A retired couple who built their "dream" holiday villa on disputed land in Northern Cyprus face a new legal struggle after their test case was referred to the European Court of Justice.

Top judges in London ruled that the crucial European Union law issues raised by the case of Linda and David Orams can only be resolved by the court in Luxembourg.

Mr and Mrs Orams face claims that, although the northern part of the island has been "occupied" by the Turkish army since 1974, the site where their villa stands still rightly belongs to a Greek Cypriot refugee who was chased off his land by the Turkish invasion.

The couple's case is of vital importance to hundreds of British people, many of them retired, who have made their homes in Northern Cyprus and whose holiday homes will be under grave threat if Greek Cypriot, Meletis Apostolides, wins his case.

Mr and Mrs Orams were jubilant in September last year when top judge, Mr Justice Jack, ruled that judgements obtained against them in Nicosia - which threatened both their sunshine villa and their home in Hill Drive, Hove - are not enforceable in the English courts.

The couple's lawyers had described the High Court ruling as a "total vindication".

However, Mr Apostolides, whose family owned the former lemon grove on which the villa stands prior to the Turkish invasion and effective partition of the island, is now set to argue his case before the European Court of Justice in a process which could take months, if not years.

The Lord Chief Justice, Lord Phillips, and two senior colleagues accepted Mr Apostolides' plea that no English court could resolve the case with certainty and that could only be done in Luxembourg.

Mr and Mrs Orams paid £50,000 for the land once owned by Mr Apostolides, and spent another £160,000 on constructing their luxury villa, complete with swimming pool.

The retired couple bought the land from a Northern Cypriot, but Mr Apostolides - whose first approaches to the Orams had been friendly - last year won judgements from a Nicosia court, proclaiming him the land's true owner.

The ruling left the British couple facing up to paying Mr Apostolides substantial compensation or demolishing their dream home and returning the land to him.

Cherie Booth QC, for Mr and Mrs Orams, had argued that Mr Justice Jack's ruling last year was entirely right and the threat hanging over the couple's land should be lifted.

In her written arguments, she said: "This case raises a matter of fundamental importance not just for Mr and Mrs Orams, but for the people who live in 'Turkish Republic of Northern Cyprus' (TRNC) and indeed for the whole island of Cyprus in relation to property dealings."

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