Recent band club protection law got its first test

In a partial judgement handed down by the Court of Appeal on Tuesday, the court concluded that grounds subsist for the eviction of the Stella Maris Band Club from its rented premises in Sliema due to unauthorised structural changes.

However, in view of the recent changes to the law, which the judgement specifically notes could impinge on the landlords’ fundamental human rights, the Court had to refrain from ordering eviction or otherwise at this stage.

Instead, Judge Anthony Ellul granted the landlords until the end of November to apply for a constitutional remedy before proceeding with the rest of his judgement.

The recent changes to the law were approved by Parliament in July to “safeguard” band clubs from eviction. He had already postponed handing down judgement because the legal amendments came into force three days before the date originally set for judgement.

These legal amendments came about after a separate judgement, also handed down by Judge Ellul in April, which upheld the decision of another court and ordered the De Paule Band Club in Paola to vacate the leased premises over unauthorised structural alterations, finally ending a 20-year legal battle initiated by the owners.

Soon after, Justice Minister Owen Bonnici told The Times of Malta that the government was going to step in and address issues relating to properties leased by band clubs to ensure that the club was not going to lose its premises.

In the case of the Stella Maris Band Club, which leases a prime property in Annunciation Square for €174 per year, the case dates back to 2008 when the owners took the band club owners to court, stating that these had carried out structural changes to the Sliema property without their permission or that of the Planning Authority.

They called on the Rent Regulation Board to authorise them not to renew the rent contract once it had expired and evict the band club.

The band club, whose president is Minister Michael Falzon and which was represented by MP Stefan Zrinzo Azzpoardi, replied saying that all the works were done with the authorisation of the owners and the Planning Authority and that any work carried out was just maintenance.

Last year, the Rent Regulation Board presided over by Magistrate Monica Vella had thrown out the claims made by the landlords, who then filed an appeal.

In his judgement, Judge Ellul noted that the changes made to the building, which included replacing temporary structures with corrugated iron roofing on the roof with one much larger permanent room with a concrete ceiling, building two new toilets also on the roof, and removing part of the spiral staircase (garigor) were in fact structural changes prohibited by the lease agreement.

Re-affirming the Court of Appeal’s prior judgements on this point, Judge Ellul ruled that it is incumbent on the tenant to prove that the landlords gave their consent to structural changes and that the consent of just one of several co-owners is not enough.

The owners became aware that works were being done in September 2007 and, four months later, took photos of a crane removing old beams (xorok) and lifting concrete blocks onto the building.

Later, in May 2008, they refused to collect rent and filed the case against the band club one month later. The works on the building continued without their consent as well as while the case was underway.

Analysing this timeline and noting the absence of express consent, Judge Ellul pointed out that the fact that the owners’ filed the case in a short time period convinced him that they did not tacitly approve the works.

Judge Ellul accordingly held that the tenants should have never made those changes without obtaining the owners’ permission.

As regards the claim that works were not covered by a planning permit, Judge Ellul noted that during the course of proceedings, the tenant band club had obtained an amended planning permit covering the new floor rendering this point moot.

However, the Court harshly criticised the band club and Silvio Falzon, Minister Michael Falzon’s brother, for making a false declaration to the Planning Authority that the band club were the owners of the site (and accordingly that further consent was not needed).

Meanwhile, the new legal amendments came into force which changed the goal posts. These state that a band club can no longer be evicted for structural changes in breach of the lease contract if it provides the landlord with a financial guarantee to restore the structural works upon termination of the lease while making good for any loss that might have taken place when these works were being done.

Since the law applies retrospectively to pending cases or even decided cases, Judge Ellul granted the landlords until the end of November to contest this law which, although eviction is justified, effectively prohibits the court from evicting.

Historically, a number of band clubs benefit from ‘old’ leases which, under laws passed in the 1970s, became automatically renewable in perpetuity, typically for unreasonably low annual rents.

Under that law, which has been repeatedly found by the European Court of Human Rights to be in breach of owners’ human rights, one of the few grounds for eviction of a tenant under a protected lease was breach of contract including a structural alterations clause.

As a result of the new law and subject to some conditions, past or future structural alterations are no longer a ground for eviction of band clubs and they can now continue to use the premises even after a court orders their eviction for such structural alterations.