Court confirms €100,000 damages for Testaferrata landowners over Rabat property

A group of some 20 landowning families from the Maltese nobility have won an appeal filed by the Prime Minister, as well as €100,000 in damages, in a case for compensation on a breach of their property rights.

The plaintiffs included the Testaferrata Moroni Viani, Gera de Petri, Preziosi, Testaferrata Bonici, and Sant Manduca families amongst others.

They are the owners of land along the Gorg Borg Olivier road in Rabat, which in 1881 was granted on temporary emphyteusis and later inherited by the defendants Ian Ellis and his sister Elizabeth Scilio. The land was developed into several residences including one owned by the defendants.

The emphyteusis lapsed in 1980, but the defendants refused to surrender the property. A court case filed to take back the land was put off sine die, pending the outcome of the case at hand.

In their constitutional case against the Prime Minister, the government argued that the 1979 Housing (Decontrol) Ordinance – allowing the conversion of emphyteutical agreements into rental contracts – was in line with the Constitution. Defendants Ellis and Scilio argued that the government had the right to control the right to property in the public interest.

In June 2020, the Maltese courts ruled that the law breached the plaintiffs’ fundamental rights, once again declaring the nullity of the Housing ordinance, and halting the conversion of the emphyteusis into a perpetual agreement.

After ordering damages of €100,000, the Prime Minister filed an appeal.

But the Court of Appeal noted that the appellants had tacitly accepted the plaintiff’s claims that the property had been deprived without compensation. The Court said the appeal was “manifestly unfounded on the merits”, pointing out that the defendant did not simply want the emphyteutical agreement to be converted to a lease at the expiry of the period, but into a perpetual one. “This conversion would have the effect of rendering the repossession of the property practically impossible for them, and this when the plaintiffs never intended to be divested of the use of the property forever.”

The Court argued that there was no proportionality in taking back the property “at such a low price as to almost be uncompensated.” Neither was there a social reason for repossession, as the persons entitled to acquire the property were not residents there and had other properties which belonged to them.

The conversion to a perpetual emphyteusis also denied the landowners the use of the property for good, against their will.

“The compensation which should be liquidated by the Courts should be based on objective criteria and must keep a proportional relationship with the value of the property in question,” the Court said, referring to the property being valued at €361,000 in 1995. But the value had clearly increased substantially since then.

The Court of Appeal ruled that there was no reason for the diminution of the €100,000 in damages, rejecting the Prime Minister’s appeal, with costs.