The heirs of the late Marquis John Scicluna have been awarded €500,000 in pecuniary damages by the European Court of Human Rights in a case stemming from the State takeover of National Bank property in the mid-1970s.

The decision, delivered earlier in the week, almost coincided with the anniversary of the marquis’s death which happened on February 14, 1970. 

The proceedings revolved around commercial premises overlooking St George’s Square, Valletta, transferred to Bank of Valletta when the State-owned bank was established in 1973.

The owners of the premises had objected to the takeover, claiming it violated the terms of the original lease agreement whereby their ancestor had rented the property in 1958 for use by Scicluna’s Bank for 10 years, at an annual rent of £800 (€963).

Scicluna’s Bank was subsequently amalgamated with the National Bank of Malta and the lease was renewed in terms of law, extending to adjacent properties abutting Strait Street in 1968.

In terms of the original lease, the property could not be sublet or used for other purposes.

So when the National Bank was taken over by the government, the property owners cried foul, claiming that the move breached the contract and instituted civil proceedings in 1989 to regain possession of the property.

Twenty-one years later, the Court of Appeal found that the lease in favour of the bank was protected until 2028 under Maltese law and, therefore, the ordinary courts were not the competent forum to address the applicants’ complaints.

Following that judgment, the applicants had sought constitutional redress before the Maltese courts, claiming that their right to peaceful enjoyment of property, as well as having a fair hearing within a reasonable time, had been breached.

In February 2016, the First Hall, Civil Court, in its constitutional jurisdiction upheld their claim, ordering the State to pay €1 million in compensation to the marquis’ heirs. 

However, four months later, upon an appeal by the Attorney General, the Constitutional Court had slashed that compensation to €25,000, noting that the applicants had taken 23 years to institute legal proceedings.

Moreover, the amount of compensation had to be assessed in light of the legality of the laws when the property takeover took place. 

As for the eviction request, the court held that constitutional proceedings were not the adequate forum to deal with such a matter which fell within the jurisdiction of the ordinary courts or the Rent Regulation Board.

That judgment had prompted the heirs to take their grievances to the ECHR which confirmed the breach of rights, noting that the Constitutional Court persistently failed to take action to order the eviction of the tenant.

In light of Maltese case law, there did not appear to be a “single final judgment” showing that such a measure had been taken by the Constitutional Court which, rather, generally revoked any decision by the court of first instance along these lines. 

The court also “expressed regret” as to the interpretation by Maltese courts, when presiding over constitutional cases, “as to their impossibility of awarding a higher future rent”.

Awarding a higher rent to the owners could possibly obviate the need for eviction, said the court, noting further that, in this case, such a measure could have covered the period until 2028, when the lease would no longer be protected in terms of law.

“Nevertheless the Constitutional Court did not take that approach,” the ECHR observed.

“An alternative action” that appears to be commonly adopted by Maltese courts “at least since 2016”, was to declare that the tenants could no longer rely on relevant laws to retain their title to the property.

However, such a declaration effectively offered cold comfort to the owners who would have to embark upon further legal action to force the eviction, a requirement deemed “inappropriate” by the ECHR.

The chamber of seven judges, including Madam Justice Lorraine Schembri Orland, went on to declare that there was no justification to delay redress any further, even in view of the fact that these were commercial premises and, in any case, they would cease to be protected in 2028. 

As for the amount of compensation awarded by the Maltese courts, the court observed that these sums, involving pecuniary and non-pecuniary damages as well as costs, were repeatedly found not to offer adequate redress. 

Although the assessment of compensation lay in the discretion of the domestic courts, the amount awarded did “have an impact on the court’s assessment of the applicant’s victim status concerning the length of proceedings complaint”.

When all was considered, the court concluded that the applicants’ rights were breached, and awarded them compensation for pecuniary damages to the tune of €500,000, a further €16,000 for costs and expenses, all payable by the state within three months when judgment became final. 

The request for non-pecuniary damages was turned down even in view of the €25,000 compensation already awarded by the Constitutional Court. 

Lawyers Ian and Mark Refalo and S. Grech assisted the applicants.