Finding an A1P1 breach ends the tenant's rent-law protection

The Constitutional Court, composed of Chief Justice Mark Chetcuti, Mr Justice Anthony Ellul and Mr Justice Robert G. Mangion, decided on 15 June 2026 three appeals from a First Hall judgment of 12 March 2024 on a protected commercial lease in St Julian's.

It held that the landlord company's right under Article 1 of the First Protocol was breached only from the day it bought the shop, not from an earlier date on which a related company had acquired shares in the previous owner. It also held that, once such a breach is found, the court must order that the tenant can no longer rely on the laws forcing renewal until 2028, and it reduced the pecuniary damages to €83,210.

The facts

The shop has been let since 1965 to a tenant who runs his business from it, at a rent that today amounts to €154 a year. In 2003 a company in the same family group as the applicant bought almost all the shares in the company that then owned the shop.

In December 2014 Central Business Centres plc bought the shop with several adjoining properties for a global price of €2,000,000, the deed recording that the purchaser accepted the properties as leased. Negotiations with the tenants for a redevelopment failed. In 2020 the company asked the First Hall to declare that articles 3, 4, 5 and 9 of Chapter 69 breached its rights.

The First Hall found a breach between 2003 and 2021, refused eviction, and ordered the State Advocate to pay €166,000 in pecuniary and €500 in non-pecuniary damages; the tenant, the State Advocate and the company all appealed.

What the court held

The court first corrects the starting date. A company has a juridical personality distinct from its members under article 4(4) of the Companies Act (Chapter 386), so the company that bought the shop in 2014 cannot claim a breach suffered by a different company that owned it in 2003. The breach runs from 23 December 2014.

It then rejects the argument that a purchaser who knew of the protected lease is not a victim. Article 4(1) of Chapter 319 opens the action to any person who alleges that a fundamental right has been, is being or is likely to be breached in relation to it, and a limited company is a person for that purpose. Knowledge of the lease is not enough to exclude victim status.

The court distinguishes its own line of cases, among them Danel Company Limited v. L-Avukat tal-Istat et (Constitutional Court, 12 July 2023) and 44 Main Street Limited v. L-Avukat tal-Istat et (Constitutional Court, 25 October 2023), where the purchaser had paid a fraction of the open-market value and could not, within a short period, complain of a breach.

Here the shop was bought in a bundle at a global price, and no evidence was produced of what it cost against its 2014 market value. Without that proof the objection fails.

The tenant's argument that articles 1531D and 1531I of the Civil Code had since restored the balance is dismissed. Those articles date from Act X of 2009 and predate the case, and the court has held repeatedly that the 5% annual increases and the end of protection on 1 June 2028 do not create the balance required. The inquiry is not whether the law balances landlord against tenant but whether it balances the landlord against the general interest.

On remedy the court upholds the company's cross-appeal: «ġaladarba l-qorti ssib li kirja kummerċjali hija leżiva tal-jeddijiet fundamentali ta' sid il-kera, l-qorti tkun qed tonqos jekk bħala parti mir-rimedju ma tipprovdix sabiex il-ksur jiġi fi tmiemu» [once the court finds that a commercial lease breaches the landlord's fundamental rights, it fails in its duty if it does not, as part of the remedy, provide for the breach to end].

Following its judgment between the same landlord and the State Advocate of 6 October 2025, it declares that the tenant may no longer rely on the laws that oblige the landlord to renew until 31 May 2028 at a rent rising only as article 1531D provides.

On quantum, the reduction for the social aim of the law is set at 20% rather than 35%, because that aim is far less pronounced in a commercial lease (Constitutional Court, 27 October 2021). The cost the company incurred to build around the occupied shop is not the State's responsibility, which stops at the loss of a reasonable rent. Pecuniary damages for 2015 to 2021 are liquidated at €83,210; the €500 for non-pecuniary damage stands.

Why it matters

A landlord who bought a protected commercial lease should expect the State to plead the good-bargain line of cases and should hold evidence of the price paid against market value at the date of purchase; a bundle purchase leaves that gap unproven and the objection fails.

The breach period starts at the deed, not at an earlier acquisition by a related company. A constitutional application on a commercial lease should ask for a declaration that the tenant can no longer rely on Chapter 69 and article 1531I, not only for compensation.

Where it sits

The case applies the three rules of Article 1 of the First Protocol: peaceful enjoyment, deprivation only in the public interest and subject to law, and the State's power to control the use of property in the general interest.

Standing follows article 4(1) of Chapter 319 and the autonomous notion of victim under article 34 of the Convention, for which the court cites its judgment of 26 January 2024 on the Committee for Judicial Appointments and a judgment of the European Court of Human Rights against Spain (28 April 2004).

The good-bargain exception rests on the Danel and 44 Main Street judgments above and on Seaview and Sons Ltd v. L-Avukat tal-Istat et (Constitutional Court, 16 March 2026). The remedy follows Central Business Centre plc v. Avukat tal-Istat et (Constitutional Court, 6 October 2025), which distinguished the residential mechanism considered by the European Court of Human Rights in a judgment against Malta (30 January 2018) from the commercial increase under article 1531D.

Source

Constitutional Court, 132/2020/1, 15 June 2026: 132/2020/1