Updated 3.34pm with PN reaction below.

The Constitutional Court has ordered the State to pay more than €150,000 in compensation to the owners of a Lija property that has been used as a Labour party club since the 1960s.

Mr Justice Lawrence Mintoff found that the lease arrangements imposed an unfair financial burden on the Seychell family and breached their fundamental rights.

The court said that responsibility for payment of compensation lay solely with the State Advocate, releasing the Labour Party’s Lija district committee from any financial obligation. 

The court said that the Seychell family’s losses stemmed from the legal framework rather than any actions by the Labour Party committee itself.

The case revolves around a property known as "Dar il-Ħelsien," located on Vjal it-Trasfigurazzjoni in Lija, inherited by the Seychell family following the death of Joseph Seychell. 

The Seychells became owners of the premises in 1989, with Joseph’s children inheriting the property as owners, with his widow, Carmen Seychell, holding usufructuary rights. 

The Labour Party’s Lija district committee had leased the property since 1963 for use as a political club, with the annual rent initially set at Lm60.

Despite incremental increases, the rent reached only €978.03 annually.

Contesting the lease, the Seychell family argued that this rental income was meagre and disproportionate to the property’s true value. 

The current rent did not reflect its potential rental worth in today’s market, and the family was legally restricted from adjusting it due to Malta’s rent laws, which imposed long-term restrictions on increases for leases established before 1995. 

Following unsuccessful attempts to renegotiate the lease with the Labour Party, the family filed the constitutional case, asserting that the forced renewal of the rental agreement and minimal rental value violated itsrights to a fair return on its property.

In its judgment, the court recognised that the legal provisions placed an undue financial burden on the Seychell family, who were legally bound to lease the property at below-market rates indefinitely. 

The court acknowledged that, while the property had been let under the original agreement, the prevailing conditions no longer ensured a just balance between the interests of the landlords and the Labour Party’s use of the premises. 

The judge ruled that the Seychells had the right to either reclaim the property or renegotiate the lease terms to reflect a market-adjusted rent.

The amount of compensation was determined by calculating the difference between what the Seychells could have potentially earned at fair market rental value since 1987 - established at €281,131.98 - and the rent they had actually received, €12,569.78.

The ruling emphasised that this compensation addressed the financial losses incurred due to the inadequacies of the current rent and included additional compensation for the strain caused by years of unfairly restricted rent.

Mr Justice Mintoff also mandated that a copy of the judgment be sent to the Speaker of Parliament, urging a review of the rent laws. 

PN: Taxpayers should not foot the bill for Labour abuses 

In a reaction to the judgement, Karol Aquilina, the shadow minister for justice said this was the third court judgement of its kind involving Labour Party clubs, with the state having been ordered to pay a total compensation of €1.3 million.

He insisted that it should be the Labour Party which coughed up the funds.  

"The Maltese workers should not be forced, through their taxes, to pay court-ordered damages for the Labour Party's abuses," Aquilina said in a statement issued by the PN.   

He recalled that in October 2022, a court ordered nearly €1,000,000 in compensation in a case involving the rental of the Labour Party Club in Birżebbuġa.

Then, in December 2022, the same court ordered the government to pay more than €160,000 to property owners after the Labour Party took private property to use as a political club in Santa Venera.

"In just one year, the court has ordered the government to pay over €1,300,000 in compensation for abuses committed by the Labour Party.

"The Nationalist Party expects the Labour Party, led by Robert Abela, to assume responsibility for the abuses it committed and declare that it will cover any court-ordered compensation from its own funds rather than take this money from the pockets of Maltese and Gozitan citizens," Aquilina said. 

Taxpayer money should be used responsibly and not cover abuses carried out by Labour for decades.

"If the over €1,300,000 compensation is paid by the government, it would constitute yet another injustice, this time against Maltese and Gozitan taxpayers." This would also amount to illegal funding of the Labour Party, he said.