Failure to pay compensation for an expropriation that occurred for more than 50 years violated the right to property.
Gauci and others v. Malta 08.10.2019 (no. 57752/16)
Expropriation, public interest and unpaid compensation.
The applicants were deprived of the use of their land because of the forced expropriation. Their land was privatized but for the use of the public interest. Although they were recognized as beneficiaries of compensation by the domestic courts, only a small portion of the amount was paid in accordance with the judgments.
The ECtHR found that the Government had not justified the authorities’ failure to pay the applicants compensation for approximately 58 years! It found that there had been a violation of Article 1 of the First Additional Protocol and condemned Malta for the payment of the rest of the compensation calculated on the value of the land at the time of receipt but plus interest.
Article 1 of the First Additional Protocol
The applicants are 26 Maltese nationals (one with dual Maltese and American nationality) and two British nationals who were born between 1929 and 1979. They live in San Ġiljan, Mellieħa, Swieqi, Baħar iċ Ċagħaq, Paola, and Sliema (Malta), Kent, Somerset, Plymouth, and Middlesex (the United Kingdom), and Cork (Republic of Ireland).
The case concerned the applicants’ complaint that land they had owned had been expropriated without there being a public interest at stake and that they had not been paid compensation.
The applicants owned stakes in almost 4,000 square metres of land in Għadira Bay. In 1957 the authorities decided to expropriate the land at a time when other plots in the area were being taken for coastal development. In 1992 part of the land was granted to a company under a concession.
The applicants took legal steps over the years to try and recover their land, including constitutional proceedings which began in 2009. In 2015 the Civil Court (First Hall) in its constitutional competence found a breach of their property rights under the Convention and awarded them 20,000 euros in respect of non-pecuniary damage. It did not set an award in respect of pecuniary damage.
The court noted that 58 years after the expropriation the applicants had still not received a deed of transfer or any compensation. The judgment was confirmed on appeal.
The applicants complained about the taking of their land under Article 1 of Protocol No. 1 (protection of property) to the European Convention.
THE DECISION OF THE COURT…
The Court considers that given the findings of the domestic courts as to a violation of the invoked provision it does not need to examine the questions whether there was a deprivation of property and whether it was in accordance with the law.
However, the Court finds it pertinent to express itself in particular on the public interest requirement contested by the applicants, especially given that the finding concerning the public interest has an impact on the compensation due.
The Court reiterates that, while deprivation of property effected for no reason other than to confer a private benefit on a private party cannot be “in the public interest”, the compulsory traNsfer of property from one individual to another may, depending on the circumstances, constitute a legitimate means of promoting the public interest. Moreover, the taking of property effected in pursuance of legitimate social, economic or other policies may be in “in the public interest”, even if the community at large has no direct use or enjoyment of the property taken.
The Court considers that, as accepted by the domestic courts at two instances, the taking of the property for the purposes of the “Għadira Scheme” in order to embellish the area and ensure relevant facilities to enhance tourism, was a measure in the public interest. In the Court’s view such a measure, in the context of economic reform, cannot be considered unreasonable, particularly given the wide margin of appreciation when implementing economic policies. The fact that a part of that land (around one tenth according to the architect’s report submitted by the applicants) was given on concession to a third party, does not detract from that interest. That public interest persisted from 1967 (date of ratification) to date.
As to proportionality, the Court notes that, in the present case, the applicants have never received any compensation for the taking of the property in 1957, despite an alleged offer in 2006, and an order by the Constitutional Court in 2016. In this connection it is noted that the Government did not contest the facts as set out above, which stated that the applicants had not been formally notified of such an offer . It is thus unclear in what way the applicants could have withdrawn or contested such sums, after 2006, even more so given that the Government was to date contesting their title to the property. It is also undisputed that no payment was ever made after the order of the Constitutional Court. Thus, the Court considers that the Government have not provided any justification for the failure of the authorities to pay such compensation to the applicants over time.
The Court is of the opinion that (quite apart from the adequacy of the compensation) the above delay in the payment of compensation as a result of which the applicants are still without any compensation more than five decades after the Convention and the relevant Protocol came into force in respect of Malta, fails to meet the requirements of Article 1 of Protocol No. 1.
There has accordingly been a violation of that provision.
APPLICATION OF ARTICLE 41 OF THE CONVENTION
As the Court has held on a number of occasions, a judgment in which the Court finds a breach imposes on the respondent State a legal obligation to put an end to the breach and make reparation for its consequences in such a way as to restore as far as possible the situation existing before the breach. The Contracting States that are parties to a case are in principle free to choose the means whereby they will comply with a judgment in which the Court has found a breach. This discretion as to the manner of execution of a judgment reflects the freedom of choice attached to the primary obligation of the Contracting States under the Convention to secure the rights and freedoms guaranteed (Article 1). If the nature of the violation allows of restitutio in integrum it is the duty of the State held liable to effect it, the Court having neither the power nor the practical possibility of doing so itself. If, however, national law does not allow – or allows only partial – reparation to be made for the consequences of the breach, Article 41 empowers the Court to afford the injured party such satisfaction as appears to it to be appropriate (ibid.). The Court notes that while restitution of the property does not appear impossible given that no use has been made of it, the Government have not offered to return it, nor indicated that they were interested in doing so, maintaining solely that such action was not called for.
In the absence of such action, it is thus for the Court to award compensation noting that there is no risk that the applicants will receive pecuniary compensation twice, as the national authorities will inevitably take note of this Court’s award when finalising the contract of expropriation.
As the Court has already noted the taking in the applicant’s case did not lack public interest. In this connection the Court reiterates that 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
The source of the violation was the delay in instituting the relevant proceedings and the fact that to date – more than sixty years after the taking of the land (and more than fifty from when the relevant provision became applicable to Malta) – the applicants have still not been awarded any compensation for their property.
The Court notes that in similar cases the sum to be awarded to the applicants was calculated on the basis of the value of the land at the time of the taking, converted to the current value to offset the effects of inflation, plus simple statutory interest applied to the capital progressively adjusted. However, in the present case the Court does not lose site of the fact that in 2006 a fresh declaration had been issued, in the absence of any conclusion to the declaration issued in 1957. The Court will also take account, to the extent necessary, of the location of the property and the possibilities it could have had over the years because of such location, bearing in mind however that when it was taken it was solely used as a caravan site.
Having regard to the above the Court considers it reasonable to award the applicants EUR 150,000, jointly, plus any tax that may be chargeable on that amount, in compensation for the expropriation.
Bearing in mind the award of EUR 20,000 granted by the domestic courts, which remains payable, the Court does not find it necessary to make an award in respect of non-pecuniary damage(echrcaselaw.com).