CASE OF ELIA SRL v. ITALY
Violation of P1-1;Just satisfaction reserved
Christos Rozakis
8. Since 1967 the applicant company has owned approximately 65,000 square metres of land in the municipality of Pomezia, entered in the Land Register as folio 11, parcel 66. In 1963 the Pomezia District Council had given its approval for a building project to be carried out on the land. 9. On 29 December 1967 the Pomezia District Council resolved to adopt a general development plan (piano regolatore generale – “GDP”). 10. On 20 November 1974 the Lazio Regional Council approved the GDP for Pomezia, which set aside the applicant company’s land for the creation of a public park (parco pubblico) and, consequently, imposed an absolute prohibition on building on the land with a view to its expropriation. 11. Pursuant to section 2 of Law no. 1187/1968, the prohibition on building imposed by the GDP lapsed in 1979, no detailed development plan having been adopted in the intervening five years. 12. Despite the fact that the prohibition on building had lapsed, the applicant company’s land did not revert to its original use. 13. Pending a decision by the Pomezia District Council on its future use, the land was subject to the regulations in section 4 of Law no. 10/1977, a provision which the courts had held to apply in situations of that kind (see paragraphs 38-40 below), and, from 1990, to the regulations in Law no. 86 of the Lazio Region. 14. The applicant company’s land was consequently affected by the building restrictions deriving from the application of these laws. 15. On 12 March 1987 the applicant company asked the Pomezia District Council to determine the use to which the land was to be put. No action was taken on this request. 16. In view of the District Council’s failure to reply, which amounted to a refusal, the applicant company appealed to the Regional Administrative Court (“the RAC”). It argued, firstly, that the District Council was under an obligation to determine the intended use of the land and that its inaction was unlawful. It also sought to have the land designated as building land by the authorities. 17. In a decision of 16 October 1989 the Lazio RAC allowed the applicant company’s appeal in so far as it acknowledged that the Pomezia District Council’s inaction was unlawful. 18. The court held that the prohibition on building imposed in 1974 had ceased to be effective after five years, pursuant to Law no. 1187/1968, because the Pomezia District Council had not adopted a detailed development plan. Since then, the applicant company’s land had been subject to the regulations in Law no. 10/1977. The court considered, however, that the building restrictions deriving from the application of that Law could not take the place of an actual decision by the administrative authorities as to the intended use of the land; the authorities were consequently under an obligation to revise the land-use plan (ricostituzione della disciplina urbanistica), and their inaction was unlawful. However, the District Council remained entirely at liberty to determine the use to which the land in issue should be put; the RAC was not empowered to direct that the land should be given a particular designation. 19. In conclusion, the RAC ordered the administrative authorities to give a fresh decision as to the intended use of the applicant company’s land. 20. The Pomezia District Council appealed against that decision. 21. In a decision of 28 February 1992 the Consiglio di Stato dismissed the Pomezia District Council’s appeal and upheld the impugned decision. 22. On 10 September 1992, in view of the failure of the Pomezia District Council to comply with the Consiglio di Stato’s judgment, the applicant company requested the District Council to adopt a decision on the land. It also proposed a solution whereby if the District Council designated 15,000 square metres as building land, the applicant company would assign the rest of the land to the municipality free of charge. No action was taken on this proposal. 23. In a decision of 25 October 1995 the Pomezia District Council resolved to adopt a detailed development plan and again imposed an absolute prohibition on building on the applicant company’s land with a view to its expropriation. The District Council set the land aside for public use. 24. The applicant company appealed against that decision to the regional committee for supervision of measures taken by municipal authorities (CORECO), seeking to have the District Council’s decision overturned. It argued that the indications given as to the intended use of the land were too vague and that the conditions for renewing the prohibition on building, such as that of public interest, were not satisfied. The outcome of the appeal is not known. 25. It appears from the expert opinion produced by the applicant company that the detailed development plan imposing a prohibition on building on the land was adopted on 22 March 1999. 26. Article 42 §§ 2 and 3 of the Italian Constitution provides: “Private ownership shall be guaranteed and recognised by the law, which shall determine the manner by which it may be acquired and enjoyed, and its limits, in order to safeguard its social function and to make it accessible to all. Private property may be expropriated in cases provided for by law, and subject to payment of compensation, on grounds of public interest.” The Town Planning Act (Law no. 1150/1942, as amended) lays down rules governing town planning and confers on municipal authorities the power to adopt development plans, which must cover the entire territory of the municipality. 27. The GDP is valid indefinitely. The procedure for adopting a GDP begins with a resolution (delibera di adozione) by the municipal council, followed by a period during which all decisions on applications for planning permission that might conflict with the implementation of the GDP are deferred (Law no. 1902/1952, as amended). Approval of the GDP is the responsibility of the regional authorities (Article 1 of Presidential Decree no. 8/1972 and Articles 79 and 80 of Presidential Decree no. 616/1977), having previously been given by decree of the Italian President. Once the GDP has been approved, it is published in the Official Gazette (Gazzetta Ufficiale) and deposited at the town hall. 28. Where a GDP contains precise details of land use, it may be implemented without further formalities; frequently, however, an additional measure is required. The measure may be initiated by the public authorities, as in the case of a detailed development plan (piano particolareggiato), which, by contrast, is valid for a specified period only. Following the adoption of the detailed plan (which is equivalent to a declaration that land is required for public purposes), the authorities have a strict time-limit (not exceeding ten years, as provided in section 16 of the Town Planning Act) for carrying out any expropriations and, in any event, implementing the plan, failing which it ceases to be effective. Where the GDP requires a detailed development plan for its implementation, it is for the district council to adopt one. However, no strict time-limits are prescribed for the adoption of a detailed plan. 29. Restrictions on the right to dispose of property, such as a prohibition on building, are imposed when a development plan is adopted. A prohibition on building may be imposed with a view to expropriation (vincolo preordinato all’esproprio) where the land in question has been set aside for public use or for the construction of buildings or public amenities (section 7(3) and (4) of the Town Planning Act). 30. The Town Planning Act, as originally worded, provided that restrictions imposed by a general development plan on the property rights of private persons, such as prohibitions on building, were valid for the same length of time as the general development plan, that is to say indefinitely; at the same time, no compensation was payable to the owners (section 40). 31. The Constitutional Court was asked to determine whether a prohibition which severely restricted the right of property – such as an expropriation order (vincolo espropriativo) or a prohibition on building (vincolo di inedificabilità) – and could be extended indefinitely without any form of compensation was compatible with the right of property. 32. In judgments delivered between 1966 and 1968 (see, in particular, judgment no. 6/1966 and judgment no. 55 of 29 May 1968) the Constitutional Court reached a negative conclusion and declared the Town Planning Act unconstitutional inasmuch as it provided for the indefinite extension of severe restrictions on the right of property, such as a prohibition on building or a prohibition with a view to expropriation, without any compensation being payable. 33. The Constitutional Court pointed out that restrictions could be imposed by law on the property rights of private persons, provided that they did not render those rights devoid of any substance. Furthermore, the right to build was to be seen as an inherent aspect of the right of property and could be restricted only on specific and tangible public-interest grounds. In the event of expropriation or of restrictions of indefinite duration affecting the very substance of the right of property (such as a prohibition on building), the owner was entitled to compensation. However, no compensation was payable where a prohibition on building was imposed for a limited period only. 34. In the light of those judgments, in which the Constitutional Court laid down the principles applicable where severe restrictions were imposed on the right of property, the legislature had two alternatives: to opt for prohibitions of limited duration without compensation, or to opt for prohibitions of indefinite duration with immediate payment of compensation. 35. The Italian parliament responded to the judgments by choosing the former option and enacting, on 19 November 1968, Law no. 1187/1968 amending the Town Planning Act. By section 2(1) of the Law, when adopting a general development plan, local authorities may impose prohibitions with a view to expropriation and general prohibitions on building in respect of land owned by private persons. However, such restrictions cease to be effective after five years if the land has not been expropriated or if no measures have been taken to implement the general development plan, such as the adoption of a detailed development plan. 36. Section 2(2) of Law no. 1187/1968 also provided for a five-year extension, by force of law, of the deadlines laid down in development plans approved before the Law’s entry into force. Laws nos. 756/1973 and 696/1975 and Legislative Decree no. 781 of 26 November 1976 extended those deadlines until the entry into force of Law no. 10/1977 (provisions governing the right to build). 37. In judgment no. 92/1982 the Constitutional Court clarified the scope of Law no. 10/1977, stating that, even after the Law’s entry into force, the right to build remained an inherent aspect of the right of property. As regards prohibitions on building, the court held that they were still subject to the provisions of Law no. 1187/1968; that is to say, their validity could not extend beyond five years if no detailed development plan was adopted. 38. According to legal precedent, where a prohibition on building lapses pursuant to section 2(1) of Law no. 1187/1968 at the end of the five-year period, the land concerned does not automatically revert to the use for which it was originally intended and is not automatically assigned the use for which the adjacent land is intended. In order to determine the intended use of the land, a positive measure such as a detailed development plan is required on the part of the administrative authorities. Pending such a measure, the land in question is regarded, according to legal precedent, as being subject to the regulations in section 4 of Law no. 10/1977, which apply to land in municipalities that have not adopted general development plans (see the case-law of the Consiglio di Stato, in particular judgments nos. 7/1984 and 10/1984 of the full court). By section 4 of Law no. 10/1977, planning permission may be granted when certain conditions are satisfied, and only if the land is situated away from a built-up area and the volume of the projected building is very small. If the land is situated within a built-up area, no new building work is allowed. 39. The Lazio Region incorporated the case-law referred to above into Law no. 86 of 24 November 1990, which provides explicitly for an absolute prohibition on building where the intended use of land situated within a built-up area has not been determined. 40. When a prohibition on building lapses, it is for the municipal council to determine promptly the use of the land concerned; however, no time-limits are laid down. 41. Inaction on the part of the authorities may form a basis for a complaint to the administrative courts (see the judgment of the Consiglio di Stato, Section IV, 20 May 1996, no. 664). The administrative courts may order the municipal authorities to determine the use to which the land is to be put, although the courts are not empowered to take such a decision in place of the relevant authorities. In judgment no. 67/1990, which concerned an expropriation case in which the authorities were accused of inaction, the Constitutional Court held that the remedy by which inaction on the part of the authorities could be challenged in the administrative court was inoperative and thus of limited effectiveness (defatigante e non conclusivo con conseguente scarsa efficacia). 42. The Constitutional Court has been called upon to determine whether subjecting land to the regulations in section 4 of Law no. 10/1977 is compatible with the Constitution, seeing that those regulations give rise to an indefinite prohibition on building – on account of the authorities’ failure to determine the future use of the land (for example, by adopting a development plan) – and make no provision for compensation. In judgment no. 185/1993 the Constitutional Court declared the question inadmissible, holding that the legislature alone was responsible for taking swift and appropriate action to remedy the situation. 43. In judgment no. 575/1989 the Constitutional Court held that, when the five-year period laid down in section 2 of Law no. 1187/1968 expired and a new development plan was necessary, the local authorities were entitled to extend a prohibition on building on public-interest grounds. This judgment therefore acknowledged the right of the administrative authorities to renew a prohibition that had lapsed. 44. However, their power to extend such a prohibition cannot give rise to an indefinite prohibition on building without any form of compensation. Where the prohibition renders the right of property devoid of any substance on account of the considerable uncertainty created by its indefinite extension or its renewal, the owner should be awarded compensation (see also judgments nos. 186/1993 and 344/1995 of the Constitutional Court, and judgment no. 159/1994 of the Consiglio di Stato (Section IV)). 45. The Court of Cassation has held that where restrictions are imposed on the right of property with a view to expropriation, even in the absence of any compensation, the owner of the land has only a legitimate interest (interesse legittimo) – that is to say, an individual position indirectly protected as far as is consistent with the public interest – and not a full and absolute right (diritto soggettivo) to compensation (see the following judgments of the Court of Cassation, sitting as a full court: no. 11308 of 28 October 1995; no. 11257 of 15 October 1992; and no. 3987 of 10 June 1983). 46. Consequently, where the municipal authorities have decided to impose a prohibition on building, the owner of the land in question may apply to the administrative courts for a ruling as to whether the authorities, in exercising their discretionary power, have complied with the statutory regulations and have not overstepped the margin of appreciation they enjoy in assessing the balance between public and private interests. However, even if the administrative courts overturn a prohibition on building, no compensation is payable where the prohibition was imposed for a specified period, particularly if it is subject to the five-year time-limit laid down in section 2 of Law no. 1187/1968. 47. In judgment no. 179 of 12-20 May 1999 the Constitutional Court, reiterating the principles established in its case-law (see the judgments cited above in paragraph 32, and also nos. 82/1982, 575/1989 and 344/1995), declared unconstitutional the lack of statutory provision for compensation in cases where an authority for expropriation or a prohibition on building had been renewed by the administrative authorities with the result that the right of property was severely affected. Restrictions on the right of property were problematic where a prohibition had been renewed or extended indefinitely or had been renewed several times for a specified period. Leaving intact the right of the authorities to renew prohibitions on building, the Constitutional Court held that there was a need for legislation providing for a form of compensation and specifying the criteria and arrangements for its award. It did not rule out the possibility that a court dealing with an application for compensation before such legislation had been enacted might derive criteria for awarding compensation, where appropriate, from the existing legal system. The Constitutional Court also pointed out that the requirement to pay compensation applied only to the time after the initial five years of the prohibition (the exemption period).