CEDH, Cour (Première Section Comité), GUISO GALLISAI v. ITALY, 23 janvier 2024, 19501/06

FIRST SECTION DECISION Application no. 19501/06 Stefano GUISO GALLISAI and Gianfrancesco GUISO GALLISAI against Italy The European Court of Human Rights (First Section), sitting on 23 January 2024 as a Committee composed of: Péter Paczolay, President, Gilberto Felici, Raffaele Sabato, judges, and Liv Tigerstedt, Deputy Section Registrar, Having regard to: the application (no. 19501/06) against the Italian Republic lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms ("the Convention") on 12 May 2006 by two Italian nationals, Mr Stefano Guiso Gallisai ("the first applicant") and Mr Gianfrancesco Guiso Gallisai ("the second applicant"), who were born in 1959 and 1948 respectively, live in Milan and Rome and were represented by the first applicant and by Mr N. Paoletti, a lawyer practising in Rome; the decision to give notice of the application to the Italian Government ("the Government"), represented by their former Agent, Ms E. Spatafora, their former co-Agent, Mr N. Lettieri, and their Agent, Mr L. D'Ascia; the parties' observations; Having deliberated, decides as follows:

SUBJECT MATTER OF THE CASE

1. The present case concerns the alleged unlawfulness of the expropriation of the applicants' land and the failure by the domestic courts to grant them adequate compensation. 2. The applicants were the owners of two plots of land in Nuoro which were occupied and then expropriated in 2000 by the Nuoro Municipality in view of the construction of a residential area on one plot and a road on the other plot. 3. Both applicants challenged the administrative orders underlying the expropriation procedures before the Sardinia Administrative Court. 4. On 11 May 2004 the Administrative Court dismissed the applications, confirming the lawfulness of the expropriation procedures. 5. On 16 November 2005 the Council of State upheld that conclusion. Proceedings concerning the plot used for the construction of the road 6. Only the first applicant, together with other co-owners, contested the amount of compensation awarded for the plot used for the construction of the road. The Cagliari Court of Appeal, through final judgment issued on 27 January 2015, awarded an amount based on the market value of the land and covering both the loss of property and the damages related to the previous occupation, increased by statutory interest. However, the Court of Appeal dismissed the first applicant's request to adjust the market value of the land according to the inflation rate and also confirmed the deduction of 20% tax provided for by Article 11 of Law no. 413 of 30 December 1991. Thus, the first applicant, jointly with the other co-owners, were awarded a total amount of 89,095.08 euros (EUR). 7. On 15 April 2020, in execution of this judgment, the Municipality paid the first applicant EUR 8,797.62. The second applicant was also paid EUR 8,797.62 by the Municipality as he was a co-owner of the land, notwithstanding the fact that he had not been a party to the proceedings challenging the compensation before the Court of Appeal. Proceedings concerning the plot used for the residential area 8. The applicants, in separate proceedings, also challenged the compensation initially offered by the Municipality for the plot used for the residential area. 9. As regards the second applicant, with a first judgment issued on 15 July 2011, the Cagliari Court of Appeal awarded him EUR 66,053.59 for the market value of the land at the time of the expropriation considering the land as constructible, to be increased by statutory interest. By contrast, the Court of Appeal did not adjust the sum for inflation and confirmed the deduction of 20% tax provided for by Article 11 of Law no. 413/1991. However, it granted the second applicant a further amount to compensate him for the passage of time between the loss of property and the payment of compensation, determined in accordance with the net average rate of return on government bonds with a maturity of no more than 12 months. 10. On 12 February 2014, in execution of this judgment, the Municipality paid the applicants EUR 89.095,08 each. 11. Upon appeal by the Municipality, the appellate judgment was overturned by the Court of Cassation, which considered that the plot of land ought to have been considered in part as non-constructible since, at the time of the expropriation, the local plan earmarked it for "public road and parking purposes". Thus, the case was remitted to the Cagliari Court of Appeal for a new assessment. 12. On 15 May 2020 the Cagliari Court of Appeal set the compensation due to the second applicant at EUR 24,135.74, to be increased by statutory interest and by a further amount determined in accordance with the net average rate of return on government bonds with a maturity of no more than 12 months. The second applicant was, therefore, requested to pay the Municipality the sums in excess already received (see paragraph 10 above). This decision was not appealed against and became final. 13. As regards the first applicant, on 22 April 2022 the Cagliari Court of Appeal, on the basis of the conclusions reached by the Court of Cassation in the proceedings concerning the second applicant, awarded him EUR 24,132.21, increased by statutory interest. It dismissed his claim concerning inflation adjustment and compensation for delayed payment. In his application before the Court the first applicant submitted that he would have to repay the Municipality the difference between the amount already paid to him (see paragraph 10 above) and the amount awarded by the Court of Appeal. Complaints 14. Invoking Article 1 of Protocol No. 1 to the Convention, the applicants complained of having been unlawfully deprived of their land. They further complained of the inadequacy of the amount of compensation received.

THE COURT'S ASSESSMENT

15. In the present case, it is not in dispute that there has been a deprivation of property and that it pursued a legitimate aim in the public interest. 16. As regards the lawfulness of the dispossession, in the application originally submitted to the Court, the applicants argued that their property had been unlawfully expropriated and that the domestic decisions dismissing their claims to that effect were in contrast with previous domestic case-law. The Government contested these arguments. 17. The Court notes that these claims were not reiterated in the applicants' observations or in subsequent correspondence with the Court. On the contrary, they expressly referred to their case as one of lawful expropriation. In any event, the Court observes that the applicants' arguments were duly examined and dismissed by the Sardinia Administrative Court and the Council of State (see paragraph 3 above), giving reasons which do not appear arbitrary or manifestly unreasonable. The Court is, therefore, satisfied that the expropriation was lawful. 18. It remains for the Court to consider whether the interference with the applicants' property rights was proportionate, that is whether the compensation received was sufficient. 19. The applicants challenged the amount of compensation received on several grounds. They argued that: (i) Article 5 bis of Law no. 359/1992 had been applied to their case, thus reducing the compensation; (ii) 20% taxation had been levied on the compensation; and (iii) the compensation had not been adjusted for inflation. With respect to the plot of land used for building the residential area, they challenged the authorities' assessment of part of the land as non-constructible. 20. The Government contested these arguments. 21. With specific reference to the second applicant, the Government contended that he had failed to exhaust domestic remedies in connection with the compensation for the land devoted to the construction of the road, not having challenged the sum offered by the Municipality for this plot of land before the domestic courts. 22. The Court notes that, indeed, the second applicant did not avail himself of any domestic remedy in respect of the land devoted to the public road. It follows that this part of the second applicant's complaint concerning this plot of land must be declared inadmissible in accordance with Article 35 §§ 1 and 4 of the Convention for non-exhaustion of domestic remedies. 23. Turning to the alleged application of Article 5 bis of Law no. 359/1992 (see Scordino v. Italy (no. 1) [GC], no. 36813/97, §§ 99-104, ECHR 2006-V) in order to calculate the compensation, the Court notes that it was not applied by the domestic courts since it had been declared unconstitutional before any of the domestic decisions concerning the applicants were issued. Thus, the criterion used for calculating the compensation was the market value of the land determined at the time of the loss of property (see paragraphs 6, 9, 12 and 13 above). 24. To the extent that the applicants contested the fact that part of the land used for building the residential area was considered non-constructible notwithstanding its potential for development, the Court has already considered that the estimation of the market value takes into account the legal designation of the land before the expropriation. In this connection, the Court has accepted that compensation must be calculated based on the property's value on the date on which ownership thereof was lost, which is intrinsically linked to the designation of the land at that time. Furthermore, the Court has already found that, in the absence of any concrete expectation of development prior to the expropriation, it is not appropriate to rely solely on the applicant's view that the land had potential for development (see Maria Azzopardi v. Malta, no. 22008/20, §§ 62-63, 9 June 2022). 25. The Court notes the domestic courts' finding to the effect that the land's designation at the time of the expropriation was for public road and parking purposes (see paragraph 11 above). Accordingly, it does not appear to be unreasonable that the compensation for the expropriation of the applicants' land was calculated considering the land as being non-constructible. Indeed, without the expropriation, the land would have remained non-constructible, thus entailing that the calculation of compensation on the basis of a different - and more valuable - designation would have given the applicants an undue profit. The Court thus accepts the compensation calculated by the Cagliari Court of Appeal on 15 May 2020 and 22 April 2022, respectively for the applicants (see paragraph 12 and 13 above). 26. Turning to the applicants' dissatisfaction with the compensation in that there had been no adjustment for inflation, the Court has previously found that lengthy delays in the payment of expropriation compensation, where attributable only to the authorities and in the context of hyperinflation, had led to increased financial loss for the person whose land had been expropriated. The failure to adequately compensate the applicants for this loss rendered the compensation inadequate (see Akkuş v. Turkey, 9 July 1997, § 29, Reports of Judgments and Decisions 1997-IV, and Aka v. Turkey, 23 September 1998, § 49, Reports 1998-VI). In another case, in light of a considerable change that had occurred in the monetary depreciation in the country over a period of twenty-two years, the expropriation compensation awarded, which did not account for inflation, was not capable of making good the loss sustained (see Chinnici v. Italy (no. 2), no. 22432/03, §§ 45-46, 14 April 2015). 27. Against this background, the Court notes that the applicants in the present case limited their arguments to stating that they were entitled to inflation adjustment given the delay in obtaining the compensation due to them. They did not submit any information on the trends of inflation in the period between the dispossession of property and the payment of compensation (contrast Chinnici; Akkuş; and Aka, all cited above). Nor have the applicants quantified the amount they claim they should have received as inflation adjustment, in order to substantiate the allegedly disproportionate character of the compensation on account of a failure to make such an award (contrast Chinnici, cited above, § 45). Moreover, the Court notes that between 2000 and 2014 the rate of statutory interest, which the applicants were awarded, was on average set above the rate of inflation. 28. The Court also observes that, in 2014, the Municipality paid the applicants the sum awarded by the Court of Appeal in 2011. Therefore, until the final domestic decisions in 2020 and 2022, respectively, the applicants had at their disposal a higher amount than what was ultimately awarded to them. In this regard, the Court underlines that the applicants have not submitted any information regarding when/if they repaid the sum in excess and its exact amount. 29. The Court further notes that, in respect of the second applicant, the domestic courts did not fail to award a sum reflecting the passage of time (compare Caré and Others v. Italy [Committee], no. 13447/07, § 19, 14 November 2023, and contrast Chinnici, cited above). On the contrary, they took this factor into account and, in addition to statutory interest, awarded him a further amount calculated with reference to the net average rate of return on government bonds with a maturity of no more than 12 months. The second applicant did not quantify the sum received under this title, thus preventing the Court from assessing its bearing on the proportionality of the compensation. 30. In view of all of the above, the applicants have failed to persuade the Court that, in the specific circumstances of the case, the compensation awarded to them was rendered inadequate on account of the failure to award inflation adjustment by the domestic courts, or on any other ground. 31. Lastly, with reference to the 20% taxation under Law no. 413/1991, the Court has found in previous cases that the fact that the tax at issue had been applied to sums awarded as expropriation compensation was not sufficient to call into question the adequacy of such compensation (Cacciato v. Italy (dec.), no. 60633/16, § 32, 16 June 2018). 32. In view of the foregoing, this part of the applicants' complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

For these reasons

, the Court, unanimously, Declares the application inadmissible. Done in English and notified in writing on 15 February 2024. Liv Tigerstedt Péter Paczolay Deputy Registrar President