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SCHEMBRI AND OTHERS v. MALTA - 42583/06 [2010] ECHR 1365 (28 September 2010)
URL: http://www.bailii.org/eu/cases/ECHR/2010/1365.html
Cite as:
[2010] ECHR 1365
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FOURTH
SECTION
CASE OF SCHEMBRI AND OTHERS v. MALTA
(Application
no. 42583/06)
JUDGMENT
(Just
satisfaction)
STRASBOURG
28
September 2010
This
judgment will become final in the circumstances set out in Article 44
§ 2 of the Convention. It may be subject to editorial
revision.
In the case of Schembri and Others v. Malta,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Nicolas Bratza, President,
Lech
Garlicki,
Giovanni Bonello,
Ljiljana
Mijović,
David Thór Björgvinsson,
Ledi
Bianku,
Mihai Poalelungi, judges,
and
Fatoş Aracı, Deputy
Section Registrar,
Having
deliberated in private on 7 September 2010,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
The
case originated in an application (no. 42583/06) against Malta lodged
with the Court under Article 34 of the Convention for the Protection
of Human Rights and Fundamental Freedoms (“the Convention”)
by Ms Rosaria Schembri, Mr Saviour Schembri, Mr Carmel Schembri,
Mr Anthony Schembri, Mr Emanuel Schembri, Ms Michelina Farrugia,
Ms Catarina Formosa, Ms Mary Fenech, Ms Rosanna Mula,
Ms Anna Zammit and Sr Rosangela Schembri (“the
applicants”), all Maltese nationals, on 4 October 2006.
In
a judgment delivered on 10 November 2009 (“the principal
judgment”), the Court found a violation of Article 1 of
Protocol No. 1 to the Convention. It held that by awarding
compensation for the taking of property reflecting values applicable
decades before and deferring the payment of such for at least twenty
years, that is, until the date of the relevant decision, which did
not take into account this delay, the national authorities rendered
that compensation inadequate and, consequently, upset the balance
between the protection of the right to property and the requirements
of the general interest (Schembri and Others v.
Malta, no. 42583/06, § 45, 10
November 2009).
Under
Article 41 of the Convention the applicants sought just satisfaction
amounting to 2,200,000 euros (EUR), namely, the value of the property
in 2008 according to an architect's valuation whereby the property
was estimated to be worth EUR 1,100 per square metre, in respect of
pecuniary damage and EUR 50,000 in respect of non pecuniary
damage, plus costs and expenses.
Since
the question of the application of Article 41 of the Convention was
not ready for decision, the Court reserved it and invited the
Government and the applicants to submit, within three
months from the date on which the judgment became final in accordance
with Article 44 § 2 of the Convention,
their written observations on that issue and, in particular, to
notify the Court of any agreement they might reach (ibid., § 57
and point 3 (a) and (b) of the operative provisions).
The
applicant and the Government each filed observations.
THE LAW
Article 41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
A. Pecuniary Damage
1. The parties' submissions
The applicants claimed compensation based on the
current value of the land, namely, EUR 2,641,320 as established by an
architect's valuation (based on the advertisements of a private real
estate agency) dated 5 January 2010. They submitted that bearing in
mind the lapse of time between the dispossession and the judgment of
the Court, and the fact that during this time the Government have
been using the property without legal title (since the de jure
transfer has not yet taken place) compensation should be calculated
on the basis of the current value of the property in line with the
approach of the Court in other cases (see Serghides and
Christoforou v. Cyprus (just satisfaction), no. 44730/98,
§ 27, 12 June 2003; Papamichalopoulos and Others v. Greece
(Article 50), 31 October 1995, §§ 37 and 39, Series A no.
330 B; and Former King of Greece and Others v. Greece [GC]
(just satisfaction), no. 25701/94, § 76, 28 November 2002). They
contended that in order to ensure adequate compensation, the date of
the valuation of the property had to be as close as possible to the
date of payment of compensation (Guillemin v. France (Article
50), 2 September 1998, §§ 23-24, Reports of Judgments
and Decisions 1998 VI).
The
damage had to be assessed on the basis of the estimates provided by
the expert valuations (EUR 1,320 per square metre) and the
information furnished by the architects, bearing in mind the size of
the land and its location. The land, which borders a major arterial
road, had a total area of approximately 2001 square metres and was
subdivided into two main plots. It forms part of the Schemed
development of the village of Ghaxaq and has now been divided into
fourteen separate plots. The applicants submitted commercial
valuations showing the price of similarly situated land in a nearby
village, which varied from EUR 1,281 to EUR 1,812 per square metre.
They further submitted that as a result of the authorities' taking of
the land and the delay in payment, they had been compelled to take
out bank loans subject to the payment of interest in order to acquire
other property to build their residences.
The Government submitted that the value which had to be considered as
the basis for the calculation was the value of the land at the time
of its taking as established by the Land Arbitration Board (“LAB”),
namely EUR 17,185. Unlike in the cases of Papamichalopoulos and
Others v. Greece (24 June 1993, Series A no. 260 B),
Belvedere Alberghiera S.r.l. v. Italy (no. 31524/96, ECHR
2000 VI) and Carbonara and Ventura v. Italy, no.
24638/94, ECHR 2000 VI) the Government's de facto taking
of the property had not been unlawful. The measure of taking over the
land while determination of the value was still pending was expressly
provided for by law. In consequence, the only value to be taken into
consideration was that of 1974 when the land at issue was
agricultural land. The area only started to develop into an urban one
subsequently, by means of the Government's construction of a housing
estate. Moreover, any other evaluations submitted by the applicants
have never been put to any form of judicial determination and did not
make reference to the date of the taking of the property. Moreover,
they were speculative and based on prices which land with the most
beneficial building permits could fetch in a “seller's market”
situation.
The
Government further submitted information following the Court's
finding that it was unable to establish responsibility for the lack
of payment after 1995 (principal judgment § 56). They contended
that in 1995 the LAB had fixed the publication of the deed of
transfer for 22 January 1996. However, this had had to be postponed
due to the applicants' appeal, which was eventually declared null and
void as there was no right of appeal in such cases. In its judgment
the Court of Appeal fixed the date for the publication of the deed of
transfer for 22 September 1997. The applicants, however, failed to
turn up on the specified date and on 18 May 1998 they filed
constitutional proceedings, pending which the deed was never
concluded. The Government submitted that the conclusion of the deed
would not have entailed a renunciation of the applicants' rights
before the constitutional jurisdictions, and in consequence the
Government could not be held responsible for the failure to conclude
the deed from 1995 onwards.
In
order to conclude the matter and establish legal title the Government
were willing to pay the sum of EUR 58,457. They submitted that this
sum reflected the value of the land, progressively adjusted for
inflation on a year by year basis from 1974 to 2009, plus interest at
the statutory rate of five per cent per annum on the value as
adjusted year by year during the said period.
2. The Court's assessment
In
reply to the parties' observations, the Court finds it opportune to
refer to its case-law on matters of expropriation. It reiterates that
in the case of Papamichalopoulos and Others it found a
violation on account of a de facto illegal expropriation which
had lasted for more than twenty-five years. The Court accordingly
ordered the Greek State to pay the applicants, for damage and loss of
enjoyment since the authorities had taken possession of the land, an
amount corresponding to the current value of the land, increased by
the appreciation brought about by the existence of buildings which
had been erected since the land had been occupied. This case-law was
consolidated and followed in cases concerning unlawful dispossession,
particularly the judgments Belvedere Alberghiera S.r.l. v. Italy
((just satisfaction), no. 31524/96, 30 October 2003) and
Carbonara and Ventura v. Italy ((just satisfaction), no.
24638/94, 11 December 2003) until a new method of calculation of
damage was explored by the Grand Chamber in Guiso-Gallisay
v. Italy ((just satisfaction) [GC], no.
58858/00, 22 December 2009). In the latter case the Grand
Chamber considered that compensation for unlawful expropriation was
due according to the market value of the land at the date when the
applicants lost their right of ownership. Once the amount obtained at
domestic level was deducted, and the difference with the market value
of the land when the applicants lost ownership was obtained, that
amount was to be converted to the current value to offset the effects
of inflation. Moreover, simple statutory interest (applied to the
capital progressively adjusted) was to be paid on this amount so as
to offset, at least in part, the long period for which the applicants
had been deprived of the land. It further had to assess the loss of
opportunities sustained by the applicants following the expropriation
by having regard to the damage occasioned by the unavailability of
the land during the period from the beginning of the lawful
occupation until the date of loss of ownership. Thus, the Grand
Chamber adopted, for unlawful expropriations, the same method of
calculation used in lawful expropriations (see Scordino v. Italy
((no. 1) ([GC], no. 36813/97, §§ 250-254, ECHR 2006-V)
but added to the non-pecuniary assessment the amount of damage
arising from loss of opportunities.
The
Court notes that, as held in its principal judgment, the
dispossession of the applicants' land in the present case was not
unlawful (see Schembri and Others v. Malta, no. 42583/06, §
31, 10 November 2009). 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. Accordingly, the compensation need
not necessarily reflect the full value of the property (see Former
King of Greece and Others v. Greece [GC] (just satisfaction), no.
25701/94, § 78, 28 November 2002, and Yagtzilar and Others v.
Greece (just satisfaction), no. 41727/98, § 25, 15 January
2004).
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 (see James and Others v. the United Kingdom
judgment of 21 February 1986, Series A no. 98, § 54)
and a total lack of compensation could be considered justifiable only
in exceptional circumstances. 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 (see The Holy
Monasteries v. Greece, 9 December 1994, § 71, Series A no.
301-A; and Jahn and Others v. Germany [GC], nos. 46720/99,
72203/01 and 72552/01, § 94, ECHR 2005 VI).
However,
in the principal judgment the Court 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 (§
40). It further held 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 (§ 42).
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.
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
LAB). Moreover, observing that the Government have not substantiated
their argument that the applicants would not have prejudiced any
future claims had they accepted the compensation awarded in 1995, the
Court considers 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.
While the Court accepts the average statutory rate to be 5 % over the
relevant period, it does not accept the Government's calculation of
interest.
Having
regard to those factors, and ruling on an equitable basis, the Court
considers it reasonable to award the applicants, jointly, EUR 93,000
plus any tax that may be chargeable on that amount.
B. Non-pecuniary damage
The
applicants claimed EUR 6,000 each in respect of non-pecuniary damage.
The
Government submitted that the applicants would already be
appropriately compensated by the payment of the revised amount, and
in any case any award in respect of non-pecuniary damage should not
exceed the amount of EUR 1,000.
The
Court considers that the applicants must have experienced frustration
and stress having regard to the nature of the breach. It therefore
awards the applicants EUR 2,500, each, in respect of non-pecuniary
damage.
C. Costs and expenses
The
applicants claimed a total of EUR 6,095 for costs and expenses
incurred before the domestic courts and this Court, covering legal
fees of two solicitors (EUR 4,295) and an outstanding bill of EUR
1,800. The applicants also attached a taxed bill of costs before the
domestic courts amounting to EUR 3,640, although they have not made
any specific claim in that connection.
The
Government submitted that the applicants still had an outstanding
debt of EUR 3,275.14 in respect of costs they were ordered to pay in
the domestic proceedings but which they had not paid; they thus
considered that this sum should be deducted from the costs claimed.
According
to the Court's case-law, an applicant is entitled to the
reimbursement of costs and expenses only in so far as it has been
shown that these have been actually and necessarily incurred and are
reasonable as to quantum. In the present case the Court notes that it
has found a violation only in respect of Article 1 of Protocol No. 1
and has rejected the complaint under Article 6. Regard being had to
the information in its possession and the above criteria, notably,
the fact that the applicant did not submit any evidence
substantiating the outstanding lawyer's bill and the absence of
details as to the number of hours worked and the rate charged per
hour, and noting that the domestic court expenses, which have not
been explicitly claimed by the applicants, remain due to the
Government, the Court considers it reasonable to award the sum of EUR
6,000 covering costs under all heads.
D. Default interest
The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
Holds
(a) that
the respondent State is to pay the applicants within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention,
(i) EUR
93,000 (ninety-three thousand euros), jointly, in respect of
pecuniary damage;
(ii) EUR
2,500 (two thousand five hundred euros), each, plus any tax that may
be chargeable, in respect of non-pecuniary damage;
(iii) EUR
6,000 (six thousand euros), plus any tax that may be chargeable, in
respect of costs and expenses;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amounts at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
Dismisses the remainder of the applicants' claim
for just satisfaction.
Done in English, and notified in writing on 28 September 2010,
pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Fatoş Aracı Nicolas
Bratza
Deputy Registrar President
