European Court of Human Rights

Information Note on the Court’s case-law No. 177

August-September 2014

Valle Pierimpiè Società Agricola S.p.a. v. Italy - 46154/11

Judgment 23.9.2014 [Section II] See: [2014] ECHR 992

Article 1 of Protocol No. 1

Article 1 para. 1 of Protocol No. 1

Deprivation of property

Possessions

Obligation on company to transfer fishing grounds to public authority without compensation and to pay substantial mesne profits if it remained in unlawful possession: violation

Facts - The applicant company acquired a production facility known as Valle Pierimpiè, a “fishing valley” situated on a lagoon in the province of Venice, on the basis of a notarised deed of sale. The company carried out a particular form of fish rearing on the site. On three occasions, in 1989, 1991 and 1994, the provincial department of the public revenue service ordered the company to vacate the property on the ground that it actually belonged to the public maritime domain. The applicant subsequently applied to the domestic courts seeking recognition of its alleged status as the owner of Valle Pierimpiè. The application was rejected by the District Court, which ruled that Valle Pierimpiè was State property and that the company was therefore liable to pay the administrative authorities compensation for unlawful occupation of the fishing valley, in an amount to be determined in separate proceedings. That decision was upheld following an ordinary appeal and an appeal on points of law.

Law - Article 1 of Protocol No. 1: According to the Government, the applicant had never had a “possession” within the meaning of Article 1 of Protocol No. 1, as Valle Pierimpiè had for many years been State property, and as such could not be disposed of. However, the Court pointed out that a “possession” within the meaning of that provision could be said to exist even where title to the property was withdrawn, provided that the factual and legal situation prior to such withdrawal had conferred upon the applicant a legitimate expectation linked to property rights which was sufficient to constitute a substantive interest protected by the Convention. There were several indications that the applicant company had possessed such an interest. Firstly, it had possessed formal title to the property, as recorded by a notary and entered in the property registers; secondly, it could found its legitimate expectation on the long-standing practice of granting individuals title to the fishing valleys and tolerating their continued occupation and use of them; lastly, the site was the base for the applicant company’s activities and the profit it derived from them was its main source of income. Article 1 of Protocol No. 1 was therefore applicable.

The applicant’s possession had been acquired by the State and the applicant company had forfeited any possibility of asserting title to it. In order to continue to carry out its fish rearing activities in Valle Pierimpiè it would have to apply for a licence and, if it obtained one, would have to pay rent or compensation. There had therefore been interference with the applicant company’s right to the peaceful enjoyment of its possessions, amounting to a “deprivation” of property within the meaning of the first paragraph, second sentence of Article 1 of Protocol No. 1.

The declaration of State ownership of the applicant’s “possession” had had a sufficient legal basis in Italian law. The incorporation of the fishing valley into the public maritime domain had pursued the legitimate aim in the general interest of preserving the environment and the lagoon ecosystem and ensuring that the latter was actually designated for public use.

The applicant had not been offered any compensation for the deprivation of its possession. On the contrary, it had been ordered to pay compensation for unlawful occupation of Valle Pierimpiè. Although the amount of compensation had yet to be determined in separate civil proceedings, the applicant alleged that it could be as high as twenty million euros, a sum that would render the company insolvent. The Government did not dispute this and stated that the compensation should be calculated with effect from 1984, an indication that the amount would be very significant.

It also had to be borne in mind that, in the instant case, the acquisition of the property by the State had not been founded on economic reform or social justice measures. Furthermore, there was nothing in the file to show that the authorities had taken account of the fact that the transfer of the fishing valley to the public maritime domain had caused the applicant to lose the “tools of its trade” since the valley was the base for its business activities, which it had carried out in a lawful manner.

It was true that, as far back as 1989, the applicant company had been aware of the fact that the State considered Valle Pierimpiè to belong to the State maritime domain, and that it could have considered relocating its activities accordingly. Furthermore, it was not ruled out that the company might be allowed to continue to use the fishing valley, subject to payment of a fee. Nevertheless, acquiring an alternative site for fish rearing was likely to be difficult and, like the payment of a fee, was liable to entail significant costs. The authorities had not taken any steps to lessen the financial impact of the interference. This appeared particularly vexatious given that there was no evidence in the present case that the applicant had not acted in good faith.

Accordingly, the interference in question, which had not been accompanied by any compensation and had entailed an additional burden on the applicant, had been manifestly disproportionate to the legitimate aim pursued. Hence, the State had not struck a fair balance between the public and private interests at stake, and an excessive and impracticable burden had been imposed on the applicant.

Conclusion: violation (unanimously).

Article 41: EUR 5,000 in respect of non-pecuniary damage; question of just satisfaction in respect of pecuniary damage reserved.

 

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