EHRM, 16-01-2024, nr. 36318/21

The applicants submitted that at the time that an appeal had to be filed in their case, following the judgment at first instance in January 2021, recourse to the Constitutional Court did not constitute an effective or practical remedy. Although early signs of a change in trend started appearing in late 2020, this did not automatically mean that the concerns related to the ineffectiveness of the Constitutional Court, as confirmed by years of jurisprudence of the Court to this effect, were no longer justified. They considered that, while in more recent judgments delivered by the Constitutional Court in 2021–2022, the latter appeared to have started reversing the trend of rejecting appeals or at worse decreasing the compensation claimed, this was not the existing situation at the time their petition was made. The applicants noted that by the State Advocate's own admission, in 2020, bar two judgments, all were decided in late 2020 (October and November 2020) and therefore by no means could it be alluded that such development had changed the situation to the extent that what otherwise (and for well over a decade) had been deemed to be an ineffective remedy, suddenly became an effective one. In the applicants' view a decade long reputation could not be eradicated by a few sporadic judgments delivered some months before the applicants had to decide on which recourse they would seek.

Moreover, while the six cases dated 2020, relied on by the Government (see paragraph 24 below), indicated that the Constitutional Court had increased the compensation awarded by the first-instance court, in the applicants' view, five of those awards had nevertheless not reflected adequate compensation, in line with the Court's guiding principles established in Cauchi (cited above). The same held in respect of another case (namely, Catherine Tabone pro et noe v. L-Avukat Generali et, Rik. 27/18, 27 March 2020), which the Government mistakenly considered had reduced compensation. In support of this, the applicants' submitted their own calculations, based on the latter guidelines, in respect of those cases. They noted that the guiding principles only started to be followed at the domestic level after the Court's judgment in Cauchi in March 2021, but those judgments were after January 2021 (date relevant to the applicants) and thus could not be of any relevance to the present case.

Furthermore, apart from the issue of compensation, the applicants further referred to the Constitutional Court's continued insistence not to apply an erga omnes effect to a declaration that the rent laws are unconstitutional, as well as its continued insistence not to order eviction even though the declaration of unconstitutionality would so merit.

The Government submitted that constitutional redress proceedings, namely an application before the CCFH as first-instance constitutional jurisdiction and, in particular, an appeal before the Constitutional Court amounted to an effective remedy for the purposes of the applicants' complaint under Article 1 of Protocol No. 1 to the Convention. They noted that, in law, the powers of the courts enjoying constitutional jurisdiction in the domestic legal system were wide and capable of offering any redress which the plaintiff may be entitled to.

In the present case, the applicants had demanded compensation for the violation that subsisted until 2018, and explicitly stated that they were not after the eviction of the tenants. As a result, the CCFH awarded EUR 30,000 which the Government considered adequate compensation. Nevertheless, had they been unhappy with that award, they could have appealed to the Constitutional Court which could have increased that compensation had it been merited. In particular, the Government relied on the Constitutional Court's case-law in 2020 and 2021, which dispelled previous conclusions in that respect.

The Government submitted that between 1 January 2020 and 31 December 2020, the Constitutional Court decided eight appeals by plaintiffs demanding higher compensation in rent law cases and in six1. of them the Constitutional Court had upheld the appeal and increased the compensation. In one other case2. it had confirmed the compensation, and in the other3. it had reduced compensation upholding the State's appeal (sic.). The Constitutional Court also chastised the representative of Government for appealing when the compensation awarded by the FHCC had evidently been in line with jurisprudence. It also, at times, had found that the appeal was frivolous and vexatious and ordered the State to pay double court costs4.. According to the Government, in the same time span there had been eleven other rent cases decided by the Constitutional Court on appeal by the Government. However, those eleven cases were irrelevant as no appeal had been filed by the plaintiffs and therefore the Constitutional Court could not have increased the compensation. Nevertheless, for completeness' sake, of those cases, the Constitutional Court had upheld the State appeal in three cases5., thus reducing the compensation which had been awarded to the applicants at first instance and rejected the State's appeal in the remaining eight cases6..

According to the Government, given that the applicants' case was decided at first instance on 25 January 2021, their appeal would have been decided sometime after and therefore the outcome of the cases in 2021 was also relevant. Limited to the Ordinance at issue in the present case, they referred to three judgments7. whereby the Constitutional Court increased compensation upon an appeal (or cross-appeal) by the plaintiffs. In one case8., where only the State had appealed, the Constitutional Court rejected the appeal and confirmed the compensation awarded at first instance. In four other cases9. (three of which concerning only an appeal by the State) it reduced it, having considered that the amount awarded at first instance had been even higher than that which would have been awarded according to the guidance of the ECtHR in Cauchi (cited above), therefore applying the latter in setting the compensation. The Government further relied on Cuschieri and Others v. Malta ([Committee] dec., no. 36806/21, §§ 4 and 8, 20 September 2022), whereby the Court had held that the Constitutional Court's award increasing compensation, had been adequate.

In relation to the applicants' submissions concerning the adequacy of compensation in the cases delivered in 2020 (see paragraph 20 above), the Government noted that the applicants' calculations had been based on the court-appointed expert reports without any consideration in that regard. However, the valuations provided by the expert reports had to be analysed and assessed, and not merely applied blindly by the national courts as though they constituted incontrovertible evidence of the rent which the owners would have received over the years. Undoubtedly, expert reports are a strong and vital piece of evidence in such proceedings, but they must be scrutinised like all other pieces of evidence. Moreover, according to the guidelines established in Cauchi (cited above, §§ 103-04), deductions had to be made of ‘around 30% on the grounds of that legitimate aim’ [referring to the social protection of tenants] and ‘at least 20%’ on the basis that had the property not been subject to the impugned regime it would not necessarily have been rented out throughout the entire period. Thus, the calculations could not be based on a strict deduction of 50 % on the values established by the experts. Moreover, in at least one of those six cases, the property had been one of a very high standing, and thus according to the Court's case-law (see Galea v. Malta, no. 28712/19, 7 October 2021) the probability of it having been rented out all throughout was less than in the usual cases dealing with standard residential property, thus the percentage reduction could be increased.

As concerns preventing the continuation of the violation, the Government noted that, at the time when the applicants instituted constitutional redress proceedings, the new Article 12B of the Ordinance had already come into force. In fact, the applicants had specifically limited the effects of their case to the date of the introduction of Article 12B in 2018, reserving any future constitutional redress proceedings they could institute to challenge the new remedy. Therefore, the applicants had recognised, at least implicitly, that the new law provided an ordinary remedy that allowed them to either increase the rent being paid or to acquire the eviction of the tenant if the latter did not deserve the protection of the law. In fact, they instituted such ordinary proceedings and as a result acquired a significantly higher future rent (see paragraph 13 above).

Article 13 of the Convention guarantees the availability at national level of a remedy to enforce the substance of the Convention rights and freedoms in whatever form they may happen to be secured in the domestic legal order. The effect of Article 13 is thus to require the provision of a domestic remedy to deal with the substance of an ‘arguable complaint’ under the Convention and to grant appropriate relief (see Kudła v. Poland [GC], no. 30210/96, § 157, ECHR 2000-XI; Centre for Legal Resources on behalf of Valentin Câmpeanu v. Romania [GC], no. 47848/08, § 148, ECHR 2014; N.D. and N.T. v. Spain [GC], nos. 8675/15 and 8697/15, § 240, 13 February 2020; and Mugemangango v. Belgium [GC], no. 310/15, § 130, 10 July 2020).

The scope of the obligation under Article 13 varies depending on the nature of the applicant's complaint. However, the remedy required by Article 13 must be ‘effective’ in practice as well as in law (see, for example, İlhan v. Turkey [GC], no. 22277/93, § 97, ECHR 2000-VII, and Khlaifia and Others v. Italy [GC], no. 16483/12, § 268, 15 December 2016). The ‘effectiveness’ of a ‘remedy’ within the meaning of Article 13 does not depend on the certainty of a favourable outcome for the applicant. Nor does the ‘authority’ referred to in that provision necessarily have to be a judicial authority; but if it is not, its powers and the guarantees which it affords are relevant in determining whether the remedy before it is effective. Also, even if a single remedy does not by itself entirely satisfy the requirements of Article 13, the aggregate of remedies provided for under domestic law may do so (see Kudła, § 157, and Khlaifia and Others, § 268, both cited above).

For the purposes of Article 13, it is for the Court to determine whether the means available to an applicant for raising a complaint are ‘effective’ in the sense either of preventing the alleged violation or its continuation, or of providing adequate redress for any violation that had already occurred (see Kudła, cited above, §§ 157-58). In certain cases, a violation cannot be made good through the mere payment of compensation (see, for example, Apap Bologna v. Malta, no. 46931/12, § 77, 30 August 2016). In the context of Article 13, the Court's role is to determine whether, in the light of the parties' submissions, the proposed remedies constituted effective remedies which were available to the applicant in theory as well as in practice, that is to say, that they were accessible, capable of providing redress and offered reasonable prospects of success (ibid., § 32, and McFarlane v. Ireland [GC], no. 31333/06, § 114, 10 September 2010).

The Court observes that it has repeatedly found, in the context of Maltese cases before it, that constitutional redress proceedings which are an effective remedy in theory are not so in practice in cases concerning rent laws presenting similar problems to the one at issue in the present case. The first time the Court found a violation of Article 13 in relation to this problem was in Apap Bologna (cited above, § 91) in connection with requisition orders. Due to the deficiencies in the redress given by the Constitutional Court the same conclusions, resulting in a violation of Article 13 of the Convention in conjunction with Article 1 of Protocol No. 1 to the Convention, have continued to be reiterated in similar cases concerning several rent laws, in the absence of anything being brought to the Court's attention which could alter those conclusions (see, for example, Marshall and Others v. Malta, no. 79177/16, §§ 76–79, 11 February 2020, in connection with rent laws under Chapter 69 of the Laws of Malta, Cauchi, cited above, § 77, and Galea, cited above, § 63, in connection with the rent laws under the Ordinance at issue in the present case).

The Court has held that the reasons behind those violations are twofold. As explained in Cauchi, cited above, § 53:

In particular in Cauchi (cited above, § 77) the Court held that an appeal to the Constitutional Court could not be considered an effective remedy at the material time relevant to that case, namely the end of 2018. It acknowledged, however, that the situation might be different in 2021, at the time of the delivery of the Cauchi judgment, if the state of domestic practice had evolved accordingly — a matter which was to remain under the Court's supervision (ibid.). The situation pertaining in 2018 persisted in 2019 (see, for example, Pace v. Malta [Committee] no. 53545/19, 29 September 2022, Attard and Others v. Malta, [Committee], no.18593/20, 29 September 2022, and Grima and Others v. Malta [Committee], no. 18052/20, § 8, 7 March 2023).

It is now for the Court to determine whether in the light of the evolution of the domestic case-law in 2020 and thereafter, an appeal to the Constitutional Court could be considered as an effective remedy satisfying the requirements of Article 13, at the time relevant to the present case, without prejudice to the question of exhaustion of domestic remedies concerning the complaint under Article 1 of Protocol No.1 to the Convention, examined below.

The Court notes that the domestic cases relied on by the Government, in relation to 2020, show that the Constitutional Court increased compensation in seven10. of the eight appeals where this was requested. Thus, the Court considers that the case-law relied on by the Government offers a good indication that in 2020 the Constitutional Court abandoned its precedent practice of systemically diminishing compensation awarded at first instance and, as argued by the Government, has started to examine these rent cases on their own merits, paying attention to the facts of each case. The cases related to the year 2021 continued to confirm that trend11.. While it is true that in mid-2021 the Constitutional Court diminished compensation in four judgments (see paragraph 25 above), it did so by applying the Court's guidelines established in Cauchi (cited above), summarised in the Government's submissions at paragraph 26 above. The situation is therefore not comparable to the persistent unreasonable reductions it used to undertake in previous years, which led to multiple violation judgments before this Court. The Court, thus, considers that it can no longer be said that an appeal to the Constitutional Court is not an effective remedy on the basis of that practice, which has been abandoned.

While admitting that the Constitutional Court had started to increase compensation in 2020, the applicants' argued, however, that the awards it made in those cases did not constitute adequate compensation in line with the Court's case-law, and thus could still not be considered an effective remedy.

As to whether adequate financial redress was actually provided by the Constitutional Court in 2020, the Court observes that the compensation terms applied by the Constitutional Court in 2020 were nonetheless not consistently satisfactory. For example, on the same day, 27 March 2020, it upheld the plaintiff's appeal and increased compensation in one judgment, awarding adequate compensation (see Tabone v. Malta, [Committee] (dec.), no. 23107/20, §§10–13, 28 March 2023), while upholding the State's appeal and therefore reducing compensation in two other judgments12., one of which resulting in an inadequate amount of compensation (see Grima v. Malta, [Committee], no. 38660/20, §§ 6 and 9, 22 September 2022) while the other amounting to an adequate amount of compensation (see Psaila v. Malta [Committee], (dec.), no. 33257/20, § 11, 11 July 2023). The next case where compensation was increased by the Constitutional Court is dated 20 July 202013., but again the compensation terms in that case were not adequate (see Cachia and Others v. Malta, [Committee], no. 6335/21, § 9, 24 October 2023). The three cases decided in October 2020, where compensation was increased, have not reached the Court, but in the last case decided by the Constitutional Court in (November) 202014., the latter awarded an adequate amount of compensation (see Deguara Caruana Gatto and Gera v. Malta, (dec.), no. 20064/21, § 35, 23 May 2023).

In these circumstances, the Court considers that while the Constitutional Court judgments of 2020 announced a shift in practice towards awarding adequate compensation, given the lack of uniformity in the judgments throughout the year, it could not be said that there was a clear and unequivocal practice to the effect that the Constitutional Court was effectively awarding adequate compensation, and therefore that it was by 2020, at least on that basis, an already effective remedy (see, mutatis mutandis, Kirinčić and Others v. Croatia, no. 31386/17, § 114, 30 July 2020, see also Savickas v. Lithuania (dec.), no. 66365/09, 12845/10 and 28367/11, § 77, 15 October 2013).

As to the domestic cases relied on by the Government for the year 2021, the Court observes that, unlike for the antecedent period — for reasons unknown to the Court — they were limited only to cases concerning the Ordinance at issue in the present case, and only for the second period of the year, namely May 2021 and thereafter. However, the Government also made reference to Cuschieri and Others (cited above) where the Court had found that sufficient compensation had been awarded by the Constitutional Court in a judgment dated 27 January 2021, whereby it had increased the award made by the first-instance court of EUR 20,000 to EUR 45,000. Indeed, the Court considers the last-mentioned domestic judgment of the Constitutional Court as particularly relevant it being the first pronouncement in that sense for the year 2021. Moreover, albeit not relied on by the Government despite dealing with the same issues under the same Ordinance, cases brought before the Court show that on the same day (27 January 2021), the Constitutional Court deciding cases where an appeal had solely been lodged by the State, rejected the appeal regarding compensation, considering it to be frivolous and vexatious (see, for example, Vassallo and Vincenti v. Malta, [Committee], no. 38111/21, § 4, 24 October 2023).

Furthermore, the domestic cases submitted by the Government indicate that, after the delivery in March 2021 of the Court's judgment in Cauchi, indicating specific guidelines (summarised in the Government's submissions at paragraph 26 above) of what would constitute adequate compensation for violations of Article 1 of Protocol No. 1 such as those at issue in the present case, the Constitutional Court consistently applied those guidelines in its judgments. The applicants were also of that view (see paragraph 20 above). From the parties' submissions, there is therefore nothing suggesting that in 2021 the Constitutional Court was not awarding appropriate compensation, and therefore this is also no longer a reason to consider that it was not an effective remedy.

In so far as the applicants complained that the findings of the Constitutional Court (as to the unconstitutionality of the law and its Convention incompatibility) were not applicable erga omnes, the Court observes that — as questionable as that may be in legal terms and judicial efficiency — this has no effect on whether by means of its judgment the Constitutional Court could provide the applicants' with adequate redress for any violation that had already occurred, nor in respect of preventing the continuation of the violation, which could, for example, be resolved by awarding a higher future rent, or by means of legislative intervention bringing the legislation in line with Article 1 of Protocol No. 1. In connection with the latter, the Court notes that in 2018 certain amendments affected the Ordinance, albeit limitedly (see, for some detail, Cauchi, cited above, § 22) and the Ordinance was again amended in 2021 (see, for some detail, Deguara Caruana Gatto and Gera, cited above, § 38). While the Court has to date not determined whether such legislative changes satisfy the requirements of Article 1 of Protocol No.1, it is not called on to do so in the present case.

Lastly, as to the Constitutional Court's unwillingness to evict the tenants — although not particularly elaborated on by the parties in their submissions — the Court notes the following. For example, in Marshall and Others (cited above, § 75), a situation concerning commercial property under Chapter 69 of the Laws of Malta, where the lease would have anyways expired in 2028, the Court had found that the only remedy capable of giving adequate and speedy redress to the applicants in that situation was for the Constitutional Court to order eviction. In its judgment in the case of Portanier v. Malta (no. 55747/16, § 50, 27 August 2019) in relation to an imposed lease under the Ordinance at issue in the present case, but prior to the 2018 amendments, the Court aired its concerns about the applicants having to undertake a further set of proceedings seeking eviction. Despite those findings, from the multiple rent cases lodged against Malta before it, the Court observes that the Constitutional Court remains adamant in not ordering the eviction of the tenants, particularly concerning cases under the Ordinance at issue in the present case, and this is even more so after the entry into force of the 2018 amendments (see, for example, Cauchi, cited above, § 30, and Cuschieri and Others, cited above, § 9).

Nevertheless, the Court reiterates that, in the event that a higher future rent is put in place, eviction would not always be necessary. Indeed, when the measure did pursue a legitimate aim, such as the social protection of needy tenants, the adaptation of the future rent to present circumstances might be sufficient to repair the existing disproportionality and thus bring the violation to an end (see Portanier, cited above, § 48). Indeed, the domestic case-law shows that the Constitutional Court has considered that the procedures before the RRB under Article 12B introduced by the 2018 amendments were an ordinary remedy to be pursued, which would have allowed both the eviction of the tenant or a higher future rent (see, for example, Deguara Caruana Gatto and Gera, cited above, §§ 15 and 37, and Anastasi and Others [Committee] dec., no. 49102/19 and 2 others, §§ 3–5, 29 September 2022).

The Court observes that in Cauchi (§§ 82–85), on the basis of a limited number of considerations and the material it had before it on that date (early 2021), and without prejudice to any future findings, the Court had found that Article 12B, introduced in 2018, was not designed to deal effectively and meaningfully with the issue of the disproportionate interference arising from the applicable rent laws, which had already been recognised by the domestic courts, and — as the situation stood on that date — it could not be considered an effective remedy following the finding of a violation of Article 1 of Protocol No. 1 by the constitutional jurisdictions.

Since then, as evidenced by a number of applications before the Court, various cases have been decided by the RRB which could give a better picture of the situation. Moreover, the law was amended again in May 2021 with a view to tackle some of the Court's concerns raised in Cauchi (see, for some detail, Deguara Caruana Gatto and Gera, cited above, § 38). Thus, and until the Court is called on to examine that procedure — once it has been undertaken by an applicant and relevant remedies pursued in that respect — it suffices for the Court to hold, for the time being, that a new potentially effective procedure capable of evicting the tenant or putting in place a higher future rent was open to the applicants following a finding by the Constitutional Court (ibid.). Moreover, it is not irrelevant that in the present case the applicants had limited their claims before the constitutional jurisdictions to 2018, and it was therefore that period which the Constitutional Court would have been bound to examine (ibid).

It follows from all the above that, in 2021, the applicants had an available remedy in theory as well as in practice, which was accessible, capable of providing redress and offered reasonable prospects of success for their complaint under Article 1 of Protocol No.1. There has therefore been no violation of Article 13 in conjunction with that provision in the applicants' case.