Expropriation with payment of disproportionate compensation of 2.5% of the commercial value of the property! Violation of property right
JUDGMENT
Carmelina Micallef and Malta 28.10.2021 (app. no. 23264/18)
SUMMARY
Property right and expropriation for public benefit. Proportionality principle in compensation.
The applicant was deprived of her property due to expropriation. An amount of compensation of 1,398 euros was awarded despite the fact that the commercial value of the property, as estimated by an expert, amounted to 60,000 euros. He brought an action for violation of Article 1 of the First Additional Protocol.
The ECtHR reiterated that deprivation of property could be justified only if it proved, inter alia, that it was “in the public interest” and “subject to the conditions laid down by law”. It must also meet the requirement of the principle of proportionality. The required balance is not achieved when the person concerned bears individual and excessive weight.
Strasbourg found that the compensation awarded to the applicant amounted to less than 2.5% of the commercial value of the property and was therefore manifestly disproportionate. It unanimously held that Malta had failed to strike the required fair balance between the general interests of the Community and the protection of the applicant ‘s property rights, thus infringing Article 1 of the First Additional Protocol.
The ECtHR awarded EUR 57,000 in damages, EUR 8,000 in respect of non-pecuniary damage and costs.
PROVISION
Article 1 of the First Additioanl Protocol
PRINCIPAL FACTS
The applicant, Carmelina Micallef, is a Maltese national who was born in 1962 and lives in Birkirkara
(Malta).
The case concerns the taking of a piece of property under successive titles, its eventual expropriation
and, in particular, the adequacy of the compensation due on the basis of the Maltese Land
Acquisition (Public Purpose) Ordinance. The applicant, who inherited property from her mother in
2009, was awarded 1,398 euros (EUR) in compensation for the acquisition of the property by the
Government in 2010, despite its estimated value of around EUR 65,000.
Relying on Article 1 of Protocol No. 1 (protection of property) to the Convention, the applicant
complains that the compensation for the taking of her property was inadequate.
THE DECISION OF THE COURT…
General principles
As the Court has stated on a number of occasions, Article 1 of Protocol No. 1 comprises three distinct rules: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, inter alia, to control the use of property in accordance with the general interest. The three rules are not, however, distinct in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule (see, among other authorities, James and Others v. the United Kingdom, 21 February 1986, § 37, Series A no. 98; Beyeler v. Italy [GC], no. 33202/96, § 98, ECHR 2000‑I; Broniowski v. Poland [GC], no. 31443/96, § 134, ECHR 2004‑V and Saliba v. Malta, no. 4251/02, § 31, 8 November 2005).
The Court reiterates that a taking of property can be justified only if it is shown, inter alia, to be “in the public interest” and “subject to the conditions provided for by law”. Any interference with property must also satisfy the requirement of proportionality. As the Court has repeatedly stated, a fair balance must be struck between the demands of the general interest of the community and the requirement of protecting the individual’s fundamental rights, the search for such fair balance being inherent in the whole of the Convention. The requisite balance will not be struck where the person concerned bears an individual and excessive burden (see Sporrong and Lönnroth v. Sweden, 23 September 1982, §§ 69-74, Series A no. 52, and Brumărescu v. Romania [GC], no. 28342/95, § 78, ECHR 1999‑VII).
Compensation terms under the relevant legislation are material to the assessment of whether or not the contested measure respects the requisite fair balance and, in particular, whether it imposes a disproportionate burden on the individuals (see Jahn and Others v. Germany [GC], nos. 46720/99, 72203/01 and 72552/01, § 94, ECHR 2005‑VI). In this connection, the taking of property without payment of an amount proportionate to its value will normally constitute a disproportionate interference, whilst a total lack of compensation can be considered justifiable under Article 1 of Protocol No. 1 only in exceptional circumstances (see Former King of Greece and Others v. Greece [GC], no. 25701/94, § 89, ECHR 2000‑XII, and The Holy Monasteries v. Greece, 9 December 1994, § 71, Series A no. 301-A). However, Article 1 of Protocol No. 1 does not guarantee a right to full compensation in all circumstances. Legitimate objectives in the “public interest”, such as those pursued in measures of economic reform or measures designed to achieve greater social justice, may warrant reimbursement of less than the full market value (see Urbárska Obec Trenčianske Biskupice v. Slovakia, no. 74258/01, § 115, ECHR 2007-XIII, and Broniowski, cited above, §§ 182 and 186).
As to the amount of the compensation, it must normally be calculated based on the value of the property at the date on which ownership thereof was lost. Any other approach could open the door to a degree of uncertainty or even arbitrariness (see Guiso-Gallisay v. Italy (just satisfaction) [GC], no. 58858/00, § 103, 22 December 2009 and Vistiņš and Perepjolkins v. Latvia [GC], no. 71243/01, § 111, 25 October 2012).
Application of the General principles to the present case
The Court has previously explained in Maltese cases before it the different titles on the basis of which the Government can take land in circumstances such as those of the present case.
In cases against Malta where the property was taken under title of absolute purchase, the Court considered that the taking was one amounting to an expropriation (even though sometimes the final deed of transfer was not yet signed, as compensation had not yet been paid) and/or that there had been a deprivation of possessions (see for example, Deguara Caruana Gatto and Others v. Malta, no. 14796/11, §§ 8 and 53, 9 July 2013; Azzopardi v. Malta, no. 28177/12, § 52, 6 November 2014, and B. Tagliaferro & Sons Limited and Coleiro Brothers Limited v. Malta, nos. 75225/13 and 77311/13, § 70, 11 September 2018; see also Gauci and Others v. Malta, no. 57752/16, §§ 22 and 62, 8 October 2019). Admittedly, all these cases did not concern a taking under title of absolute purchase which followed, specifically, a taking under public tenure, as in this case. However, in the recent Cane` and Others v. Malta ((dec.) no. 24788/17, 13 April 2021) the taking under title of absolute purchase which followed a taking under title of public tenure amounted nonetheless to an expropriation, both for the domestic courts and the Court.
The Court further notes that there is no doubt that in terms of the Ordinance, it is the taking under title of absolute purchase which consists of the transfer of the absolute ownership. Thus, the Government’s submissions echoing the novel approach by the Constitutional Court have no bearing on the simple fact that the applicant was deprived of the ownership of her land, by means of the declaration of 13 September 2010. The mere fact that the State had controlled the applicant’s property under different titles – even on conditions which verged onto a de facto expropriation – prior to that date does not alter that conclusion. Had the State wanted to obtain full ownership in 1966 and pay the value of the property at the time, it could have acquired the property under title of absolute purchase at the time, or soon thereafter. It however, failed to do so.
Having regard to the above, the Court notes, that the circumstances of the present case concern property which was the subject of successive takings under titles of possession and use and public tenure (see Saliba and Others, cited above, § 67) and eventually the instantaneous expropriation (in 2010).
The Court reiterates that the scope of a case “referred to” the Court in the exercise of the right of individual application is determined by the applicant’s complaint. A complaint consists of two elements: factual allegations and legal arguments. By virtue of the jura novit curia principle the Court is not bound by the legal grounds adduced by the applicant under the Convention and the Protocols thereto and has the power to decide on the characterisation to be given in law to the facts of a complaint by examining it under Articles or provisions of the Convention that are different from those relied upon by the applicant. It cannot, however, base its decision on facts that are not covered by the complaint. To do so would be tantamount to deciding beyond the scope of a case; in other words, to deciding on matters that have not been “referred to” it, within the meaning of Article 32 of the Convention (see Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, § 126, 20 March 2018).
The Court observes that applicant couched her complaint both before the domestic courts and before this Court only in reference to the expropriation in 2010. Her challenge was precisely that the compensation awarded for the expropriation of her property in 2010, in line with the law, was not proportionate, and at no point had she challenged the proportionality of the rent received while the property had been taken under title of public tenure. This is also confirmed by her request for pecuniary damage before this Court which concerns the value of the land in 2010 and not any loss of rent prior to that date. Thus, as per the applicant’s complaint before the LAB, later the Court of Appeal, and before this Court, her complaint concerns solely the total deprivation of her possessions by means of a taking under title of absolute purchase, which amounted to an expropriation, in 2010. The situation prior to that date is therefore beyond the scope of this case, irrespective of the fact that this situation was brought into play by the domestic courts and the Government.
The Court notes that it has not been disputed that the taking was lawful and in the public interest. It must therefore be determined whether the compensation was proportionate. The Court observes that in accordance with the law, for the deprivation of her possessions in 2010, the applicant is due compensation of EUR 1,398 (on the basis of a calculation that has its origin in the rental value of the property in 1939). In that same year according to the court-appointed architects, the value of the property was around EUR 60,000. Their valuation was based on the footprint of the building apparently unlawfully demolished by the State (compare Zammit and Vassallo v. Malta, no. 43675/16, 28 May 2019) and not on the newly built structure. Thus, the compensation due to the applicant amounts to less than 2.5 % of the market value and is therefore manifestly disproportionate.
As mentioned above, the mere fact that the State already held the property under various titles – which moreover according to the Court’s case-law could also amount to a breach of Article 1 of Protocol No. 1 (see, for example, Zammit and Vassallo, cited above, § 55, and Saliba and Others, cited above, §§ 63-67) – does not alter her right to adequate compensation for the total deprivation of her possessions, in 2010, which till that date she still owned.
It follows that the Maltese State has failed to strike the requisite fair balance between the general interests of the community and the protection of the applicant’s right of property.
There has accordingly been a violation of Article 1 of Protocol No. 1 to the Convention.
