It is really no news that the relationship between landlord, tenant and state has been the subject of a multitude of pronouncements delivered by the courts of constitutional jurisdiction.

Perhaps one might argue that these judgments properly embody the living element of the law, with its landscapes changing from judgment to judgment.

And when most lawyers thought the issues between landlord, tenant and state were, so to say, pretty settled, here comes a judgment delivered by the First Hall of the Civil Court sitting in its constitutional jurisdiction that once again changes the landscape drastically.

The judgment in ‘Lorenza Vincenza sive Lora Zarb vs Carmelo sive Charles Caruana, Rita Agius u Avukat tal-Istat’ was delivered on February 25.

The facts of the case were as follows: by contract dated December 17, 1991, defendants Caruana had granted unto a third party, by title of temporary empytheusis for a period of 21 years, a residential property in Vittoriosa.

The temporary grant had to commence on January 15, 1992, against a consideration of Lm120 (circa €279.52) per annum. By means of another contract dated December 14, 1995, the third party rights emanating from the contract dated December 17, 1991, were assigned to plaintiff Zarb for the period remaining; this assignment was adhered to by defendants Caruana.

At the expiration of the 21-year period, plaintiff Zarb refused to vacate the premises. By judgment dated February 24, 2020, the Rent Regulation Board declared plaintiff Zarb as tenant of the premises in Vittoriosa and ordered that the rent due be increased to €6,600 per annum which rent was to increase for the consecutive six years, at the expiration of which, said rent was to be subjected to a fresh revision.

This decision was based on the application of article 12B of act XXVII of 2018, entitling a landlord to file an application before the Rent Regulation Board demanding that the rent be revised to an amount not exceeding two per cent per annum of the open market freehold value of a dwelling house on the first day of January of the year during which the application is filed and that new conditions be established in respect of a lease.

Plaintiff Zarb then petitioned the First Hall of the Civil Court sitting in its constitutional jurisdiction and requested it to declare that the legislation forming the basis for the afore-stated decision of the Rent Regulation Board (article 12B of act XXVII of 2018) breached her rights under article 1 of the First Protocol of the Convention for the Protection of Human Rights and Fundamental Freedoms and under article 37 of the Constitution of Malta in that the said decision undermined her legitimate expectation to continue in the occupancy of the property in Vittoriosa under the same conditions, including the rent, as per the contract she had signed in 1995.

When laws introduce new relationships between people, or change existing ones, they must give advantage to society and the individual

Article 1 of the First Protocol of the Convention for the Protection of Human Rights and Fundamental Freedoms states: “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 court, presided over by Mr Justice Grazio Mercieca, had the following consideration to make.

Article 1 of the First Protocol of the Convention for the Protection of Human Rights and Fundamental Freedoms does not provide a definition of the term ‘possessions’. Referring to jurisprudence the court, however, noted that the term, or concept, is to be interpreted in a wide manner, inclusive also of interests of an economic value.

The court, in fact, referred to judgments of the European Court of Human Rights wherein it was stated that “the issue that needs to be examined is whether the circumstances of the case, considered as a whole, may be regarded as having conferred on the applicant title to a substantive interest protected by that provision”.

Financial rights and interests having an economic value, the court observed, fell well within the purview of article 1 of the First Protocol of the Convention.

Similarly, according to the convention, the concept of ‘possessions’ extends to legitimate expectations in that according to constant case law, the court observed, ‘possessions’ can be either existing possessions or assets, including claims, in respect of which plaintiff Zarb could argue that she has at least a ‘legitimate expectation’ of obtaining effective enjoyment of a property right.

Then honing in on article 37 of the constitution, the court noted that this specific article relates to “property of any description” and “interest in or right over property of any description” concluding, therefore, that even this specific provision of the law should embrace the notion of legitimate expectation.

The court concluded that it could well declare that the law conferred upon the plaintiff Zarb a legitimate expectation relating to the continued enjoyment of the property in Vittoriosa. It further stated that new ideas give rise to new relationships, and the legal order cannot but change and develop to keep up with this progress.

In the court’s words, justice needs to be an indispensable ingredient of such development.

When laws introduce new relationships between people, or change existing ones, the court opined, they must give advantage to society and the individual at the same time, upholding also the consideration that these new laws must cater for existing rights that have not yet been developed.

Just as the landlord enjoys the fundamental right to enjoy his/her property, so too does the tenant.

After noting an urgent need for the state to intervene in order to protect the vulnerable section of Maltese society, the court declared that plaintiff Zarb had, and has, a legitimate expectation and/or possession that is protected and sanctioned under article 1 of the First Protocol of the Convention for the Protection of Human Rights and Fundamental Freedoms.

Under article 37 of the constitution of Malta, the court declared that the application of article 12B of act XXVII of 2018 constitutes a violation of the fundamental rights of plaintiff Zarb and ordered the State Attorney to pay tenant Zarb compensation in the sum of €120,000, with interest from the date of judgment and with costs against the State Attorney.

This judgment is subject to appeal.

Open the flood gates!

Rebecca Mercieca is a junior associate at Azzopardi, Borg and Associates Advocates.