irrelevant as no appeal had been filed by the plaintiffs and therefore the Constitutional Court could not have increased the compensation. Nevertheless, for completeness’ sake, of those cases, the Constitutional Court had upheld the State appeal in three cases[5], thus reducing the compensation which had been awarded to the applicants at first instance and rejected the State’s appeal in the remaining eight cases[6]. 25. According to the Government, given that the applicants’ case was decided at first instance on 25 January 2021, their appeal would have been decided sometime after and therefore the outcome of the cases in 2021 was also relevant. Limited to the Ordinance at issue in the present case, they referred to three judgments[7] whereby the Constitutional Court increased compensation upon an appeal (or cross-appeal) by the plaintiffs. In one case[8], where only the State had appealed, the Constitutional Court rejected the appeal and confirmed the compensation awarded at first instance. In four other cases[9] (three of which concerning only an appeal by the State) it reduced it, having considered that the amount awarded at first instance had been even higher than that which would have been awarded according to the guidance of the ECtHR in Cauchi (cited above), therefore applying the latter in setting the compensation. The Government further relied on Cuschieri and Others v. Malta ([Committee] dec., no. 36806/21, §§ 4 and 8, 20 September 2022), whereby the Court had held that the Constitutional Court’s award increasing compensation, had been adequate. 26. In relation to the applicants’ submissions concerning the adequacy of compensation in the cases delivered in 2020 (see paragraph 20 above), the Government noted that the applicants’ calculations had been based on the court-appointed expert reports without any consideration in that regard. However, the valuations provided by the expert reports had to be analysed and assessed, and not merely applied blindly by the national courts as though they constituted incontrovertible evidence of the rent which the owners would have received over the years. Undoubtedly, expert reports are a strong and vital piece of evidence in such proceedings, but they must be scrutinised like all other pieces of evidence. Moreover, according to the guidelines established in Cauchi (cited above, §§ 103-04), deductions had to be made of ‘around 30% on the grounds of that legitimate aim’ [referring to the social protection of tenants] and ‘at least 20%’ on the basis that had the property not been subject to the impugned regime it would not necessarily have been rented out throughout the entire period. Thus, the calculations could not be based on a strict deduction of 50 % on the values established by the experts. Moreover, in at least one of those six cases, the property had been one of a very high standing, and thus according to the Court’s case-law (see Galea v. Malta, no. 28712/19, 7 October 2021) the probability of it having been rented out all throughout was less than in the usual cases dealing with standard residential property, thus the percentage reduction could be increased. 27. As concerns preventing the continuation of the violation, the Government noted that, at the time when the applicants instituted constitutional redress proceedings, the new Article 12B of the Ordinance had already come into force. In fact, the applicants had specifically limited the effects of their case to the date of the introduction of Article 12B in 2018, reserving any future constitutional redress proceedings they could institute to challenge the new remedy. Therefore, the applicants had recognised, at least implicitly, that the new law provided an ordinary remedy that allowed them to either increase the rent being paid or to acquire the eviction of the tenant if the latter did not deserve the protection of the law. In fact, they instituted such ordinary proceedings and as a result acquired a significantly higher future rent (see paragraph 13 above).

Article of the Convention at issue: Article 1
Outcome: violation