The Lands Arbitration Board must have a valid valuation before it comes to its decision on compensation for land expropriated by the government. This was held by the Court of Appeal in its judgement delivered on 28 April 2026 in Angcar Company Limited vs Lands Authority. The court was presided by Chief Justice Mark Chetcuti and judges Robert Mangion and Simone Grech.
The appeal followed a decision given by the Lands Arbitration Board where the Lands Authority was ordered to pay the company €65,672 for the expropriation of two pieces of land. It ordered that damages be paid. It calculated that the real damages amounted to €16,732 and also awarded €2,300 in moral damages.
In 1984, the applicant company purchased land in Marsaxlokk, part of which was occupied by the government to widen a road. An architect valued the property at €250,000.
The company asked the board to decide whether the government took the land for public purposes and to order the Lands Authority to pay it compensation.
The Lands Authority replied by requesting evidence that the company owned the land. The authority did not agree that it should pay damages because no formal request for compensation was filed.
The board did decide that the company was the owner of the land that was taken for a public purpose. The board also ordered the authority to declare how much compensation it would pay within two months. In September 2025, the board ordered that €55,800 and €9,872 be paid as compensation, while €14,216 and €2,515 and €2,300 be paid as damages.
The appeal concerned the fixation of compensation for two parcels of land expropriated by the authority. The board was required to determine the market value of the land as at the date the appeal was filed and to fix compensation within the statutory bounds set by the Government Lands Act. The board entered into the statutory framework and explained that Article 67(6) the Government Lands Act directs that compensation be determined on the basis of “the amount which the land would fetch if sold on the market by its owner voluntarily” and provides that the board’s award “shall not be higher than that indicated by the owner nor less than that indicated by the authority.” Article 79(3) Government Lands Act (Cap. 573) requires that an expert report include references to comparable transactions. Adjustments to historic prices must be also be affected in accordance with the appropriate indices.
The board noted the relevance of the inflation index under Housing (Decontrol) Ordinance, although the authority’s expert used the Central Bank Property Price Index.
The board accepted the authority’s own expert, Perit Edric Micallef. Micallef relied on two comparable transactions: A private sale on 8 January 2021 of a 344.72sq.m property located approximately 150 metres from the site under scrutiny, which was sold for €480,000; and a Government Gazette expropriation declaration of 23 March 2017 concerning 1,064sq.m adjoining the subject land, with compensation of €290,000. Micallef updated both comparables to 2022 values, applied adjustments and averaged the resultant rates to arrive at €429 per square metre for 2022.
The board compared these figures with earlier jurisprudence, notably Pierre Chircop vs Lands Authority, in which compensation of €511 per square metre (2018) was awarded for land scheduled for semi‑detached villas. However, the board found that the Pierre Chircop rate was inapplicable because the land was not scheduled for development of semi‑detached villas and commercial/physical characteristics differed; accordingly, a lower rate than that in Pierre Chircop was appropriate.
The board then dealt with the real damages claim. In accordance to Article 67(8) Chapter 573 of the laws of Malta, the Board may liquidate and order payment of material and moral damages suffered by the owner for the period in which the land was occupied without the declaration. The board relied on the Court of Appeal’s decision in Elizabeth Agius et vs Lands Authority of 25 April 2024, which confirms that material damages in the form of loss of profits are due where title had not passed to the government—where the government had taken physical possession prior to the declarations and title transfer. The board applied that principle, since possession was taken before 23 March 2023 and title only passed by the declarations of that date.
Having regard to the authorities and the circumstances that the subject land was taken to form a road, the board considered a 1% rate too low and accepted the claimants’ submission for a 1.5% locational value rate. Material damages were to be calculated from the year 2000 (the year the land was taken for the Triq il‑Kavallerizza widening) through to 2023 (the date of the declarations). The board ordered a 20% reduction on the final amount to reflect uncertainty as to whether the land would have been leased for the entire period.
Applying the 1.5% rate for the relevant period, and after applying the 20% uncertainty reduction, the board liquidated material damages to €14,216 for Plot 1 and €2,515 for Plot 2.
The company appealed since the board did not consider the valuation of the technical members. The Court of Appeal held that Article 79 of the Government Lands Act stipulates when a valuation is required this valuation must be done according to law. If this is not done, the valuation is not valid and a new one must be done. A list of requirements is given by the act. The court compared this with an old law which held that a valuation must include a comparable valuation and the technical members should do their best to carry out this comparison exercise. Although this is not copied in the Government Lands Act, this does not mean that the technical members should not use comparable criteria in their valuations.
The board raised the issue that the comparative exercise carried out by the technical members was not satisfactory. When a comparison is carried out it must include all the elements and not the final value. Therefore, the question arose as to whether the board could decide without a technical report. The answer was no. The law binds the board to have a valid technical report and since this was not available the board should have postponed the decision and order a new report. The board is not bound by a valid technical report, but nonetheless, a valid report must exist.
As a consequence, the Court of Appeal upheld this ground of appeal and ordered that the records of the case be remitted to the board to decide on the real damages.
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