Valico S.r.l. v. Italy (dec.)

Information Note on the Court’s case-law No. 84

March 2006

Valico S.r.l. v. Italy (dec.) - 70074/01

Decision 21.3.2006 [Section IV]

Article 1 of Protocol No. 1

Article 1 para. 1 of Protocol No. 1

Possessions

Imposition of a fine on the applicant company for constructing a building in breach of planning permission: inadmissible

Article 6

Civil proceedings

Article 6-1

Access to court

Imposition by administrative authorities of a fine on the applicant company for constructing a building in breach of planning permission: inadmissible

Article 7

Article 7-1

Nullum crimen sine lege

Criminal nature of fine imposed on the applicant company for constructing a building in breach of planning permission: inadmissible

In June 1993 the applicant company bought a piece of land from a municipality for the building of a hotel complex, the detailed plans for which had been approved by the municipal council in 1986. On the same day the applicant company and the municipality signed an agreement stating that, in accordance with a ministerial decree on conservation of the landscape and the environment, the building of the complex had been authorised by a resolution of the regional council. Shortly afterwards the municipality issued the applicant with planning permission which referred to the detailed plans drawn up in 1986, as amended in 1991 and 1993. The building work commenced in July 1993. The applicant company submitted that it had been obliged to move the site a few metres to the north in order to comply with the alterations made to the detailed plans in 1993. In 1996 a municipal ad hoc committee ordered that work be suspended on the ground that the moving of the site had been in breach of the 1993 planning permission. The municipality also ordered the applicant company, under section 16(5) of Regional Law no. 20 of 3 April 1989, to pay a fine equivalent to 100% of the value of the works. The applicant company instituted proceedings before the regional administrative court. In July 1997 the court found that the 1993 amendment to the plans had been lawful and rejected the applicant’s appeal against the amount of the fine. The decision of the regional administrative court was upheld by the Consiglio di Stato, which considered that the moving of the site had fundamentally altered the original project and that, accordingly, a fresh assessment should have been made by the regional authorities as to whether the building complied with the provisions on conservation of the landscape. It pointed out that, while the lack of impact on the landscape acted as a bar to the demolition of the building, it did not prevent a fine from being imposed for failure to submit the altered construction project to the relevant regional authorities.

Inadmissible under Article 1 of Protocol No. 1: In principle, the imposition of a fine constituted interference with the right guaranteed by the first paragraph of Article 1 of Protocol No. 1, since it deprived the person concerned of a possession in the form of the sum which he or she had to pay. That provision therefore applied. The impugned interference had been in accordance with the law and had pursued the legitimate aim of preserving the landscape and ensuring rational and environmentally sound planning. It remained to be determined whether a fair balance had been maintained between the demands of the general interest and the requirement to protect the applicant company’s fundamental rights. In that connection, the moving of the site had been in breach of the planning rules and the decision whether to punish that breach by means of a financial sanction with a deterrent effect, such as a fine, fell within the Contracting States’ margin of appreciation. Whilst the sanction imposed on the applicant might at first sight seem excessive, the move to a new site had altered the original project substantially. Moreover, the construction project had been on a large scale, and the severity of a deterrent had to be proportionate to the interests at stake. Lastly, no order had been made for the building to be demolished. Consequently, the Italian authorities had struck a fair balance between the general interest and respect for the applicant company’s property rights: manifestly ill-founded.

Inadmissible under Article 7 of the Convention: The Court had to determine whether the financial sanction imposed on the applicant company amounted to a “penalty” within the autonomous meaning of that term under Article 7(1) of the Convention. The sanction provided for by Article 16(5) of Regional Law no. 20 of 3 April 1989 was not intended to provide financial compensation for damage, but was aimed essentially at punishing offenders in order to prevent further breaches of the building regulations laid down by the regional council. It therefore had both a preventive and a punitive function, the latter normally being a distinguishing feature of criminal penalties. In addition, the severity of the sanction incurred and actually imposed was of relevance; in the present case, the fine imposed on the applicant had been a very heavy one. Admittedly, it could not be converted into a prison sentence in the event of non-payment and had been imposed on the applicant company on objective grounds without the need to establish any criminal intent or negligence on its part, but these factors were not decisive with regard to the “criminal” nature of the offence.  In short, the aspects of the case which had a criminal connotation predominated and, taken in combination, meant that the fine in question was to be characterised as a “penalty” within the meaning of Article 7, which was therefore applicable. With regard to the merits of the complaint, it was beyond dispute that the fine had been prescribed by an accessible “law”. As to its foreseeability, the applicant company submitted that it had not been clearly established whether the penalty in question could be imposed even if there had been no adverse affect on the landscape. However, the Court took the view that the interpretation of the applicable provision by the domestic courts had been reasonably foreseeable. While the Consiglio di Stato had not until 2000 stated that a fine might be payable even if there had been no proven impact on the landscape, the applicant, as a construction company, should have known that in omitting to submit the new plans for prior authorisation it ran the risk of incurring the statutory penalty. In addition, the provision in question stated clearly that the amount of the fine payable was equivalent to 100% of the value of the works carried out. Accordingly, there was no appearance of a violation of Article 7: manifestly ill-founded.

Inadmissible under Article 6 of the Convention: As the fine amounted to a “penalty” within the meaning of Article 7 of the Convention, the legal provision breached by the applicant company dealt with a criminal offence within the meaning of Article 6. A penalty of that kind could, as in the present case, be imposed by an administrative authority which did not satisfy the requirements of Article 6, provided that its decision was subsequently reviewed by a body which had full jurisdiction. In the instant case the applicant company had been able to challenge the administrative sanction before the regional administrative court and subsequently before the Consiglio di Stato. Far from confining themselves to simply reviewing the lawfulness of the penalty, those courts had examined the full set of allegations infact and in law made by the applicant company and had ascertained whether the authorities, in the particular circumstances of the case, had made appropriate use of their powers. Accordingly, there was no appearance of a violation of Article 6: manifestly ill-founded.

© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.

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