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Furious political row over rent control case

The Court of Appeal judgement which found that a 2013 amendment to housing legislation was “unconstitutional” last night sparked a furious political row, drawing stinging criticism from the Opposition over the Government’s handling of the matter and a stern rebuke from No.6 Convent Place.

At the heart of the clash was the government’s handling of a 2013 law that extended the rent control regime to a wider but limited number of tenancies in Matilde Francis Building, including a property rented by the then Housing Minister, Paul Balban.

It reduced rents of these few tenants from £500 to between £100 and £150 per month, a reduction of about 70%, although Mr Balban voluntarily continued to pay at the higher rate and excluded himself from the entire legislative process at the time.

Yesterday the GSD said the judgement showed that the Chief Minister, Fabian Picardo “misinformed Parliament” in the 2013 debate that approved the change in the law.

It referred to some of the findings in the judgment which were critical of the way in which Mr Picardo had presented the Bill in Parliament, including that had not explained the policy reason for the change or set out its practical effect as would be required under “transparent democratic practice”.

The GSD acknowledged is had voted in support of the amendment in Parliament, but said yesterday that it had done so based on Mr Picardo’s explanations of it at the time.

“It transpires that these were inaccurate, fell short of clarification and [were] lacking in sufficient debate,” the GSD said.

“While Mr Paul Balban appears properly not to have sought to take the benefit of this measure, it calls into question why the Government thought it was wise to proceed with it when it could expose itself to the very criticism that the Court of Appeal has now made to the effect that ‘It is worrying that one of the limited class of people who could benefit from this windfall was the Minister for Housing’.”

“This is pertinent when the amended law reverses the earlier decision of the Supreme Court against Mr Balban, on an Appeal from the Rent Tribunal, by which he had sought, in 2008 - before he was a Minister - to have the rent of his flat reduced to a controlled fixed rent.”

“These matters are at their core about good government and as to how the Government should exercise its powers.”

In hitting back yesterday evening, the Government said the GSD’s statement was a “remarkably foolish illustration of the party's intellectual decline”.
“It is incredible that the GSD are now suggesting that their members - each of whom is paid almost £40,000 a year - did not check the law being amended and did no homework in deciding how to vote. That is a stunning indictment of them,” No.6 Convent Place said.

“The then seven members of the GSD in Parliament cost the taxpayer almost £300,000.00 per year and it appears that they do not even bother to work out what the laws they are voting for or against relate to.”

According to Hansard, on the day the Bill was presented three GSD MPs were absent from the debate and therefore did not participate in the vote on the amendment.
The record also shows that Mr Picardo made clear Paul Balban, then the Housing Minister, was not presenting the Bill himself or voting on it because he was an affected tenant.
Hansard also shows that no questions were asked by the Opposition MPs after Mr Picardo presented the Bill, which was approved unanimously.

Yesterday, No.6 added that one of the members of the GSD who voted in favour of the amendment at the time, Damon Bossino, is a partner of TSN, the law firm that represented the Government before the Court of Appeal and defended, albeit unsuccessfully, the legality of the 2013 amendment to the Housing Act.
The Government further flagged that the current leader of the GSD, Keith Azopardi, is also a partner of the same Chambers.

The Government reiterated that it had changed the law to defend the interests of tenants in the face of landlords who were trying to increase rents by a factor of up to 400%, adding that the GSD was now saying it would have sided with the landlords “if they had done their homework”.

No.6 said it was finalising an appeal to the Privy Council of the appeal decision and said it had received support for this from “a large number” of tenants of the Matilde Francis Building.
“I believe we did the right thing to legislate to protect the tenants of Francis Flats from the huge increases in rents proposed by landlords,” Mr Picardo said, adding he had “properly explained” the measure in Parliament at the time.

“We defended the measure against the landlords in the Supreme Court and we won,” he said.

“At appeal we have lost and we respect the court’s findings, as is proper and necessary in a jurisdiction respectful of the rule of law and with important divisions between the legislature, the executive and the judiciary.”

“We will exercise our right of appeal to defend the obvious social policy we were, and are promoting, namely the defence of the tenants against landlords.”
“But with this last statement the GSD show who they really are, who they really stand by when the chips are down and how little work they do for the £300,000.00 per year they cost this community.”
“That party really has had its day. We will continue to instruct Mr Azopardi and Mr Bossino's firm to defend our actions in the Privy Council.”

But there was more to come from the Opposition bench, from where Independent MP Marlene Hassan Nahon took aim at both the Government and the GSD.

Ms Hassan Nahon said the case raised “serious concerns about certain governmental practices” but also about the quality of Gibraltar’s parliamentary checks and balances.

“As per the court’s ruling, this legislation was passed without explaining its real intentions, without plausible justification for these intentions, without mention to social policy or the general public good and without openly disclosing the practical consequences of the amendment,” Ms Hassan Nahon said.

“If the government´s real intentions were, once again, buried under a heap of misguiding legalistic jargon, then it is either a case of incompetence or one of dishonesty.”

Either way, she said, it was a serious issue and one that should not be dealt “in the usual haughty, dismissive terms”.

“The fact that Mr Balban, once a minster, chose to pay the higher rate despite having sought this amendment before being a minster, hardly remedies the corollaries of this issue,” she said.
“Neither does the fact that he communicated his conflict of interest while this misguiding piece of legislation was being discussed.”

“We cannot depend on voluntary acts of good will to stop bad practices from happening. These must be enshrined in law and enforced at all levels.”

With regards to the role of the Opposition she said: “So much for the benefits of having a ruling ‘barristocracy’ when unsound, unjustified and deliberately vague legislation slips right under the nose of reputed lawyers and QC's, of which there were four out of seven in Opposition at the time.”

“Surely a degree of self-criticism is in order for having voted in favour of a law with such flagrant inconsistencies.”

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