ECHR orders government to pay more than €100,000 in damages over 1974 land expropriation

Moreover, the ECHR’s judgement, which was delivered by the Court’s fourth section yesterday, composed of seven judges including former Maltese judge Giovanni Bonello, also awarded €2,500 to each applicant in respect of non-pecuniary damage and another €6,000 jointly for costs and expenses

The Court had originally ruled on 10 November 2009, that their property had been expropriated in violation of Article 1 of Protocol 1 of the Convention in respect of protection of property in view of the inadequate compensation awarded by the Maltese Government, which reflected values applicable decades earlier, and the delay in the payment of such compensation.

However, the Court had held in its judgement last year that the question of the application of Article 41 on just satisfaction was not ready for decision.

The eleven Maltese nationals, Rosaria Schembri, Saviour Schembri, Carmel Schembri, Anthony Schembri, Emanuel Schembri, Michelina Farrugia, Catarina Formosa, Mary Fenech, Rosanna Mula, Anna Zammit and Sr Rosangela Schembri, on 4 October 2006 had filed an application against Malta under Article 34 of the Convention.

Under Article 41 of the Convention the applicants had sought just satisfaction amounting to €2,200,000 including the value of the property in 2008 according to an architect's valuation whereby the property was estimated to be worth €1,100 per square metre, in respect of pecuniary damage and €50,000 in respect of non-pecuniary damage, plus costs and expenses.

All but one of the applicants live in Ghaxaq. Their complaint concerned the expropriation of two plots of land in Ghaxaq that belonged to them.

In its judgement, the Court recalled that, “as held in its principal judgment, the dispossession of the applicants' land in the present case was not unlawful. Thus, in the present case it is the lack of adequate compensation and not the inherent unlawfulness of the taking of the land that was at the origin of the violation found under Article 1 of Protocol No. 1,” the ECHR insisted.

Accordingly, “the compensation need not necessarily reflect the full value of the property,” it added.

In such cases, in determining the amount of adequate compensation, the Court “must base itself on the criteria laid down in its judgments regarding Article 1 of Protocol No. 1 and according to which, without payment of an amount reasonably related to its value, a deprivation of property would normally constitute a disproportionate interference which could not be considered justifiable under Article 1 of Protocol No. 1 and a total lack of compensation could be considered justifiable only in exceptional circumstances,” the Court explained.

“The provision did not, however, guarantee a right to full compensation in all circumstances since legitimate objectives of public interest may call for less than reimbursement of the full market value,” it warned.

However, in the principal judgment the Court had held “that the taking in the present case did not pursue any pressing public interest objective capable of justifying reimbursement of less than the market value”.

The ECHR had further ruled that “the compensation as established by Maltese law, amounting to a sum equal to the price of the land at the time when the declaration had been served, namely 1974, plus interest at 5% was not sufficient to offset the failure to pay compensation to that date”.

“In this light and bearing in mind recent case-law which has, in the ambit of non-pecuniary damage, diminished the distinction between lawful and unlawful expropriations, the Court considers that notwithstanding the hybrid nature of the taking, the non-pecuniary damage in the circumstances of the present case falls to be assessed according to the constant jurisprudence for lawful expropriations,” the ECHR ruled.

However, since according to the Maltese legal context, the applicants have to date not lost ownership of the property, the Court “considers it appropriate to base itself on the value of the land when the applicants first lost possession.

“Thus, in the present case, the starting point of the calculation is the market value of the land at the time of the taking in 1974 as established by the Land Arbitration Board (LAB),” the ECHR ruled.

 The Court also ruled since the Government had not substantiated their argument “hat the applicants would not have prejudiced any future claims had they accepted the compensation awarded in 1995, the Court considered that “this further delay must also be taken into account”.

“Accordingly, the sum to be awarded to the applicants should be calculated on the basis of the value of the land at the time of the taking, to be converted to the current value to offset the effects of inflation, plus simple statutory interest applied to the capital progressively adjusted. As in the present case the applicants have not yet received any payment at the national level, no such deductions are necessary,” the ECHR ruled.

While the Court accepted the average statutory rate to be 5% over the relevant period, it “does not accept the Government's calculation of interest”.