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Cite as: [2011] ECHR 1613

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FOURTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 64792/10
by TRIMEG LIMITED
against Malta

The European Court of Human Rights (Fourth Section), sitting on 27 September 2011 as a Chamber composed of:

Nicolas Bratza, President,
Lech Garlicki,
Päivi Hirvelä,
George Nicolaou,
Ledi Bianku,
Zdravka Kalaydjieva,
Nebojša Vučinić, judges,
and Lawrence Early, Section Registrar,

Having regard to the above application lodged on 12 November 2010,

Having deliberated, decides as follows:

THE FACTS

The applicant, Trimeg Limited, is a company registered in Malta as from 1987, which has its registered address in Valletta. It was represented before the Court by Dr I. Refalo, a lawyer practising in Valletta.

A. The circumstances of the case

1. Background of the case

The facts of the case, as submitted by the applicant, may be summarised as follows.

On 5 January 1988 the applicant company acquired three pieces of land measuring 1,864, 1,124 and 7,993 square metres, respectively, and 10,981 square metres in total, at a price of 60,000 Maltese liras (MTL) – (approximately 140,000 euros (EUR)), with the aim of developing the land for commercial purposes.

At the time of purchase, the land situated at the upper reaches of “the valley” was included within the “limits to development” within the meaning of the Temporary Provisions Scheme (18 November 1997) issued by the relevant authority, namely the Works Department. The applicant alleged that the land within the development zone as delineated by the Temporary Development Schemes was at the time considered to have development potential, even though the exact layout and type of development had not yet been determined. The area in which the applicant company’s property was situated was marked as a “white area”, which, according to the applicant, meant that no specific type of development had yet been determined for the site, as opposed to a “green area”, which meant that it was to be conserved and that no development would be allowed. Moreover, the land was situated within the boundaries of development. It followed, according to the applicant, that development of the zone was surely permissible.

Between 1992 and 2006 land development in Malta was generally governed by the guidelines set out in the Temporary Provisions Schemes. During this time, the applicant company alleged that various properties in the vicinity of its land, situated within the “white area”, had been developed (mostly for residence purposes) and the Government had built social housing complexes in the area. In 1998 (after the scheduling order referred to in the paragraph below came into effect) permission was given to build a road, giving access to two private hotels situated further in from the applicant company’s land, at the lower reaches of “the valley”.

By a notice (no. 583) published in the Government Gazette of 6 September 1996, the site owned by the applicant was declared to be scheduled for conservation purposes in terms of section 46 of the Development Planning Act (1992) (“the Act”). The Malta Environment and Planning Authority (“MEPA”), the successor to the Works Department, considered the site to form part of the valley protection zone and its buffer zone, entailing level-four protection, namely the lowest level of protection for scheduling purposes. In consequence, the use of the land was limited to agricultural purposes.

A number of different applications lodged by the applicant company on unspecified dates, asking for permission to develop the land, were dismissed by MEPA.

2. Proceedings before the Planning Appeals Board

On 25 February 1997 the applicant company filed an appeal with the Planning Appeals Board (“PAB”) against the scheduling of its land. It argued that the area at issue should not have been scheduled in this way since there was no reason to conserve it, apart from the maquis vegetation found at its north eastern edge. Nor could the land be considered to be rural, bearing in mind that it was surrounded by a highly urbanised area. According to its experts’ reports, the applicant company was of the view that the area should be considered suitable for commercial development and not a valley protection zone, a notion which was not mentioned in the Structure Plan. Nor could it be considered to be a rural conservation area, an area of ecological importance or a site of scientific importance.

By a judgment of 20 September 2002 the applicant company’s appeal was dismissed and the contested scheduling confirmed. Referring to the findings of the Planning Directorate, the PAB considered that the land at issue served as a buffer zone to the ecologically important “valley” and, therefore, qualified as a level-four protection area of ecological importance, mainly acting as a buffer zone to the more important “valley”. The inclusion of buffer zones had been mentioned in the Structure Plan’s Explanatory Memorandum as falling under the heading of areas of ecological importance and sites of scientific importance. Moreover, the applicant company had acknowledged the existence of the maquis vegetation, and this in itself allowed for the lowest level of protection according to the Structure Plan and Policy RCO 12 and therefore sufficed, according to the applicable law, in order to declare the land to be scheduled for conservation purposes. As to the use of the land for agricultural purposes, although this was not established by MEPA, this was the actual use to which the land was being put at the relevant time. In conclusion, the land was indeed of ecological/scientific importance, and even though the term “valley protection zone” was not a legal term, it was understood as falling under the definition of areas which were to be protected according to Policies RCO 15 and 1.

3. The appeal proceedings

On 7 October 2002 the applicant company appealed to the Court of Appeal. During these proceedings, in 2004, it further complained that the State was infringing its property rights since: (i) MEPA had acted outside the parameters of the law by de facto expropriating the property, as the Act did not provide for the scheduling of property for valley protection or buffer zones; (ii) the scheduling was not required for a public purpose; and (iii) the Act did not provide for payment of compensation upon the scheduling of property, notwithstanding that its property had diminished in value (allegedly from EUR 11,000,000 to EUR 230,000). The applicant company insisted that when it had acquired the land it was already situated in a developed area and, indeed, part of its land had been taken for the purpose of building a road to guarantee access to the built-up entertainment zone. However, as a consequence of the scheduling in question, the land had become worthless and the applicant company’s investment futile. Moreover, since other permits had been issued for development of the area notwithstanding its environmental value, the applicant company had been discriminated against in the dismissal of its requests.

On 2 March 2005 the Court of Appeal referred the matter to the constitutional jurisdiction.

4. Constitutional proceedings

By a judgment of 16 October 2007 the Civil Court (First Hall), in the exercise of its constitutional jurisdiction, upheld the applicant company’s claims in part. It considered that, although there had not been a de facto expropriation, the State had been controlling the use of the applicant company’s property, thereby limiting the latter’s right of ownership. It was not necessary to go on to consider the legality of the measure, as this was deemed to be within the competence of the ordinary courts. It then considered it relevant that when the applicant company had purchased the land, it had been aware that the land was situated in a “white area”, which meant that only limited development could take place. In the meantime the land had become a “green area”, and development was no longer possible, in order to protect the valley on the periphery of which the applicant’s land was situated. The court held that while it was true and unfortunate that the area surrounding the valley was fully developed, it was legitimate and in the general interest for MEPA to protect what was left of it. However, it considered that there had been a violation of the applicant company’s rights since no compensation had been granted to it following the permanent scheduling of its land. Lastly, it held that the applicant company had not been discriminated against, as the only land in a comparable position, namely land which had been scheduled but on which development had nevertheless been permitted, was the road built by the Government. This constituted a project in the general interest, as opposed to the applicant company’s project, which was solely commercial and in the interest of private parties. Thus, the difference in treatment had been justified.

MEPA and the Attorney General appealed and the applicant company cross-appealed. By a decision of 19 January 2009 the Constitutional Court rejected a request by the applicant company for leave to submit new evidence.

By a judgment of 14 May 2010 the Constitutional Court upheld in part the first-instance judgment and quashed the rest, dismissing all the applicant company’s original claims. It emphasised that the applicant had purchased the land when it had been designated as a “white area”. Thus, the potential for development of the land was limited and uncertain, since no guidelines or framework had yet been put in place to regulate it. In fact, as happened in the applicant company’s case, its land was eventually scheduled as a level 4 buffer zone to “the valley”, which was highly protected (level 1), being an area of ecological and scientific importance. The scheduling of the applicant company’s land had been in accordance with the relevant policies (namely, RCO 10-12) and the Structure Plan, which provided that “small to medium scale physical developments can be considered, provided no suitable alternatives exist and features of ecological and scientific interest are protected, in so far as a suitable environmental impact assessment is made”. Moreover, at the date of judgment the land had become a green area according to the 2006 Local Plan.

In answer to the applicant company’s grounds of appeal, it confirmed that the validity (legality) of the scheduling was a matter for the ordinary courts to decide, and that the site was worth protecting in the general interest. The measure of control over use of the property had further restricted its use in that after the original designation of the land as a white area, which might have permitted full development in the future, the land had subsequently been scheduled so as to limit its use to “small to medium scale physical development”, according to certain conditions. However, bearing in mind the State’s margin of appreciation in imposing planning restrictions, the aim of the measure had been legitimate and it could not be said that every scheduling of property required adequate compensation. In the present case the applicant company had not been certain that it would be granted permission to develop the land in the future, as the land had been designated as a “white area”; thus, the applicant company had in fact engaged in a commercial speculation project. It followed that the applicant company did not have a legitimate expectation that it would be granted such permits and in consequence it could not be said that it had suffered a disproportionate burden. In the light of the foregoing, no right to compensation arose.

Lastly, as to the complaint regarding discrimination, it considered that the State could reasonably have dispelled environmental concerns when building a road in the public interest, a matter which was within its margin of appreciation. Similarly, the authority had not used its discretion manifestly without reasonable foundation when it had failed to schedule the housing estate built by the Government in an area closer to the valley than the applicant company’s land, and such a difference in treatment had not been illegitimate or oppressive.

5. Continuation of the appeal proceedings

Following the constitutional referral mentioned above, on 7 October 2010 proceedings resumed before the Court of Appeal, which by a judgment of 24 February 2011 dismissed the applicant company’s appeal. The Court of Appeal considered that all the grounds raised by the applicant company had been dealt with in the PAB’s decision and any argument relating to the fact that the PAB had based its decisions on reasons which had not been mentioned in the original scheduling order could not be entertained since this matter had never been brought to the attention of the PAB. Moreover, the applicant’s appeal before the PAB only concerned matters of fact and not of law, and therefore no appeal to the Court of Appeal could lie on this ground, such appeals being limited only to points of law in accordance with section 15 (2) of the Act. It further considered that the scheduling had not been done on the basis of the rural character of the land, but for the reasons enunciated by the PAB, which had been acting within the parameters of the law.

6. Other developments

On 18 May 2006 MEPA adopted the North Harbour Local Plan, setting up a framework upon which the authority would base its decisions on land use and development for the next ten years. The applicant company submitted that, as transpired from this plan and the refusal of its applications, further development was to be carried out in the area surrounding “the valley”. Indeed, the 2006 plan extended the development zone which had been earmarked in the 1996 schedules and 2000 plan. In 2008 the 1996 Notice was amended to remove an area of land from the scheduled property (not owned by the applicant company) and extended the scheduled boundary to cover the entire valley system, delineating the buffer and constraint zone. It further transpired that there was a plan to build a further arterial road which would pass right through the applicant company’s land and, according to evidence given during the domestic proceedings, a further descheduling would take place to accommodate this project.

B. Relevant domestic law

Section 15 (2) of the Development Planning Act, Chapter 356 of the Laws of Malta, reads as follows:

“The decisions of the Planning Appeals Board shall be final. An appeal shall lie to the Court of Appeal constituted in terms of article 41(6) of the Code of Organisation and Civil Procedure from such decisions only on points of law decided by the Board in its decision.”

Section 46 (1) of the Act, before being repealed in 2010, read as follows:

“The Authority shall prepare, and from time to time review, a list of areas, buildings, structures and remains of geological, paleontological, cultural, archaeological, architectural, historical, antiquarian, or artistic or landscape importance, as well as areas of natural beauty, ecological or scientific value (hereinafter referred to as ‘scheduled property’) which are to be scheduled for conservation and may in respect of all or any one or more of the scheduled property make conservation orders to regulate their conservation. ...”

COMPLAINTS

The applicant company complained that the State had infringed its property rights under Article 1 of Protocol No. 1 to the Convention read alone and in conjunction with Article 14.

THE LAW

I. THE COMPLAINT UNDER ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION

The applicant company complained that the State had infringed its property rights under Article 1 of Protocol No. 1 to the Convention. In particular, MEPA had acted outside the parameters of the law by de facto expropriating its property, particularly because the scheduling of property for the purposes of providing a buffer zone or creating a valley protection system was not contemplated in the Act, the scheduling was not required for public purposes, and the Act did not provide for the payment of compensation upon the scheduling of a property and the ensuing loss of value.

Article 1 of Protocol No. 1 reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

The Court reiterates that “Article 1 in substance guarantees the right of property. It comprises ‘three distinct rules’: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property by enforcing such laws as they deem necessary in the general interest. However, the three rules are not ‘distinct’ in the sense of being unconnected: the second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule .” (see, inter alia, Tre Traktörer AB v. Sweden, 7 July 1989, § 54, Series A no. 159, and Fredin v. Sweden (no. 1), 18 February 1991, § 51, Series A no. 192).

In the instant case the scheduling of the applicant company’s land constituted an interference with its right to the peaceful enjoyment of its possessions. The Court rejects the applicant company’s contention that the measure represented a de facto expropriation of its property. The measure amounted to a control of the use of property, which falls to be considered under the second paragraph of Article 1 of Protocol No. 1.

As to the lawfulness of the interference, the Court first of all notes that the disputed measure was based on section 46 (1) of the Development Planning Act (see “Relevant domestic law” above) and that it was, therefore, provided for by law. Moreover, the Court notes that it has only limited power to review domestic law and it is in the first place for the national authorities to interpret and apply their laws (see, inter alia, Tre Traktörer AB, cited above, § 58). The Court notes that the constitutional courts did not look into the matter, which was surely within their competence. However, while it is true that the ordinary domestic courts’ finding that the interference was “lawful” referred repeatedly to policies, section 46 (1) of the Act generally allowed for the scheduling of land of ecological or scientific value, a reason cited in the Government notice scheduling the property.

As to the purpose of the interference, the Court considers that in this case the interference pursued an aim that was in the general interest, namely the conservation of areas of ecological and scientific value, in accordance with international requirements.

Lastly, the Court has to consider the proportionality of the interference. With respect to this, it notes that the second paragraph of Article 1 of the First Protocol must be read in the light of the principle in the first sentence of the Article. From that sentence, the Court has derived the requirement that an interference must strike a “fair balance” between the demands of the general interest of the community and the requirements of the individual’s fundamental rights (see, inter alia, Sporrong and Lönnroth v. Sweden, 23 September 1982, § 69, Series A no. 52). The concern to achieve this balance is reflected in the structure of Article 1 as a whole, and hence also in the second paragraph. There must be a reasonable relationship between the means employed and the aim pursued (see Tre Traktörer AB, cited above, § 59).

In the instant case the Court first of all notes that the interference did not deprive the applicant company of a possession which it owned, but solely controlled its use in a way which diminished the applicant company’s opportunity to make a substantial profit out of it. The Court does not find that reliance can be placed solely on the applicant company’s view that the land had potential for development. The fact that, when it was purchased, no specific type of development had yet been determined for the land, it being a white area, did not entail any assurance as to its development. On the contrary, the Court considers that the future of the land was evidently in doubt, and there was just as much a chance of it being granted a development permit as of its being eventually classified as a “green area” - as in fact happened - which required its conservation and allowed for no development.

Moreover, the Court observes that the applicant company had the possibility of complaining about this interference within an organised legal framework. Indeed, it appealed to the PAB, and subsequently to the Court of Appeal against the relevant decisions refusing its applications for a permit. The Court of Appeal referred the case to the constitutional jurisdiction which heard the case at two instances. Thus, the Court attaches weight to the existence of procedural and other safeguards which ensured that the operation of the system and its impact on the applicant company was neither arbitrary nor unforeseeable.

Having regard to the foregoing, particularly, the risk taken by the applicant company when it bought the land, the Court considers that the interference cannot be said to have been disproportionate (see, inter alia, Fredin v. Sweden (no. 1), 18 February 1991, § 53, Series A no. 192, and Olbertz v. Germany (dec.), no. 37592/97, ECHR 1999 V). Thus, the Court holds that the respondent State did not go beyond its margin of appreciation and, regard being had to the legitimate aim pursued by the Act, it did not fail to strike a “fair balance” between the applicant company’s economic interests and the general interest of the community at large.

It follows that this complaint is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention.

II. THE COMPLAINT UNDER ARTICLE 14 IN CONJUNCTION WITH ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION

The applicant company further complained that it had been discriminated against contrary to Article 14 of the Convention, as other vital parts of the valley had been developed while its land, situated in an area subject to less protection, had been refused development permits.

The relevant provision reads as follows:

“The enjoyment of the rights and freedoms set forth in [the] Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.”

The Court reiterates that Article 14 complements the other substantive provisions of the Convention and its Protocols. It has no independent existence since it has effect solely in relation to “the enjoyment of the rights and freedoms” safeguarded by those provisions. Although the application of Article 14 does not presuppose a breach of those provisions – and to this extent it is autonomous – there can be no room for its application unless the facts at issue fall within the ambit of one or more of the latter (see Mintoff v. Malta, (dec.), no. 4566/07, 26 June 2007).

Since the facts at issue fall within the ambit of Article 1 of Protocol No. 1, Article 14 is applicable in the instant case.

The Court reiterates that in order for an issue to arise under Article 14 there must be a difference in the treatment of persons in analogous or relevantly similar situations (see D.H. and Others v. the Czech Republic [GC], no. 57325/00, § 175, ECHR 2007-IV, and Burden v. the United Kingdom [GC], no. 13378/05, § 60, ECHR 2008-...). Such a difference in treatment is discriminatory if it has no objective and reasonable justification; in other words, if it does not pursue a legitimate aim or if there is not a reasonable relationship of proportionality between the means employed and the aim sought to be realised (see Carson and Others v. the United Kingdom [GC], no. 42184/05, § 61, ECHR 2010 ....). The Court also points out that the grounds on which those differences of treatment are based are relevant in the context of Article 14. Only differences in treatment based on an identifiable characteristic, or “status”, are capable of amounting to discrimination within the meaning of Article 14 (see O’Donoghue and Others v. the United Kingdom, no. 34848/07, § 101, ECHR 2010 ...).

The Court considers that, even assuming that a private individual, in this case the applicant company, and the State can be considered to be in an analogous position, the use the Government made of the land in the vicinity in order to allow the construction of a road and a social housing estate was clearly in the public interest. The applicant company contended that the road benefited third parties which had substantial financial interests in its development. However, while it cannot be ruled out that the authorities also took into account the interests of third parties, the Court finds no reason to doubt that the use of the road was beneficial to the community at large and pursued the legitimate aim of managing road traffic in a more efficient way (see, mutatis mutandis, Abdilla v. Malta (dec.), no 38244/03, 3 November 2005). Similarly, the Court can accept that a social housing estate pursues a legitimate aim in the general interest.

Thus, in the Court’s view, bearing in mind the State’s margin of appreciation in environmental and country planning matters, the distinctions drawn in respect of the development of the land in the present case can be accepted as objective and reasonable.

It follows that the complaint under Article 14 in conjunction with Article 1 of Protocol No. 1 is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court unanimously

Declares the application inadmissible.

Lawrence Early Nicolas Bratza
Registrar President