Owners paid decades late get inflation-linked damages

The Constitutional Court ruled on 11 May 2026 in A.J. vs Avukat Generali, a claim by four heirs whose land was taken by the government in the 1960s. Chief Justice Mark Chetcuti, Mr Justice Anthony Ellul and Madam Justice Josette Demicoli held that once excessive delay in paying expropriation compensation is found, the court must award pecuniary as well as non-pecuniary damages. It ordered the State Advocate to pay the heirs €217,039.

The facts

On 1 August 1961 the Governor declared that a plot of land was needed for a public purpose and would be taken by absolute purchase. In 1965 the Commissioner of Lands offered Lm740, equal to €1,723.74. The owner, the heirs' predecessor, refused and asked instead for compensation at a rate of perpetual ground rent.

A dispute on how to read the Land Acquisition (Public Purposes) Ordinance (Chapter 88 of the Laws of Malta) went to the civil courts, where it ran from 1975 to a Court of Appeal judgment of 15 January 2007. The Land Arbitration Board then fixed compensation at €2,620.54 on 19 November 2014. On 28 June 2019 the Court of Appeal set it at €10,770, the value of the land in 1965.

The heirs received €29,459 on the deed of transfer in 2021. The land had been used to build part of the University of Malta. The heirs filed this case on 3 January 2020.

On 21 November 2023 the First Hall of the Civil Court (Constitutional Jurisdiction) found that the delay breached their right to a hearing within a reasonable time and article 1 of the First Protocol, and awarded €30,000 in non-pecuniary damages. It held that article 37 of the Constitution did not apply, because Chapter 88 was in force before 3 March 1962 and is saved by article 47(9). It found that paying the 1965 value was itself a fair balance and gave no pecuniary damages, and the heirs appealed.

What the court held

The court began by recalling that it is not a court of third instance. The value of €10,770 had been set by the competent forum, so the heirs could not reopen it with their own architect's report. Nor did the retroactive 2004 cap on compensation harm them, since their claim exceeded the value the board's experts found.

The court noted that the European Court of Human Rights takes the market value at the date of the taking as the starting point, and it found no fault with the first court's use of the 1965 value. Delay, however, was a separate matter. On that point the court held:

“Ġaladarba nstab mill-Ewwel Qorti li kien hemm dewmien esaġerat sabiex huma jirċievu l-kumpens għall-art li ġiet esproprjata, l-Ewwel Qorti kellha wkoll takkorda kumpens pekunjarju, minbarra kumpens non-pekunjarju.” (Once the first court found excessive delay in paying compensation for the expropriated land, it should also have awarded pecuniary compensation, besides non-pecuniary compensation.)

Pecuniary damages in a delay case need clear proof of a causal link between the delay and the loss, and the court found that proof here. Following the European Court of Human Rights, it did not use the current value of the land. It took the original figure and adjusted it by the inflation index in the Schedule to the Housing (Decontrol) Ordinance, under article 13 of that law.

The €10,770 of 1965 became €55,021.94 in 2021. With legal interest, worked out as article 66 of the Government Lands Act provides, it reached €246,498. Deducting the €29,459 already paid left €217,039.

The court allowed the appeal and ordered the State Advocate to pay €217,039, with interest from the date of judgment until payment. The rest of the first judgment, including the €30,000 in non-pecuniary damages, stands. The State Advocate pays the costs of the appeal.

Why it matters

An owner who wins a finding of excessive delay in an expropriation should claim pecuniary damages in the same case, not only moral damages. The claim needs proof that the delay caused the loss. The figure is built from the value at the date of taking, indexed for inflation, with interest and less what was paid, not from current market value.

Where it sits

Expropriation cases test article 1 of the First Protocol on three requirements: a legal basis, a legitimate aim and a fair balance, which fails if the owner bears an individual and excessive burden. The court applied the European Court of Human Rights (10 November 2009) on delay and on the date of valuation, and the same court's rulings of 9 July 2013 and 6 October 2014 that use the value at the taking.

On pecuniary damages for delay it relied on its own rulings of 23 June 2025, 27 October 2021, 30 June 2021 and 1 December 2021, and on the European Court of Human Rights (11 February 2020) for the need to prove a causal link. It cited its ruling of 6 February 2015 on the inflation index published under Chapter 158.

Source

Constitutional Court, 1/2020/1, 11 May 2026: 1/2020/1