The Maltese Constitutional Court in its decision of the 19th of February 2020 has consolidated the reasoning recently embraced by the Maltese Superior Courts in the context of affording an effective remedy to tenants, who have long time been discriminated against in view of the topical rent scenario and the application of the rented property legislation regulated by Chapter 158 and Chapter 69 of the Laws of Malta and Act X of 2009 effectively bringing about automatic renewal of the rent and failing to strike a fair balance between the interests of the landowners and of the tenants. A disparity considered to be a hindrance to the landowners in securing satisfactory real income and enjoyment of their own property and thus in contradiction with their rights safeguarded by Article 1 of the European Convention on Human Rights and Article 37 of the Maltese Constitution. The decision is yet another one in the space of a few months to reiterate the conclusions of the same Court as differently composed eight months ago , a finding subsequently confirmed in successive judgements.
Background on rent decision
On 19th February 2020, the First Hall (Civil Court) in its Constitutional Jurisdiction as presided over by Madam Justice Anna Felice delivered a decision on strength of recent national judgements and of EctHR case-law in which the Court declared that the application of the rent regulating laws breached the fundamental human rights of plaintiff Emanuel Ciantar, an owner of a warehouse in Marsa – which property was being rented for a miserely €2.91 a day payable every six months in advance. This property had been bequeated to Ciantar by his father by virtue of a deed published in 1991. Mr. Ciantar’s father had rented the warehouse to Grech and Co. Limited on October 1975 thereby regulated by Chapter 69 of the Laws of Malta. As described by the plaintiff in his writ of summons, the property was situated in a commercial area which, also considering its proportions (377m2) had the potential of generating between €30 and €50 a day. Ciantar explained that as soon as he had inherited the property, he made efforts to persuade the tenant company with an increase of Lm5 (€11.65) per day over the said property, including with the issuance of an official letter. The company declined and this resonated with the decision taken by the Rent Regulation Board in 2004 by which the Board held that there were no prospects for an increase in rent on the said warehouse. To make matters worse for Ciantar were the draconian restrictions of the law itself given that so long as Chapter 69 remained in force all hopes of claiming back possession of the warehouse leased as a ‘shop’ were futile.
Court’s forma mentis
In view of the adversities, the plaintiff called upon the Constitutional Court to tip off the balance in his favour and in concrete terms declare the unconstitutionality of the provisions of the Reletting of Urban Property (Regulation) Ordinance as a 1930s legislative remnant and have his right to enjoy property unfetteredly restored. The Court made reference to European case-law, notably Amato Gauci vs. Malta (App no. 47045/06) on the requirement of proportionality:
“a measure aiming at controlling the use of property can only be justified if it is shown, inter alia, to be ‘in accordance with the general interest’
In juxtaposition with this consideration, Madam Felice quoted Lithgrow and Others v. United Kingdom laying emphasis on the criterion of ‘fair balance’:
“The Court recalls that not only must a measure depriving a person of his property pursue, on the facts as well as in principle, a legitimate aim ‘in the public interest’, but there must also be a reasonable relationship of proportionality between the means employed and the aim sought to be realised.”
The Constitutional Court furthermore made a striking parallelism between Ciantar’s situation and the cause celebre of Amato Gauci v. Malta:
“The European Court considered in detail the impact that 1979 Act had on the property of applicant Amato Gauci. The Court further observe that the applicant could not enjoy the physical possession of his own property and could not terminate the lease: ‘Thus, while the applicant remained the owner of the property he was subjected to a forced landlord-tenant relationship for an indefinite period of time’.
This in the considered opinion of the Court was the crux of the case.
‘Legislation a manifest disadvantage to landowners’
The Court probed into the grievance of Ciantar in an attempt to identify whether there had been an infringement of Article 37 of the Constitution and Article 1 of Protocol 1 of the European Convention. The Court observed that Article 1 of the Convention had three pillars namely:
- The peaceful enjoyment of one’s property.
- The deprivation of one’s property is subject to conditions.
- The State should have the right to control the use of property depending on the general interest of society as a whole.
All these were pertinent as reflective of the principle of State infringement with the right to unperturbed enjoyment of property. Any kind of interference has to be compatible with the principles of legality, legitimate aim in the interest of the common good and the principle of fair balance, the Court ruled.
The Court also referred to the interesting case of Emanuel Bezzina et v. Avukat Ġenerali et in which it made a historical synposis en passant of the retrorgrade measures of the rent regime currently in force, which although marked by genuine legislative interventions, failed to keep the same pace with the increase of the economic growth and enhancement of public expenditure.
Rather than maintaining a fair balance this counter-productively caused a disproportionate burden and a ‘manifest disadvantage’ vis-a-vis landowners.
On account of the explored case-law and the ingredients of the case at hand, the Constitutional Court declared that the reletting laws in force breached the fundamental human rights of the plaintiff and asserted that the provisions of Article 69 were not applicable to the lease in question.
Finally, the Constitutional Court awarded plaintiff a compensation of €20,000 in constitutional damages.
Such costs are to be borne by the State Advocate.
For further information on matters concerning property law and leases please contact any member of IURIS Advocates as well as our practice area of Human Rights.