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The Housing (Decontrol) Ordinance of 1959 and its Unconstitutionality

The Housing (Decontrol) Ordinance of 1959 has been the subject of debate for its infamous legal provisions for the past years, so much so that its provisions, specifically article 12, have been repeatedly declared to be in violation of fundamental human rights by both the Constitutional Court and the European Court of Human Rights. Notwithstanding such consistent declaration of finding of breach, the rental laws in question remain in effect to this present day.

It is pertinent to understand the context in which these rental laws were initially enacted. Following the devastation left behind by the Second World War, Malta faced an unprecedented socio-economic crisis in the housing sphere resulting in situations of homelessness across the island. Hence, various incentives were introduced to safeguard tenants, including by introducing new laws, most particularly the Rent Restriction (Dwelling Houses) Ordinance of 1944 and the above-mentioned Housing (Decontrol) Ordinance of 1959. The latter seemed to be more favourable to property owners since, in comparison with the Rent Restriction (Dwelling Houses) Ordinance of 1949, it was considered to be less stringent than its respective counterpart. Thus, the preferred method of transfer of immovable property was by means of emphyteusis as both the Rent Restriction (Dwelling Houses) Ordinance of 1944 and the Housing (Decontrol) Ordinance 1959 did not provide for restrictions on such title.

However, in 1979 the Ordinance was amended with the intention of addressing the loophole exploited by most property owners over the years. By means of the said amendments, tenants who, after the expiry of the temporary emphyteusis agreement were Maltese citizens and occupied tenements as their ordinary residence, could remain in occupation of the tenement under a new title of lease. This created a unilateral security for the lessee and in turn forced a legal relationship between the parties. Consequently, such amendments thus completely disregarded the general principle of pacta sunt servanda to the detriment of the landlord. The owner of the property was prohibited from declining to renew, increase the rent or impose any new conditions on this newly created lease. This created a situation where, apart from impeding the landlord from receiving rent according to market value, it was nearly impossible for the landlord to ever recover possession of his property.

Eventually and in light of the property market boom in Malta, an influx of property owners sought constitutional redress on the basis of deprivation of property without compensation in terms of article 37 of the Constitution and article 1 of protocol 1 of the European Convention on Human Rights. However and even though the Constitutional Court has declared that the Housing (Decontrol) Ordinance violated human rights, article 12 has not yet been declared null and void.

The supremacy of the Constitution of Malta is very well established in article 6 of the Constitution which states that “if any other law is inconsistent with this Constitution, this Constitution shall prevail and the other law shall, to the extent of the inconsistency, be void”. From this provision of law, it is fair to establish that if the afore-mentioned rent laws are considered to be unconstitutional, the Constitution should prevail bringing about the abrogation of the specific law in question.

In fact, following a judgement declaring a provision of law to run counter to the Constitution or to any human right or fundamental freedom as contemplated in the Convention, the registrar of the courts is bound to send a copy of such judgment to the Speaker of the House of Representatives, who in turn shall inform the House on the findings of such decision.

Contrary to common belief, the Constitutional Court does not have the power to abrogate laws after having declared them to be unconstitutional. In turn, the power to abrogate laws falls within the powers of the Prime Minister, however this power is only optional. In its interpretation, the Constitutional Court in ‘Balzan Angela sive Gina vs L-Onorevoli Prim Ministru et’ decided on the 8th October 2020, held that “il-qorti ma hijiex “tħassar” liġi; qiegħda tgħid biss illi hija “bla effett”, kif jgħidu u jridu l-art. 6 tal-Kostituzzjoni u l-art. 3(2) tal-Att dwar il-Konvenzjoni Ewropea. Dan ma huwiex inkompatibbli mas-setgħa tal-Prim’ Ministru taħt l-art. 242(2) tal-Kodiċi ta’ Organizzazzjoni u Proċedura Ċivili li “jħassar” dik il-liġi għax b’regolament taħt l-art. 242(2) it-tħassir iseħħ erga omnes u mhux biss inter partes, kif tkun id-dikjarazzjoni ta’ ineffikaċja mogħtija f’sentenza. Il-fatt illi għadu ma sarx regolament mill-Prim’ Ministru taħt l-art. 242(2) tal-Kodiċi biex iħassar il-liġi safejn inkonsistenti mad-drittijiet fondamentali jista’ jolqot il-posizzjoni legali ta’ terzi iżda mhux tal-partijiet fil-kawża”.

Notwithstanding the above, Malta has failed to ensure the abrogation of such laws to limit further violations. According to article 46 of the European Convention on Human Rights, judgments from the European Court of Human Rights are binding on member states and are bound to be executed accordingly. Therefore, Malta has an obligation under European Union law to amend laws accordingly and ensure that no further violation takes place.

In view of Malta’s default, the Parliamentary Assembly of the Council of Europe requested a legal opinion on proposed legislative changes, including the rental laws in question. The Venice Commission’s delegation is uncertain as to the reasons why the erga omnes principle vis-a-vis the effects of judgments of the Constitutional Court is not enriched in the Maltese legal system, and why the unconstitutional laws are still in effect today.

The erga omnes effect in the context of judgements relates to the applicability of the judgement in question without any distinction including those who were not involved in that specific legal dispute. As stated above, this principle is not applicable to Maltese law as has been confirmed in ‘John Bugeja vs Il-Provincjal Reverend u Alfred Calleja OFM Conv. et’ by the Constitutional Court where it stated that: “minkejja li s-sentenzi tal-qrati tagħna għandhom l-auctoritas rerum similiter iudicatarum, jibqa’ l-fatt li s-sentenza ċitata mir-rikorrenti għandu jkollha l-effett inter partes u mhux erga omnes”.

Therefore, a decision of the Constitutional Court declaring a legal provision to be unconstitutional does not render a legal provision null and void. The inability of creating a direct effect has resulted in a number of repetitive cases seeking the same redress, most notably compensation for breach of human rights on the basis of fair and adequate rent.

The Venice Commission has recommended that the Constitution be amended to ensure that there are no lacunas in the system. These recommendations provide that the Constitutional Court’s finding of unconstitutionality will directly result in the annulment of the laws in question without intervention by Parliament. The Commission also recommends a time-limit within which the House of Representative are to make the necessary amendments, or possibly abrogate laws in order to comply with the decisions of the Constitutional Court.

Should you require further information or assistance in relation to the above, please do not hesitate to contact us on info@dfadvocates.com

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