The Constitutional Court has confirmed compensation awarded to the owners of a Paola property burdened by a protected lease for the past 30 years, in a decision embracing the teachings of the European Court Human Rights.

Judgment was delivered on Wednesday upon an appeal by the State confirming the sum of €48,332, including €5,000 in non-pecuniary damages, awarded by the first court in January to the owners who claimed that the applicable laws breached their fundamental rights. 

More importantly, however, the Constitutional Court made reference to a recent judgment by the European Court in Cauchi vs Malta and the considerations therein about the legitimacy of the restrictions suffered by the owners of such protected leases.

Although in most cases, justification stemmed from a social policy aimed at the protection of tenants, “the needs and general interest which may have existed in Malta in 1979 (when the law in question was put in place) must have decreased over the three decades that followed”.

Bearing in mind such legitimate aim, the ECHR declared that the estimated value of such property could be reduced by around 30%, adding that “other public interest grounds may not justify such reduction”.

A further reduction of 20% was attributed to the fact that the property might not have been rented out throughout the entire period, the European Court said. 

The reasoning of that court was adopted by the Constitutional Court and applied to the particular case at hand when reviewing the decision of the First Hall, Civil Court.

The Court, presided over by Chief Justice Mark Chetcuti together with Mr Justices Giannino Caruana Demajo and Anthony Ellul, observed that the Paola property had been rented out by the applicants’ mother in 1990 as a source of income following the sudden loss of her husband.

The fact that the lease was sealed by a signed agreement and that the parties were aware that the rent was renewable, did not detract from the disproportionate burden placed upon the owners who had no idea when they might regain possession of the property. 

The lessee, who lived in the property together with her son, had resided there since 1990 and paid an annual rent of €232.94.

The rent increase in terms of the 2009 legislative amendments was still “inadequate” and did not provide owners with a “decent rent,” observed the court.

When meting out compensation, the first court had taken note of a technical report and deducted €6,972 by way of rent paid, another 35% in view of the general interest and a further 35% in view of the fact that the owners had only sought legal action after 30 years. 

After deducting those amounts from the total sum of €109,532, the first court had awarded compensation to the owners to the tune of €48,332, a sum that was not deemed “excessive” and was confirmed on appeal. 

The breach of the owners’ fundamental property rights under Protocol I to the European Convention for the Protection of Human Rights “alone” was enough to justify the pecuniary compensation liquidated by the first court, said the judges.

Lawyer Carlos Bugeja represented the owners. 

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