CASE OF G.I.E.M. S.R.L. AND OTHERS v. ITALY

1. The case originated in three applications (nos. 1828/06, 34163/07 and 19029/11 ) 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”) by four Italian companies and one Italian national: G.I.E.M. S.r.l., Hotel Promotion Bureau S.r.l. (company in administration), R.I.T.A. Sarda S.r.l. (company in administration), Falgest S.r.l. and Mr Filippo Gironda (“the applicants”), on 21 December 2005, 2 August 2007 and 23 December 2011 respectively.
2. The applicants were represented respectively by Mr G. Mariani and Mr F. Rotunno, lawyers practising in Bari; Mr G. Lavitola, lawyer practising in Rome and Mr V. Manes, lawyer practising in Bologna; and Mr A.G. Lana and Mr A. Saccucci, lawyers practising in Rome.
The Italian Government ( “ the Government ” ) were represented by their Agent, Ms E. Spatafora, and their co-Agent, Ms P. Accardo.
3. The applicants submitted the following complaints:
(a) G.I.E.M. S.r.l alleged that there had been a violation of Article 6 § 1, Article 7 and Article 13 of the Convention, and also of Article 1 of Protocol No. 1, on account of the confiscation of its property.
(b) Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l. alleged that there had been a violation of Article 7 of the Convention and of Article 1 of Protocol No. 1, on account of the confiscation of their property.
(c) Falgest S.r.l. and Mr Gironda alleged that there had been a violation of Articles 7 and 13 of the Convention and of Article 1 of Protocol No. 1, on account of the confiscation of their property. Mr Gironda also argued that Article 6 § 2 of the Convention (presumption of innocence) had been breached.
4. Notice of the complaints under the above-mentioned Articles was given to the Government, respectively, on 30 March 2009 for application no. 1828/06, on 5 June 2012 for application no. 34163/07 and on 30 April 2013 for application no. 19029/11. Applications nos. 34163/07 and 19029/11 were declared inadmissible in respect of the other complaints submitted therein.
5. On 17 February 2015 a Chamber of the Second Section, composed of Işıl Karakaş, President, Guido Raimondi, András Sajó, Helen Keller, Paul Lemmens, Robert Spano and Jon Fridrik Kjølbro, relinquished jurisdiction in favour of the Grand Chamber, none of the parties to the case having objected ( Article 30 of the Convention and Rule 72).
6. A hearing took place in public in the Human Rights Building, Strasbourg, on 2 September 2015 (Rule 59 § 3 of the Rules of Court ).
There appeared before the Court:
(a) for the GovernmentMs P. Accardo, Co- Agent;
(b) for the applicant company G.I.E.M. S.r.l. Mr G. Mariani, Mr F. Rotunno, Counsel, Ms C. Millaseau, Adviser;
(c) for the applicant companies Hotel Promotion Bureau S.r.l and R.I.T.A. Sarda S.r.l. Mr G. Lavitola, Mr V. Manes, Counsel, Mr F. Mazzacuva, Mr N. Recchia, Ms A. Santangelo, Advisers;
(d) for the applicant company Falgest S.r.l and the applicant Mr Filippo GirondaMr A. G. Lana, Mr A. Saccucci, Counsel, Mr A. Sangiorgi, Ms G. Borgna, Advisers.
The Court heard addresses by Ms Accardo, Mr Mariani, Mr Rotunno, Mr Lavitola, Mr Manes, Mr Lana and Mr Saccucci, and the answers of Ms Accardo, Mr Rotunno, Mr Manes, Mr Lana and Mr Saccucci in reply to questions from judges.
I. THE CIRCUMSTANCES OF THE CASE
7. The applicant companies have their registered offices respectively in Bari ( G.I.E.M. S.r.l. ), Rome ( Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l. ), and Pellaro (Reggio di Calabria ) ( Falgest S.r.l. ).
Mr F. Gironda was born in December 1959 and lives in Pellaro.
1. Building work on the applicant company ’ s land
8. The applicant company owned a plot of land in Bari on the coast at Punta Perotti, with a total area of 10,365 sq. m, adjacent to land belonging at the time to a limited liability company Sud Fondi S.r.l. The land was classified as suitable for building in the general land-use plan ( piano regolatore generale ) in respect of two plots, the rest being earmarked for use by small businesses according to the plan ’ s specifications.
9. In By- Law no. 1042 of 1 1 May 1992 the Bari municipal council approved a site division and development plan ( piano di lottizzazione ‑ hereinafter “site development plan” ) submitted by Sud Fondi S.r.l. The plan provided for the construction of a multi- purpose complex, comprising housing, offices and shops. According to the applicant company, its land was automatically incorporated into the development plan by the municipal council.
10. On 27 October 1992 the Bari municipal authority asked the applicant company if it wished to be party to a site development agreement in order to be able to build on the land. If its response was negative, the authority would have to expropriate the land under Law no. 6 (1979) of the Apulia Region.
11. On 28 October 1992 the applicant company informed the Bari municipal authority that it wished to participate in a site development agreement. The authority did not reply.
12. On 19 October 1995 the Bari municipal authority issued a building permit to Sud Fondi S.r.l.
13. On 14 February 199 6 Sud Fondi S.r.l. began the building work, which had mostly been completed by 17 March 1997.
2. Criminal proceedings against the directors of Sud Fondi S.r.l.
14. On 27 April 1996, following the publication of a newspaper article about the building work carried out near the sea at Punta Perotti, the public prosecutor of Bari opened a criminal investigation.
15. On 17 March 1997 the public prosecutor ordered a temporary measure restraining disposal of property in respect of all the buildings in question. He also added the names of certain individuals to the register of persons prosecuted, including those of the authorised representative of Sud Fondi S.r.l. and the managers and foremen responsible for the building work. In his decision the public prosecutor expressed the view that the locality known as Punta Perotti was a protected natural site and that the building of the complex was therefore illegal.
16. The representatives of Sud Fondi S.r.l. challenged the temporary restraining measure before the Court of Cassation. In a decision of 17 November 1997 that court declared the measure null and void and ordered the return of all the buildings to their owners, on the ground that it was not prohibited to build on the site according to the land-use plan.
17. In a judgment of 10 February 1999 the Bari District Court acknowledged the illegality of the buildings erected at Punta Perotti as they had been built in breach of Law no. 431 of 8 August 1985 (“Law no. 431/1985”), which prohibited the granting of planning permission in respect of sites of natural interest, including coastal areas. However, since in the present case the local authority had issued the building permits, and in view of the lack of coordination between Law no. 431 / 1985 and the regional legislation, which was incomplete, the court found that no negligence or criminal intent could be imputed to the defendants. All the defendants were thus acquitted on the ground that the mental element of the offence had not been made out (“ perché il fatto non costituisce reato ”).
18. In the same judgment, finding that the development plans were materially in breach of Law no. 47 / 1985 and illegal, the Bari District Court ordered, in accordance with section 19 of that Law, the confiscation of all the developed land at Punta Perotti, including that belonging to the applicant company, together with the buildings thereon, and the incorporation of the property, without compensation, into the estate of the municipal authority of Bari.
19. In an order of 30 June 1999 the Heritage Minister ( Ministro dei beni culturali ) prohibited any building in the coastal area near the city of Bari, including at Punta Perotti, on the ground that it was a site of significant natural interest. That measure was declared null and void by the Regional Administrative Court the following year.
20. The public prosecutor appealed against the judgment of the Bari District Court, calling for the defendants to be convicted.
21. In a judgment of 5 June 2000 the Bari Court of Appeal overturned the decision of the court below. It found that the granting of planning permission had been legal, in the absence of any ban on building at Punta Perotti, and there having been no appearance of illegality in the procedure for the adoption and approval of the site development agreements.
22. The Court of Appeal thus acquitted the defendants on the ground that no material element of an offence had been made out (“ perché il fatto non sussiste ”) and revoked the confiscation measure in respect of all the buildings and land. On 27 October 2000 the public prosecutor appealed on points of law.
23. In a judgment of 29 January 2001 the Court of Cassation quashed the Court of Appeal ’ s decision without remitting it. It acknowledged the material illegality of the site development plans on the ground that the land in question was subject to an absolute ban on building and to a landscape protection measure, both provided for by law. In that connection, the court noted that at the time the development plans had been adopted (20 March 1990), Regional Law no. 30 / 1990 on landscape protection had not yet entered into force. Consequently, the applicable provisions in the present case were those of Regional Law no. 56 of 1980 (on land use and development) and National Law no. 431 / 1985 (on landscape protection).
24. The Court of Cassation observed that Law no. 56 / 1980 in fact imposed a prohibition on building within the meaning of section 51 (F), from which the circumstances of the case allowed no derogation, because the site development plans concerned plots of land that were not situated within the city limits. The court added that, at the time when the site development agreements were adopted, the land in question was included in an implementation plan ( piano di attuazione ) for the general land-use plan which post-dated the entry into force of Regional Law no. 56/ 1980.
25. The Court of Cassation noted that in March 1990 (see paragraph 23 above), at the time when the site development plans had been approved, no implementation scheme ( programma di attuazione ) had been in force. In that connection the court referred to its case-law to the effect that an implementation scheme had to be in force at the time of the approval of site development plans (Court of Cassation, Section 3, 21 January 19 97, Volpe; 9 June 19 97, Varvara; 24 March 19 98, Lucifero ). The reason for this was ‑ again according to the case-law – that once an implementation scheme had expired, a building ban which had been discontinued by the scheme would become effective once again. Consequently, it was necessary to find that the land in question had been subject to a building ban at the time of the approval of the site development plans.
26. The Court of Cassation further referred to the existence of a landscape protection measure, under section 1 of National Law no. 431/ 1985. In the present case, as the competent authorities had not issued a notice of conformity with the requirements of landscape protection (that is, neither the nulla osta approval issued by the national authorities attesting to such conformity – under section 28 of Law no. 150/1942 – nor the prior approval of the regional authorities under sections 21 and 27 of Law no. 150/1942, nor the approval of the Regional Planning Committee under sections 21 and 27 of Regional Law no. 56/1980).
27. Lastly, the Court of Cassation noted that the site development plans concerned only 41,885 sq. m, whereas, according to the specifications of the general land-use plan for the city of Bari, the minimum area was set at 50,000 sq. m.
28. In the light of those considerations, the Court of Cassation thus found that the site development plans and building permits had been illegal. It acquitted the defendants on the grounds that they could not be found to have negligently or intentionally committed offences and that they had made an “unavoidable and excusable mistake” in the interpretation of the regional legislation, which was “obscure and poorly worded” and interfered with the national law. The Court of Cassation also took into account the conduct of the administrative authorities, and in particular the following facts: on obtaining the building permits, the defendants had been reassured by the director of the relevant municipal office; the site-protection prohibitions with which the construction project was at odds did not appear in the land-use plan; and the competent national authority had not intervened. Lastly, the Court of Cassation found that in the absence of any investigation concerning the reasons for the conduct of the public bodies, it was not possible to speculate on those reasons.
29. In the same judgment the Court of Cassation ordered the confiscation of all the buildings and plots of land, on the ground that, in accordance with its case-law, the application of section 19 of Law no. 47 of 1985 was mandatory in the case of illegal site development, even where the property developers had not been convicted.
30. The judgment was deposited in the court Registry on 26 March 2001.
31. In the meantime, on 1 February 2001 the applicant company had again asked the Bari municipal authority for permission to enter into a site development agreement.
32. On 15 February 2001 the Bari municipal authority informed the applicant company that, following the judgment of the Court of Cassation of 29 January 2001, the ownership of the land at Punta Perotti, including that belonging to the applicant company, had been transferred to the municipality.
33. The criminal proceedings described above gave rise to another application to the Court (see Sud Fondi S.r.l. and Others v. Italy, no. 75909/01, 20 January 2009).
3. Actions taken by the applicant company for the return of its land
34. On 3 May 2001 the applicant company applied to the Court of Appeal of Bari seeking the return of its land. It alleged that, in line with case-law of the Court of Cassation, the confiscation of property belonging to a third party in relation to criminal proceedings could be ordered only to the extent that the latter had participated in the commission of the offence, in terms of either material or mental elements.
35. In a decision of 27 July 2001 the Court of Appeal upheld the applicant company ’ s appeal.
36. The public prosecutor appealed on points of law.
37. In a judgment of 9 April 2002 the Court of Cassation quashed the decision of the Bari Court of Appeal and remitted the case to the Bari District Court.
38. The applicant company lodged an interlocutory application for review of the enforcement order, seeking the return of its land.
39. In a decision deposited in the court ’ s Registry on 18 March 2004, the Bari preliminary investigations judge ( giudice per le indagini preliminari ) dismissed the applicant company ’ s application. He first observed that the company ’ s grievances concerned neither the existence nor the formal lawfulness of the impugned measure, which was a mandatory administrative sanction that the criminal court was also entitled to impose in respect of the property of third parties which had not taken part in the commission of the offence of unlawful site development offence. The judge found that the public imperative of protecting land had to prevail over the individual interests.
40. The applicant company appealed on points of law. It emphasised that no construction work had actually been carried out on its land, which had not been the subject of a building permit. By its very nature, it argued, a confiscation measure should be directed solely against land upon which unlawful construction had taken place.
41. In a judgment of 22 June 2005, deposited in the court ’ s Registry on 18 January 2006, the Court of Cassation, finding that the Bari preliminary investigations judge had addressed all the points in dispute giving logical and correct reasons, dismissed the applicant company ’ s appeal on points of law. The court noted that the confiscation of the applicant company ’ s land had been compliant with its settled case-law whereby the measure provided for in section 19 of Law no. 47 of 1985 was a mandatory administrative sanction imposed by the criminal court on the basis of the incompatibility of the situation of the property in question with the legislation on unlawful site development, even where the defendants had been acquitted. Property owners who were not parties to the criminal proceedings and who claimed to have acted in good faith would be entitled to seek redress before the civil courts.
42. According to the information provided by the parties, in October 2012 the Bari municipal authority, having regard to the principles set out and the violations found by the Court in its Sud Fondi S.r.l. and Others judgments ( merits and just satisfaction, no. 75909/01, 10 May 2012 ), asked the Bari District Court to return the confiscated land to the applicant company. In a decision of 12 March 2013 the preliminary investigations judge of that court revoked the confiscation measure and ordered the return of the land on account of the fact that, first, the Court had found a violation of Article 7 of the Convention in Sud Fondi S.r.l. and Others and, secondly, that the company was to be regarded as a bona fide third party because none of its directors had been found liable for the offence of unlawful site development. The judge ’ s decision was entered in the land register on 14 June 2013 and the applicant company was thus able to recover its property on 2 December 2013.
43. On 7 April 2005 the applicant company had applied to the Bari District Court, seeking compensation for the damage it had sustained as a result of the conduct of the Bari municipal authority and the consequences for the company ’ s assets. It reproached the municipal authority for: (1) failing to adopt an alternative to the land-use plan; (2) failing to clarify the existence of the constraints arising as to the authorised use of the areas concerned by the site development at issue; and (3) approving site development procedures which had apparently been lawful but had led to the confiscation of the land and had caused a significant economic loss.
According to the information provided by the parties, the proceedings were still pending, as the expert ’ s report evaluating the damage, estimated at 52 million euros by the applicant company, had not yet been filed.
B. Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l.
44. The applicant company R.I.T.A. Sarda S.r.l. was the owner of land suitable for building with an area of 33 hectares at Golfo Aranci.
45. Under the municipal development scheme ( programma comunale di fabbricazione ) for Golfo Aranci, approved on 21 December 1981, the land in question belonged to zone F – classified as a tourist zone – and was suitable for building within a given volume. It was possible to exceed that volume in the context of hotel or hotel -type development.
46. Wishing to build a hotel-type residential complex for tourists with a number of accommodation units ( produttiva alberghiera ), R.I.T.A. Sarda S.r.l. submitted a site development plan ( piano di lottizzazione ) to the competent authorities.
47. On 27 March 1991, under section 13 of Regional Law no. 45 of 1989, the Sardinia Region issued its nulla osta approval for building at a minimum distance of 150 metres from the sea, provided that once erected the buildings would actually be used for tourist accommodation. That obligation had to be recorded in the land register.
48. On 29 November 1991 the Sardinia Region granted the landscape transformation permit, under Law no. 431/1985 and section 7 of Law no. 1 497/1939, to R.I.T.A. Sarda S.r.l. (see paragraphs 9 3 -9 6 below).
49. The municipality of Golfo Aranci approved the site development plan with final effect on 17 December 1991.
50. On 22 April 1992, subject to the regional approval, the municipality of Golfo Aranci authorised the mayor to issue a derogating building permit allowing a greater construction volume than that provided for by its municipal development scheme, for the purposes of a hotel -type structure ( opere alberghiere ricettive ). The file shows that the site development plan concerned an area of 330,026 sq. m.
51. On 17 July 1992 the Sardinia Region issued its final approval of the plan.
52. In the meantime, on 22 June 1992, Regional Law no. 11/1992 had entered into force. It removed the possibility of derogating from the prohibition on building near the sea and fixed the minimum distance at 2 kilometres for dwellings and 500 metres for hotels. As regards buildings intended for hotel-type use, such as the hotel-type residential complexes for tourists in the present case, they were to be treated as dwellings. Under the same law, the minimum distance of 2 kilometres thus had to be maintained, except in the cases where, before 17 November 1989, a site development agreement had already been signed and the infrastructure work had already begun.
53. On 17 July 1992 the Sardinia Region authorised the mayor to grant a building permit to R.I.T.A. Sarda S.r.l. by way of derogation from the municipal land-use plan.
54. On 13 August 1992 the mayor of Golfo Aranci and R.I.T.A. Sarda S.r.l. entered into a site development agreement. Under Article 10 thereof the buildings erected on the site would continue to be used for tourist-hotel purposes and could not be sold off in separate units for a period of twenty years. The agreement stipulated that the development plan was compliant with section 13 of Regional Law no. 45 / 1989 and with the other planning regulations; it certified that the applicant company had paid a deposit of an amount equivalent to the total cost of the amenities. That work was to be paid for by the applicant company, which would also be required to assign 30% of the land free of charge to the municipality for the primary infrastructure ( urbanizzazione primaria ).
55. On 31 August 1992 the municipality of Golfo Aranci issued a permit for the primary infrastructure. On 23 November 1992 the municipality issued the building permit for the construction work.
56. On 19 February 1993, following the entry into force on 22 June 1992 (see paragraph 52 above) of Regional Law no. 11/1992, amending Regional Law no. 45/1989, the regional authority revoked certain permits that had been granted under the previous legislation. The applicant company was not affected.
57. The work began in 1993. In 1997 eighty-eight housing units, less than one third of the total number, had been built. A number of them had been sold to individuals, subject to a clause stipulating that the property had to remain assigned, for a number of years, for tourist-hotel use.
58. On 28 January 1995 R.I.T.A. Sarda S.r.l., which was seeking new partners to optimise the project and share the risks, asked the municipal authority whether the sale of the buildings to third parties was compatible with the development agreement. On 14 February 1995 the municipal authority stated that the agreement had been drafted clearly enough; it therefore did not need clarification. It gave a favourable opinion as to the possibility of selling the buildings, but not in single units and provided the intended use of the properties remained unchanged.
59. On 11 March 1996 the municipal authority, again approached by the applicant company, confirmed the opinion issued on 14 February 1995.
60. At an unknown date, R.I.T.A. Sarda S.r.l. entered into a preliminary contract of sale with Hotel Promotion Bureau S.r.l. concerning part of the land covered by the development agreement and certain buildings erected in the meantime. In addition, on 15 January 1996, Hotel Promotion Bureau S.r.l. entered into an agreement ( contratto di appalto ) with R.I.T.A. Sarda S.r.l. under which the latter undertook to carry out construction work on the land forming the object of the preliminary contract of sale.
61. With a view to becoming the owner of the land and buildings, on 26 February 1997 Hotel Promotion Bureau S.r.l. also signed agreements with a travel agent for the purpose of renting out units on a weekly basis.
62. On 22 October 1997 R.I.T.A. Sarda S.r.l. sold to Hotel Promotion Bureau S.r.l. 36,859 sq. m of land and the buildings known as “C2”, namely sixteen units for residential-tourist use. In addition to the buildings R.I.T.A. Sarda S.r.l. assigned the construction rights to Hotel Promotion Bureau S.r.l. The price of the transaction was fixed at 7,200,000,000 Italian lire (ITL), equivalent to 3,718,489.67 euros (EUR).
63. In November 1997 R.I.T.A. Sarda S.r.l. was the owner of sixteen housing units and the plots of land covered by the site development plan, with the exception of plot no. 644 and those previously sold to Hotel Promotion Bureau S.r.l., which was the owner of the land it had purchased and of sixteen units.
64. On 26 March 1998 the municipal authority approved the transfer ( voltura ) of the building permit concerning the land and buildings purchased by Hotel Promotion Bureau S.r.l.
65. On 3 April 2006, further to a request by R.I.T.A. Sarda S.r.l. for a planning certificate in respect of the relevant property for the period 1990 ‑ 1997, the municipal authority stated that the development agreement signed with R.I.T.A. Sarda S.r.l. and the permits granted were compatible with the planning regulations in force at the material time, and in particular with Regional Law no. 45/1989, and it therefore considered that the offence of unlawful site development was not made out in the circumstances.
66. In 1997 the public prosecutor of Olbia opened a criminal investigation in respect of Mr M. C. and Mr L. C., the legal representatives of the applicant companies. They were suspected of a number of offences, including that of unlawful site development within the meaning of section 20 of Law no. 47/1985 for building too close to the sea and without planning permission, together with fraud for changing the intended use of the properties in breach of the development agreement.
67. On 20 November 1997 a court order restraining disposal of property was imposed on the land and buildings.
68. In a decision of 17 January 2000 the Sassari District Court returned the land and buildings to their rightful owners.
69. In a judgment of 31 March 2003 the Olbia District Court acquitted M. C. and L. C. on the merits in respect of all the offences, with the exception of that of unlawful site development, the prosecution of which was declared statute-barred.
70. Having regard to the entry into force of Regional Law no. 11 of 1992 (see paragraph 52 above) and the new minimum distance from the sea introduced therein, the District Court took the view that the municipality of Golfo Aranci should never have issued the building permits and that the previously issued authorisations could not legitimise the situation. The building permits were thus in breach of the law or, at least, ineffective ( inefficaci ). Although erected in accordance with the permits issued by the municipal authority, the constructions were thus incompatible with the statutory provisions and their existence thus constituted unlawful site development. In addition, the sale of the housing units to individuals cast doubt on their continued use for tourist-hotel purposes and this change of purpose also placed the buildings in breach of the law. In conclusion, the District Court ordered the confiscation of the property previously placed under a restraining order and the transfer of ownership to the municipality of Golfo Aranci within the meaning of section 19 of Law no. 47 / 1985.
71. As regards, in particular, the charge of fraud, the court took the view that the offence was not made out because there had been no financial loss to the municipality, since the cost of the infrastructure work remained the same even if the intended use changed. In addition, the mental element, that is to say the existence of intent to defraud the municipality, had not been proved in view of the fact that the sale had been carried out as a result of the financial difficulties of R.I.T.A. Sarda S.r.l. Moreover, the court pointed out that the municipal authority had issued the company with a favourable opinion as regards the sale of the buildings.
72. In a judgment of 11 October 2004 the Cagliari Court of Appeal upheld the Olbia District Court ’ s finding of dismissal ( non doversi procedere ) in respect of the offence which was statute-barred and reiterated that the municipality of Golfo Aranci should not have issued the building permits, which were illegal and in any event ineffective. The constructions erected were de facto incompatible with the regional legislation prohibiting them. In addition, between March 1995 and November 1997 most of the housing units had been sold off, thus changing their intended use. As to the charge of fraud, the Court of Appeal upheld the acquittal of the applicant companies ’ legal representatives on the basis of the same considerations, on this point, as those of the District Court. It confirmed the confiscation order.
73. Mr M .C. and Mr L .C. appealed on points of law but their appeal was dismissed by the Court of Cassation in a judgment of 15 February 2007.
74. According to the information provided by the Government, on 29 July 2015 the individual purchasers of the confiscated property still retained full possession. Shortly before that, on 21 May 2015, a resolution of the municipality of Golfo Aranci had acknowledged the genuine interest of the community in keeping the confiscated complex, referring in particular to the possibility of using the housing to cope with situations of urgency in the event that the local authorities should decide to assign the use of the property, directly or indirectly, for rent by persons with low income.
C. Falgest S.r.l. and Mr Gironda
75. The company Falgest S.r.l. and Mr Filippo Gironda were the co ‑ owners, each with a 50% interest, of a plot of land at Testa di Cane and Fiumarella di Pellaro (Reggio di Calabria) with a total surface area of 11,870 sq. m. The land-use plan provided solely for the possibility of building hotel-type residential complexes for tourists on that land.
76. On 12 October 1994 the applicants applied for a building permit to erect a tourist residential complex consisting of forty-two houses and sports facilities.
77. On 15 September 1997 the municipality of Reggio di Calabria issued the building permit.
78. After verification by the municipality, a number of variations from the plan were noted. The municipality ordered the suspension of the work on 26 January 1998.
79. On 29 January 1998 the applicants filed an amended plan ( variante in corso d ’ opera ), which provided for fewer houses ( forty instead of forty ‑ two ) and restricted the construction area. This amended plan sought to regularise the work as already carried out, within the meaning of Law no. 47/1985.
80. On 10 February 1998 the mayor of Reggio di Calabria cancelled the order suspending the work on the ground that the discrepancies in relation to the initial construction project could be regularised by means of the amended plan submitted in respect of ongoing work under section 15 of Law no. 47/1985.
81. On 1 October 1998 the inspector of the municipality of Reggio di Calabria noted that the work was in conformity with the amended plan. The work was pursued.
82. In 2002 the public prosecutor of Reggio di Calabria opened an investigation in respect of Mr Gironda, in his capacity as co-owner of the property, and five others : a director of the company, two signatories to the development project and two foremen. They were all suspected of committing a number of offences, in particular that of unlawful site development within the meaning of section 20 of Law no. 47/1985.
83. In a judgment of 22 January 2007 the Reggio di Calabria District Court acquitted all the defendants on the merits ( perché il fatto non sussiste ) in respect of all the charges, except for the offence of unlawful site development, the prosecution of which it declared statute-barred. The court noted that the project had provided for the construction of residences for hotel-type tourist accommodation. However, the structural specifications of the buildings ( caratteristiche strutturali ) and the evidence suggested that the real purpose of the project was the sale of houses to individuals, thus casting doubt on the intended hotel-type tourist use. This change of purpose rendered the site development unlawful. In conclusion, the court ordered the confiscation of the land and buildings and the transfer of the property to the municipality of Reggio di Calabria under section 19 of Law no. 47 of 1985.
84. In a judgment of 28 April 2009 the Reggio di Calabria Court of Appeal acquitted the applicants on the merits ( perché il fatto non sussiste ) in respect of all the charges, including that of unlawful site development. It revoked the confiscation of the property and ordered its return to the owners.
85. The Court of Appeal took the view, in particular, that the approved project was compatible with the land-use plan and the planning regulations. Given that there had been no preliminary or final contract of sale, there was no evidence of any change in the purpose of the constructions and therefore no unlawful development.
86. In a judgment of 22 April 2010, deposited in the Registry on 27 September 2010, the Court of Cassation quashed the judgment of the Court of Appeal without remitting it, finding that the change in purpose of the constructions was proved by statements made by third parties and by documents in the file. For the Court of Cassation, the offence of unlawful site development (the prosecution of which was statute-barred, entailing the dismissal of the case ) had thus indeed been knowingly committed by the defendants. Consequently, the property in question again became subject to the confiscation order made at first instance by the Reggio di Calabria District Court. The acquittals were maintained.
3. Current state of confiscated property
87. According to an expert ’ s report of 5 May 2015, the expert having been appointed by the applicants, the complex confiscated from the latter was in an advanced state of abandonment and neglect. In the applicants ’ submission, the municipal authority, which was the owner of the property, had not carried out any work to keep the open spaces maintained.
II. RELEVANT DOMESTIC LAW AND PRACTICE
A. General principles of criminal law
88. Article 27 § 1 of the Italian Constitution provides that “criminal liability is personal”. The Constitutional Court has affirmed on several occasions that there can be no strict liability in criminal matters (see, inter alia, Constitutional Court judgment no. 1 of 10 January 1997 ). Article 27 § 3 of the Constitution provides : “Punishments ... shall aim at rehabilitating the convicted person ”.
89. The second and third paragraphs of Article 25 of the Constitution provide that “no punishment may be inflicted except by virtue of a law in force at the time the offence was committed”, and that “no restriction may be placed on a person ’ s liberty save for as provided by law”.
90. Article 1 of the Criminal Code states that “no one may be punished for an act which is not expressly defined by law as constituting a criminal offence, under any penalty which is not prescribed by law”. Article 199 of the Criminal Code on security measures provides that no one may be subject to security measures which are not provided for by law, or in cases other than those provided for by law.
91. The first paragraph of Article 42 of the Criminal Code provides that “no one may be punished for an act or omission constituting a criminal offence provided by law if, in committing the acts, the perpetrator did not have the corresponding awareness and intent [ coscienza e volontà ] ”. The same rule is set out in section 3 of Law no. 689 of 25 November 1989 as regards administrative offences.
92. Article 5 of the Criminal Code provides that “no one may plead ignorance of criminal law in order to obtain exemption from liability”. The Constitutional Court ( in judgment no. 364 / 1988) ruled that this principle did not apply in the case of an unavoidable error, so that the provision must henceforth be read as follows: “no one may plead ignorance of criminal law in order to obtain exemption from liability, save in the case of an unavoidable error”. The Constitutional Court stated that the possible origin of any objectively unavoidable error regarding criminal law was the “absolute obscurity of the law”, the “erroneous assurances” of persons institutionally responsible for assessing the lawfulness of the acts to be performed, or the “extremely chaotic” state of case-law.
B. Rules on land planning and development
93. The protection of areas of outstanding natural beauty ( bellezze naturali ) is regulated by Law no. 1497 of 29 June 1939, which lays down the State ’ s right to impose “special landscape protection orders” ( vincolo paesaggistico ) in respect of the sites to be protected.
94. Under Presidential Decree no. 616 of 24 July 1977 the State delegated administrative functions regarding the protection of exceptional natural sites to the regional authorities.
1. Law no. 431 of 8 August 1985 (emergency provisions regarding sites of major environmental importance)
95. Section 1 of this Law imposes limitations geared to protecting landscapes and the environment within the meaning of Law No. 1497/ 1939 ( vincolo paesaggistico e ambientale ), including on coastal areas located at less than 300 metres from the surf line, even for land rising directly above the sea. This provision imposes a requirement to apply to the competent authorities for a notice of compliance with landscape protection for any development project affecting the relevant areas. Such limitations do not apply to land included in “ urban zones A and B ”, that is to say town centres and adjacent areas. In the case of land located in other zones, the limitations do not apply to plots included in any “ implementation plan ”.
96. This legislation placed the entire territory of Italy under general protection. Anyone failing to comply with the constraints set out in section 1 is punishable under the terms of section 20 of Law no. 47 / 1985 ( sanctions in land planning matters; see paragraph 1 04 below).
2. Law no. 10 of 27 January 1977 (rules on the development potential of land )
97. Section 13 of this Law provides that general land-use plans may be implemented subject to the existence of an implementation plan or scheme ( piano o programma di attuazione ). Such implementation schemes must delimit the zones in which the provisions of the general land-use plans are to be implemented.
98. It is incumbent on the regional authorities to decide on the content of implementation plans and the procedure for establishing them, and to draw up a list of towns and cities exempted from the requirement to adopt such plans.
99. Where a town or city is required to adopt an implementation plan, building permits can be issued by the municipal authority only if they cover an area included in the implementation scheme (with exceptions as prescribed by law), and provided that the project complies with the general land-use plan.
100. Under section 9, towns and cities exempted from the requirement to adopt an implementation plan may issue building permits.
3. Apulia Regional Law no. 56 of 31 May 1980
101. Section 51 (f) of this Law provides:
“... Pending the entry into force of the territorial land-use plans ...
(f) It is forbidden to build at a distance of less than 300 metres from the surf line or from the highest point overhanging the sea.
Where a land-use plan ( strumento urbanistico ) is already in force or has already been adopted at the time of entry into force of the present law, building is only possible in zones A, B and C within inhabited centres and tourist facilities. Furthermore, it is permissible to construct public infrastructure and to complete industrial and small-business installations whose construction was already under way when this law came into force.”
4. Law no. 47 of 2 8 February 1985 ( rules on the oversight of development and building activities, sanctions, restitution and regularisation of constructions )
102. Section 18, as in force at the material time, provided as follows:
“Unlawful site development by means of construction obtains in cases where building work commences on a given plot of land involving development that is inconsistent with land-use plans [ strumenti urbanistici ] which are already in force or have been adopted, or is at least incompatible with national or regional legislation, or otherwise does not have the requisite authorisation ...; and also where the development is carried out by dividing up and selling ( or otherwise fragmenting ) the land, creating plots which, by their very nature, ... clearly demonstrate their actual intended use. ... ”
103. Section 19 of this law provides for the confiscation of unlawful constructions and unlawfully developed land, in cases where the criminal courts have delivered a final judgment as to the unlawfulness of the development. The criminal judgment is immediately entered in the land register.
104. Section 20 provides that in the event of unlawful site development – as defined in section 18 of the same law – the corresponding criminal penalties are a maximum two-year prison sentence and a fine of up to 100 million Italian lire (approximately EUR 51 ,646 ). Confiscation is not mentioned.
5. The Construction Code (Presidential Decree no. 380 of 6 June 2001)
105. Presidential Decree no. 380 of 6 June 2001 ( Testo unico delle disposizioni legislative e regolamentari in materia edilizia ) codified previously existing provisions in the field of planning permission in particular.
106. Article 30 § 1 of the Construction Code, which incorporates section 18(1) of Law no. 47/1985, unamended, provides as follows:
“Unlawful site development obtains in cases where building work commences on a given plot of land involving a development project which is incompatible with planning regulations (that is to say the local development plan, land-use plan or any other provision governing territorial and urban planning at the level of a given territory [ strumenti urbanistici ]) ... or otherwise lacks the requisite authorisation ...; and also where the development project is implemented by dividing up and selling or otherwise fragmenting the land, creating plots which, by their very nature, ... clearly demonstrate their actual intended use.”
107. Under Article 30 §§ 7 and 8 of the Construction Code, which incorporates, unamended, section 18 (7) and (8) of Law no. 47 / 1985, in the case of site development without municipal authorisation, the municipal authority must issue an order suspending all work on the plots of land in question. The authority in question must also ensure that the land and the constructions thereon cannot be the subject of any transaction. The suspension order must be entered in the land register. Unless the suspension decision is revoked within the ensuing ninety days, the developed land passes automatically and free of charge into the estate of the municipality on whose territory the site development has been carried out. The municipal authority must arrange for the subsequent demolition of the constructions. Should that authority fail to act, the regional authority may order the measures it deems necessary, and must simultaneously inform the public prosecutor ’ s office with a view to possible criminal proceedings.
108. At the time of the codification, sections 19 and 20 of Law no. 47/1985 were merged without amendment into a single provision, namely Article 44 of the Code, under the following heading: “Art. 44 (L) ‑ Criminal sanctions ...”. Article 44 § 2 of the Construction Code incorporates, unamended, section 19 of Law no. 47 / 1985 as amended by Article 3 of Legislative Decree no. 146 of 23 April 1985, which was converted into Law no. 298 of 21 June 1985. Article 44 provides:
“ 2. In a final judgment [ sentenza definitiva ] establishing that there has been unlawful site development, the criminal court shall order the confiscation of the unlawfully developed land and the illegally erected buildings. Following the confiscation, the land shall pass into the estate of the municipality on whose territory the site development has been carried out. The final judgment shall constitute a document of title for immediate entry in the land register .”
C. The offence of unlawful site development
109. According to the definition in section 18(1) of Law no. 47/1985, and Article 30 § 1 of the Construction Code, unlawful site development may take four different forms:
(a) “ material ” unlawful site development ( Lotizzazione abusiva materiale );
(b) “contractual” ( negoziale ) unlawful site development ( Lottizzazione abusiva negoziale );
(c) “hybrid” unlawful site development ( Lottizzazione cosiddetta mista ); and
(d) site development involving a change of intended use of buildings ( Lotizzazione abusiva mediante mutamento della destinazione d ’ uso di edifici ).
(a) “Material” unlawful site development
110. The offence of “ material ” unlawful site development refers to an urban development project involving the construction of buildings or amenities, or urban development projects liable to cause a given territory to be used in a different manner from that laid down in the planning regulations. There are two different forms of unlawful site development in this category, depending on the types of regulations breached:
( i ) procedural “ material ” unlawful site development, referring to a development project which is unauthorised or incompatible with the authorisation granted; or
( ii ) substantive “ material ” unlawful site development, where the development project has been authorised by the authorities (the municipality or possibly the regional council ) but such authorisation is illegal on grounds of incompatibility with planning regulations and regional or national legislation.
111. Prior to judgment no. 5115 (2002) of the plenary Court of Cassation ( Salvini and Others ), there was some controversy as to the notion of the substantive type of “ material ” unlawful site development. According to a line of Court of Cassation case-law, this type of development was not unlawful where it had been authorised by the competent authorities ( Court of Cassation, 1988, Brunotti, and Court of Cassation, no. 6094, 1991, Ligresti and Others ). Land planning was regulated by a series of administrative acts which, on the basis of the broader land-use plan, led to the adoption of decisions on individual cases. The criminal courts had no power to waive the implementation of the administrative decision authorising individual projects, save where it was deemed non-existent or invalid ( Court of Cassation, Ligresti and Others, cited above). In so far as the unlawful site development encroached on the powers of the public authorities in matters of land planning, the offence was made out where a new developed area was created without any preventive supervision on the part of the municipality ( Court of Cassation, 1980, Peta, and Court of Cassation, Brunotti, cited above ). In conclusion, under this approach the development was unlawful only where it was not authorised, and not where, despite planning permission, the activity was deemed inconsistent with other planning regulations.
112. In its judgment no. 5115 of 2002, however, the plenary Court of Cassation rejected this line of case-law in favour of a second approach, which is now well established, whereby the offence is made out not only where the construction is under way in the absence or in breach of any planning permission, but also in the case of permission which is not in conformity with other planning regulations, in particular at regional or national level ( “ substantive ” material offence of unlawful site development). According to that line of case-law, the “ procedural ” material offence of unlawful site development should be regarded as a residual hypothesis in relation to “contractual” unlawful site development.
(b) “Contractual” unlawful site development
113. The offence of unlawful site development is also made out where a development project is implemented by dividing up and selling (or otherwise fragmenting ) land, creating plots which, by their very nature, clearly demonstrate their actual intended use, which is different from that provided for by the planning regulations. In this scenario, the development project exclusively stems from a legal procedure rather than a physical activity (building work) ( Court of Cassation, 2009, Quarta ). Where legal acts are combined with building activity, the status of “contractual” development shifts to that of “hybrid” unlawful site development (see Court of Cassation, no. 618, 2012). Contractual unlawful site development is an offence which involves multiple perpetrators, that is to say, at least the vendor and the purchaser of the plots of land.
(c) “Hybrid” unlawful site development
114. This type of unlawful site development comprises the legal activity of dividing up a piece of land into plots and the ensuing building activity ( Court of Cassation, no. 6080, 2008, Casile; Court of Cassation no. 45732, 2012, Farabegoli; and Court of Cassation, no. 3454, 2013, Martino ).
(d) Unlawful site development by changing the intended use of buildings
115. Lastly, case-law has included in the concept of unlawful development the scenario of changing the intended use of buildings erected in a zone already covered by an approved site development plan. The change may, for instance, involve splitting up a tourist/hotel complex and selling the units separately as private dwellings. Such a change of intended use must be such as to affect the land-use plan. This mode of development fits into either the material or the contractual category of site development depending on whether the emphasis is placed on the existence of constructions ( material element ) or on the manner in which the development project is implemented, that is to say by a legal act (see, to that effect, Court of Cassation, no. 20569, 2015). Even though this mode of development does not involve unauthorised building activity, case-law considers that it is one of the situations provided for in Article 30 of the Construction Code, given that the separate sale of buildings necessarily entails dividing up the land on which they are built ( Farabegoli, cited above ).
2. The legal interests affected by the unlawful site development
116. According to the Court of Cassation, in creating the offence of unlawful site development the legislature intended to protect two different interests: on the one hand, it wished to ensure that land development proceeded under the supervision of the public authorities responsible for land-use planning (in particular by criminalising the procedural material and contractual offences of unlawful site development ) ( Court of Cassation, Salvini and Others, cited above; Court of Cassation, no. 4424, 2005; and Consiglio di Stato, no. 5843, 2003), thus avoiding the risk of infrastructure development that is unplanned or different from that originally planned ( Court of Cassation, no. 27289, 2012, Dotta ); on the other hand, it sought to guarantee that the land development complies with planning regulations (this applies to development projects which have been authorised but in a manner incompatible with other laws, that is to say the substantive material offence of unlawful development ) ( Court of Cassation, Salvini and Others, cited above; Court of Cassation, no. 4424, cited above; and Consiglio di Stato, no. 5843, cited above ).
117. The Court of Cassation has explicitly stated that the offence of unlawful development constitutes an offence of endangerment. In one particular case, drawing a parallel with the offence of unlawful erection of a building, it referred to an abstract danger, that is, an irrebuttable presumption of danger, justifying that the perpetrator should be penalised regardless of the existence of an actual danger (Court of Cassation, no. 20243, 2009, De Filippis ).
D. Confiscation as a sanction for unlawful site development
118. The Court of Cassation has always regarded confiscation as a “sanction”, and in fact initially classified it as a criminal sanction. That meant that it could be applied solely in respect of the property of an accused who was found guilty of the offence of unlawful site development, in accordance with Article 240 of the Criminal Code ( Brunotti, cited above; Plenary Court of Cassation, 1990, Cancilleri; and Ligresti, cited above ).
119. In a judgment of 12 November 1990 the Court of Cassation ( Licastro case) found that confiscation was a mandatory administrative sanction, unconnected to a criminal conviction. It could therefore, in that court ’ s view, be imposed on third parties when it stemmed from a situation ( construction or site development) which was factually unlawful, regardless of the existence of a mental element. This meant that confiscation could be ordered even if the perpetrator had been acquitted on the grounds of a lack of any mental element (“ perché il fatto non costituisce reato ”). It could not be ordered if the perpetrator had been acquitted on the grounds that the charge had no material basis (“ perché il fatto non sussiste ”).
120. This line of case-law has frequently been followed ( Court of Cassation, 1995, Besana; Court of Cassation, no. 331, 15 May 1997, Sucato; Court of Cassation, no. 3900, 23 December 1997, Farano; Court of Cassation, no. 777, 6 May 1999, Iacoangeli; and Court of Cassation, 25 June 1999, Negro ). The Constitutional Court acknowledged the administrative nature of confiscation in its decision no. 187 of 1998.
121. Despite the approach adopted by the Court in the Sud Fondi S.r.l. and Others decision of 2007 ( Sud Fondi S.r.l. and Others v. Italy (dec.), no. 75909/01, 30 August 2007 ), as confirmed by the 2009 Sud Fondi S.r.l. and Others v. Italy judgment ( merits, cited above) and the 2013 Varvara v. Italy judgment (no. 17475/09, 29 October 2013), the Court of Cassation and the Constitutional Court have reiterated the position that the impugned confiscation is an administrative sanction ( Court of Cassation, no. 42741, 2008; Plenary Court of Cassation, no. 4880, 2015; and Constitutional Court, no. 49, 2015). Nevertheless, these courts have accepted that the criminal court must order such measures with regard for the standards of protection laid down in Articles 6 and 7 of the Convention (see, for example, Court of Cassation, Ord., no. 24877, 2014). The Court of Cassation has explicitly acknowledged the punitive ( afflittivo ) nature of confiscation ( Court of Cassation, no. 39078, 2009, and Court of Cassation, no. 5857, 2011 ). In its judgment no. 21125 of 2007 it held that the primary function of confiscation was deterrence.
122. Consequently, the sanction is authorised even where the criminal proceedings for unlawful site development do not lead to the “formal” conviction of the accused (see Court of Cassation, judgment no. 39078, 2009, and Constitutional Court judgment no. 49, 2015 ), unless the accused has had nothing to do with the perpetration of the offence and his good faith has been formally ascertained ( Court of Cassation, no. 36844, 2009).
2. Role of the criminal court in the application of the sanction
123. Confiscation for unlawful site development is a measure which can be ordered by an administrative authority (the municipality or, failing that, the region) or by a criminal court.
124. The jurisdiction of the criminal courts in matters of confiscation is strictly tied to their power to establish the criminal liability of individuals in cases of unlawful site development. Consequently, where the offence of unlawful site development becomes statute-barred before the commencement of the criminal proceedings, a court which subsequently dismisses the proceedings cannot order any confiscation measure. It may only do so if the limitation period expires after the commencement of criminal proceedings.
125. In the case of an unlawful site development ( the procedural material offence or the contractual offence ) which has been carried out in the absence or in breach of planning permission, two different approaches have emerged in domestic case-law. Under the first, the criminal court replaces the administrative authority ( svolge un ruolo di supplenza : see Court of Cassation, no. 42741, 2008; Court of Cassation, no. 5857, 2011; and Court of Cassation, decision no. 24877, 2014).
126. Under the other approach, the confiscation provided for in Article 44 of the Construction Code is the expression of a punitive ( sanzionatorio ) power assigned by law to the criminal court, that power being neither secondary or alternative but independent from that of the administrative authorities. According to the Court of Cassation, the idea that the criminal court replaces the administrative authority should now be considered obsolete in matters of planning, because the criminalisation of unlawful site development is intended to guarantee territorial protection ( Court of Cassation, no. 37274, 2008, Varvara, and Court of Cassation, no. 34881, 2010, Franzese ).
127. Moreover, in the case of the substantive material offence of unlawful site development, the criminal court ’ s role is not merely to ensure that no site development is conducted in the absence or in breach of planning permission, but also to ascertain that the development, whether authorised or not, is compatible with norms of a higher rank in relation to the authorisation decision. If it wishes to order confiscation, a criminal court must ascertain that the material element of the offence of unlawful site development is made out, which means that it must establish the existence of all the constituent elements of the unlawful conduct. Under section 18 of Law no. 47 of 1985, the notion of unlawful conduct is not confined to activities carried on without authorisation, but also includes acts in breach of planning regulations and of regional and national norms ( Court of Cassation, Salvini and Others, cited above ). In this context, the Court of Cassation has clarified the relationship between the administrative decision authorising site development and the power of the criminal court to make a finding of unlawful site development and to order confiscation. The Court of Cassation has explained that where the planning permission does not comply with other planning regulations, the criminal court may find against the perpetrator of the development and order confiscation without the need for any administrative assessment of the permission granted. Given that the criminal court is not empowered to declare the permission null and void, it will remain valid ( Court of Cassation, Salvini and Others, cited above; Court of Cassation, Varvara, cited above; and Court of Cassation, no. 36366, 2015, Faiola ).
3. Effects on confiscation of subsequent regularisation of site development (sanatoria)
128. Where the unlawful site development has been carried out in the absence of, or in breach of, planning permission, the administrative authority can prevent confiscation being ordered by the criminal court only if all the following conditions are met: ( a) the site development has subsequently been regularised ( sanato ) by the municipal authority; ( b) the act of regularisation is lawful; and ( c) the subsequent planning permission (or the amendment of the land-use plan) is issued before the criminal conviction becomes final. Thus, once the conviction has become final, the confiscation measure can no longer be revoked, even in the case of subsequent regularisation of the development by the administrative authority (Court of Cassation, no. 21125, 2007, Licciardello; Court of Cassation, no. 37274, 2008, Varvara and Franzese, cited above ).
129. On the other hand, in the case of all unlawful site development projects which have been authorised but which infringe other rules of a higher order – those cases, according to the Court of Cassation, representing the most frequent kind (substantive “ material ” unlawful site development) ‑ the administrative authority has no power of regularisation. In such cases the criminal court acts completely autonomously and independently from the administrative authority ( Court of Cassation, nos. 21125 of 2007, 39078 of 2009, 34881 of 2010 and 25883 of 2013).
E. Constitutional Court case-law
130. In its judgments nos. 348 and 349 of 22 October 2007 the Constitutional Court clarified the Convention ’ s rank in the hierarchy of sources of domestic law. Article 117 of the Constitution, as amended by Constitutional Law no. 3 of 18 October 2001, requires the legislature to comply with international obligations. Thus the Constitutional Court took the view that the Convention was a norm of intermediate rank between ordinary statute law and the Constitution and that it had to be applied as interpreted by the European Court of Human Rights.
131. Consequently, according to the Constitutional Court, it was for the ordinary domestic court to interpret the domestic rule in conformity with the Convention and with the Court ’ s case-law but, when such an interpretation was impossible or the court had some doubt as to the compatibility of the domestic rule with the Convention, the court was required to refer a question of constitutionality.
132. In January and May 2014 two questions of constitutionality were referred to the Constitutional Court, by the Teramo District Court and the Court of Cassation respectively, on the subject of Article 44 § 2 of Legislative Decree no. 380/2001 following the Varvara v. Italy judgment (no. 17475/09, 29 October 2013).
133. In its judgment no. 49 of 26 March 2015, the Constitutional Court found as follows (translation from the court ’ s website) :
“6.– The question raised by the Court of Cassation along with that raised by the Tribunale di Teramo is also inadmissible on the grounds that both are based on an interpretative assumption which is mistaken on two counts.
Whilst differing as regards the effects which the Varvara judgment supposedly generates within the national legal order, both referring courts are convinced that in making this judgment the Strasbourg Court laid down a principle of law which was both innovative and binding on the courts required to apply it by adopting a new approach to the interpretation of Article 7 ECHR.
The first misunderstanding attributable to the referring courts relates to the meaning which they have inferred from the judgment of the Strasbourg Court.
Ultimately, the European Court is alleged to have asserted that, once a sanction has been classified under Article 7 ECHR, and thus once a ‘ penalty ’ has been deemed to fall within its scope, it can only be imposed by a criminal court at the same time as a conviction for an offence. As a result, confiscation in accordance with spatial planning provisions – which until now has continued to operate as an administrative penalty under national law, which may be imposed first and foremost by the public administration, albeit buttressed by the guarantees provided by Article 7 ECHR – is claimed to have been incorporated in full into the area of criminal law or, to put it differently, the substantive protection guaranteed by Article 7 is claimed to have been supplemented by a further formal safeguard consisting in the reservation of competence over the application of the measure comprising a ‘ penalty ’ to the criminal courts, thus meaning that they can only be imposed at the same time as a conviction.
This is claimed to result in a corollary: as soon as the administrative offence, which the legislator distinguishes with broad discretion from a criminal offence (see Order no. 159 of 1994; followed by Judgments no. 273 of 2010, no. 364 of 2004 and no. 317 of 1996; and Orders no. 212 of 2004 and no. 177 of 2003), was capable of providing self-standing criteria for classifying the ‘ offence ’ under the ECHR, it would be attracted into the scope of the criminal law of the contracting state. This accordingly supposedly results in a merger between the concept of criminal sanction on national level and that on European level. As a result, the area of criminal law is claimed to have expanded beyond the discretionary evaluations of legislators, even in cases involving sanctions that, whilst minor, would still constitute ‘ penalties ’ for the purposes of Article 7 ECHR on other grounds (Grand Chamber, judgment of 23 November 2006 in Jussila v. Finland ).
In asserting this argument, the referring courts do not appreciate that its compatibility both with the Constitution and with the ECHR itself, as interpreted in the rulings of the Strasbourg Court, would be questionable.
6.1.– ... As is known, since its judgments of 8 June 1976 in Engel [and Others] v. the Netherlands and of 21 February 1984 in Öztürk v. Germany, the Strasbourg Court has developed specific criteria for establishing when a sanction can be classified as a ‘ penalty ’ within the meaning of Article 7 ECHR precisely in order to ensure that the wide-scale processes of decriminalisation which have been launched by the member states since the 1960s do not have the effect of depriving offences of the substantive guarantees assured by Articles 6 and 7 ECHR after decriminalisation (see Öztürk [ cited above ] ).
Thus, the discretion of national legislators to stem the proliferation of the criminal law through the recourse to regimes of sanctions considered to be more appropriate, with reference both to the nature of the sanction imposed and the simplified procedures applicable during the initial administrative stage in which the sanction is imposed, has not been called into question. The aim has rather been to avoid this route from resulting in the dissipation of the bundle of protection which had historically been associated with the development of criminal law, the protection of which ECHR is intended to further.
It is within this twin-track approach – under which on the one hand the state ’ s criminal policy choices are not opposed but where on the other hand the detrimental effects of those policies on individual guarantees are kept in check – that the nature of the ECHR is vividly demonstrated as an instrument charged with looking beyond the aspects related to the formal classification of an offence, without however impinging upon the legislative discretion of the states but rather assessing the substance of the human rights in play and safeguarding their efficacy.
It is in fact a consolidated principle that the ‘ penalty ’ may also be applied by an administrative authority, albeit upon condition that an appeal may be lodged against the decision before a court of law offering the guarantees provided for under Article 6 ECHR, even if it does not necessarily exercise criminal jurisdiction (see most recently the judgment of 4 March 2014 in Grande Stevens and Others v. Italy, with reference to a sanction considered to be serious). It has been added that the ‘ penalty ’ may result from the completion of an administrative procedure even without any formal declaration of guilt by a criminal court (see the judgment of 11 January 2007 in Mamidakis v. Greece ).
6.2.– ... Expressions of this type, which are linguistically open to an interpretation that does not require a finding of responsibility exclusively in the form of a criminal conviction, are entirely consistent in logical terms with the Strasbourg Court ’ s function of perceiving the violation of the human right in its tangible dimension, irrespective of the abstract formula used by the national legislator to classify the conduct.
This Court must conclude that the referring courts were not only not required to infer the principle of law on which the current interlocutory questions of constitutionality are based from the Varvara judgment but should also have read the judgment as having the opposite effect. In fact, this judgment is compatible with the text of the decision and the facts of the case ruled upon, which is more in keeping with the traditional logic underpinning the case-law of the European Court, and in any case respects the constitutional principle of subsidiarity in the area of criminal law, as well as the legislative discretion over the policy on the punishment of offences, as the case may be opting to classify the sanction as administrative in nature (for internal purposes).
Within the perspective of the Strasbourg Court, the guarantees which Article 7 ECHR offers in relation to confiscation in accordance with spatial planning provisions are certainly mandated by the excessive result which such a measure may lead to beyond the restoration of the breach of the law (see the judgment of 20 January 2009 in Sud Fondi S.r.l. and Others v. Italy ), which in turn results from the manner in which that institute is configured under Italian law.
However, they do not detract from the possibility that the power to impose administrative sanctions, which is the task of such a measure prior to any involvement by the criminal courts, may indeed be linked to the public interest in the ‘ construction planning of the territory ’ (see Judgment no. 148 of 1994), the furtherance of which is a task for the public administration. It is important to add that this interest is by no means foreign to the ECHR perspective (see the judgment of 8 November 2005 in Saliba v. Malta ).
As things currently stand, unless there are any further developments in the case-law of the European court (following the referral to the Grand Chamber of disputes relating to national confiscations based on spatial planning provisions in applications no. 19029/11, no. 34163/07 and no. 1828/06), the argument proposed by the referring courts as a starting point for their doubts concerning the constitutionality of the contested provisions that the Varvara judgment may be unequivocally interpreted to the effect that confiscation in accordance with spatial planning provisions may only be ordered in parallel with a conviction by the courts for the offence of unlawful parcelling must accordingly be concluded to be mistaken.
7.– ... It is not always immediately clear whether a certain interpretation of the provisions of the ECHR has become sufficiently consolidated at Strasbourg, especially in cases involving rulings intended to resolve cases that turn on highly specific facts, which have moreover been adopted with reference to the impact of the ECHR on legal systems different from that of Italy. In spite of this, there are without doubt signs that are capable of directing the national courts during their examination: the creativity of the principle asserted compared to the traditional approach of European case-law; the potential for points of distinction or even contrast from other rulings of the Strasbourg Court; the existence of dissenting opinions, especially if fuelled by robust arguments; the fact that the decision made originates from an ordinary division and has not been endorsed by the Grand Chamber; the fact that, in the case before it, the European court has not been able to assess the particular characteristics of the national legal system, and has extended to it criteria for assessment devised with reference to other member states which, in terms of those characteristics, by contrast prove to be little suited to Italy.
When all or some of these signs are apparent, as established in a judgment which cannot disregard the specific features of each individual case, there is no reason to require the ordinary courts to use the interpretation chosen by the Strasbourg Court in order to resolve a particular dispute, unless it relates to a ‘ pilot judgment ’ in a strict sense.”
F. Non-conviction- based confiscation in Italian law
134. Confiscation is generally a criminal-law measure under Article 240 of the Criminal Code. In principle, the application of this measure, particularly as regards the confiscation provided for in the first paragraph of that Article, depends on the defendant ’ s conviction. There are other forms of non-conviction - based confiscation ( confisca senza condanna ) in Italian law such as the direct confiscation of proceeds of crime ( Court of Cassation, no. 31617, 2015, Lucci ); preventive confiscation under section 2 ( 3 ) of Law no. 575 of 31 May 1965 and Article 24 of the Anti - mafia Code; confiscation related to contraband offences under Article 301 of Presidential Decree no. 43/1973, as amended by section 11 of Law no. 413/1991 ( Court of Cassation, no. 8330, 2014, Antonicelli and Others ); confiscation of animals ( section 4 of Law no. 150 of 1992, see Court of Cassation, no. 24815, 2013); and the confiscation of works of art and cultural items (Article 174 § 3 of Legislative Decree no. 42 of 2004, see Court of Cassation, no. 42458, 2015, Amalgià ).
135. Under Article 676 of the Code of Criminal Procedure, any third parties in relation to criminal proceedings which might have repercussions for their property are entitled to seek revocation of the confiscation measure in accordance with Articles 665 et seq. of that Code.
136. Under Article 31 § 9 of the Construction Code, the criminal court orders the demolition of the illegal building itself as a penalty for the offence of unlawful construction.
137. Law no. 102 of 3 August 2009 amending Legislative Decree no. 78 of 2009 introduced a provision into the latter, Article 4 § 4 ter, which laid down, in addition to the lifting of the confiscation measure ordered by the criminal court, the conditions in which compensation was awarded for any damage sustained as a result of a confiscation that was found to constitute a violation of the Convention by the European Court of Human Rights.
138. Article 579, paragraph 3, of the Code of Criminal Procedure provides that where confiscation is imposed as a security measure under domestic law, it may be appealed against in accordance with the ordinary rules applying to criminal liability.
III. RELEVANT INTERNATIONAL LAW
139. Different types of confiscation procedure have been created to ensure greater efficiency in the fight against cross-border crime, organised crime and other serious offences. The most important international law provisions on confiscation are Article 37 of the 1961 Single Convention on Narcotic Drugs, as amended by the 1972 Protocol thereto; Article 5 of the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances; Articles 77 § 2 ( b), 93 § 1 ( k) and 109 § 1 of the Rome Statute of the International Criminal Court, established in 199 8; Article 8 of the 1999 International Convention for the Suppression of the Financing of Terrorism; Article 12 of the 2000 United Nations Convention against Transnational Organised Crime; Article 31 of the 2003 United Nations Convention against Corruption; and Article 16 of the 2003 Convention of the African Union on Preventing and Combating Corruption.
140. A study of these international agreements reveals a general acceptance of the principle of confiscating the physical object of an offence ( objectum sceleris ), the instruments used to commit an offence ( instrumentum sceleris ), the proceeds of crime ( productum sceleris ) or other property of equivalent value ( “value confiscation ” ), proceeds which have been transformed or intermingled with other property, and any income or other benefits derived indirectly from proceeds. All of these confiscation measures depend on a prior conviction. Confiscation measures cannot be imposed on legal entities or individuals who are not parties to the proceedings, except in the case of third parties without a bona fide defence.
141. Non-conviction- based confiscation remains relatively exceptional in international law. Among the above-mentioned instruments, only Article 54 § 1 ( c) of the 2003 United Nations Convention against Corruption recommends that parties, for the purposes of mutual legal assistance, should consider taking such measures as may be necessary to allow confiscation of property without a criminal conviction in cases in which the offender cannot be prosecuted “by reason of death, flight or absence or in other appropriate cases”.
142. The Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime, which was opened for signature on 8 November 1990 in Strasbourg and which entered into force on 1 September 1993 (the “Strasbourg Convention”), defined confiscation as “a penalty or a measure, ordered by a court following proceedings in relation to a criminal offence or criminal offences resulting in the final deprivation of property”.
143. The parties to the Strasbourg Convention undertake in particular to make the laundering of proceeds of crime a criminal offence and to confiscate the instruments and proceeds, or property of an equivalent value. The Strasbourg Convention lays down specific grounds for refusal to acknowledge the decisions of the other signatory States concerning confiscation in rem or non-conviction- based confiscation, for example : “the action sought would be contrary to the fundamental principles of the legal system of the requested Party”; “the offence to which the request relates would not be an offence under the law of the requested Party”; “the request does not relate to a previous conviction, or a decision of a judicial nature or a statement in such a decision that an offence or several offences have been committed, on the basis of which the confiscation has been ordered or is sought”.
144. These obligations were maintained in the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism, which was opened for signature on 16 May 2005 in Warsaw and which entered into force on 1 May 2008 ( the “ Warsaw Convention” ). Intended to supersede the Strasbourg Convention, it has been ratified by twenty-eight States, including fifteen member States of the European Union.
145. As regards non-conviction - based confiscation. Article 23 § 5 requires States to “co- operate to the widest extent possible ” for the execution of measures equivalent to confiscation which are not criminal sanctions, in so far as such measures are ordered by a judicial authority in relation to a criminal offence.
146. In view of the heterogeneity of domestic legislation, some international organisations such as the OECD ’ s Financial Action Task Force (FATF), the International Bank for Reconstruction and Development and the World Bank, have produced good practice guides and recommendations. The FATF Recommendations, entitled “ International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation” ( updated October 2016) include: recommendation no. 4, which states that countries should consider adopting measures that allow non ‑ conviction - based confiscation “to the extent that such a requirement is consistent with the principles of their domestic law”; and recommendation no. 38, which calls on States to ensure they have the authority to respond to requests made on the basis of non-conviction-based confiscation proceedings and related provisional measures, unless this is inconsistent with fundamental principles of their domestic law.
147. In the European Union context, a Council Framework Decision of 26 June 2001 ( no. 2001/500 /JHA ), on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime, first imposed on States an obligation not to limit the application of the Strasbourg Convention in respect of offences which are punishable by deprivation of liberty for a maximum of more than one year, and an obligation to allow the confiscation of property of a value corresponding to that of the instrumentalities and proceeds of crime.
148. A subsequent Council Framework Decision of 24 February 2005 (2005/212/JHA), on confiscation of crime-related proceeds, instrumentalities and property, provided for ordinary confiscation, including value confiscation, in respect of all offences subject to imprisonment of a maximum period of one year, and confiscation of some or all assets held by a person who had been found guilty of specified serious offences, where they had been “ committed within the framework of a criminal organisation ”, without establishing a link between the assets deemed to be of criminal origin and a specific offence. The latter approach was characterised as “extended powers of confiscation”.
The Framework Decision provided for three different series of minimum requirements from which the member States could choose in order to exercise such extended powers. When transposing the Framework Decision they chose different options, thus resulting in extended confiscation mechanisms of varying content depending on the domestic system.
149. EU Directive no. 2014/42 of the European Parliament and of the Council of 3 April 2014, on the freezing and confiscation of instrumentalities and proceeds of crime in the European Union, applies as stated by Article 3 to the criminal offences covered by the following:
“ (a) Convention drawn up on the basis of Article K.3(2)(c) of the Treaty on European Union on the fight against corruption involving officials of the European Communities or officials of the Member States of the European Union ( ‘ Convention on the fight against corruption involving officials ’ );
(b) Council Framework Decision 2000/383/JHA of 29 May 2000 on increasing protection by criminal penalties and other sanctions against counterfeiting in connection with the introduction of the euro;
(c) Council Framework Decision 2001/413/JHA of 28 May 2001 on combating fraud and counterfeiting on non-cash means of payment;
(d) Council Framework Decision 2001/500/JHA of 26 June 2001 on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime;
(e) Council Framework Decision 2002/475/JHA of 13 June 2002 on combating terrorism;
(f) Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector;
(g) Council Framework Decision 2004/757/JHA of 25 October 2004 laying down minimum provisions on the constituent elements of criminal acts and penalties in the field of illicit drug trafficking;
(h) Council Framework Decision 2008/841/JHA of 24 October 2008 on the fight against organised crime;
(i) Directive 2011/36/EU of the European Parliament and of the Council of 5 April 2011 on preventing and combating trafficking in human beings and protecting its victims, and replacing Council Framework Decision 2002/629/JHA;
(j) Directive 2011/93/EU of the European Parliament and of the Council of 13 December 2011 on combating the sexual abuse and sexual exploitation of children and child pornography, and replacing Council Framework Decision 2004/68/JHA;
(k) Directive 2013/40/EU of the European Parliament and of the Council of 12 August 2013 on attacks against information systems and replacing Council Framework Decision 2005/222/JHA ( 8 ), as well as other legal instruments if those instruments provide specifically that this Directive applies to the criminal offences harmonised therein. ”
150. Article 4 § 1 of that Directive provides that States must enable the confiscation, either in whole or in part, of instrumentalities and proceeds or property the value of which corresponds to such instrumentalities or proceeds, subject to a final conviction for one of the criminal offences provided for in Article 3, which may also result from proceedings in absentia. Article 4 § 2 contains a provision concerning non ‑ conviction ‑ based confiscation:
“ Where confiscation on the basis of paragraph 1 is not possible, at least where such impossibility is the result of illness or absconding of the suspected or accused person, Member States shall take the necessary measures to enable the confiscation of instrumentalities and proceeds in cases where criminal proceedings have been initiated regarding a criminal offence which is liable to give rise, directly or indirectly, to economic benefit, and such proceedings could have led to a criminal conviction if the suspected or accused person had been able to stand trial. ”
151. Directive 2014/42 has harmonised the provisions on extended powers of confiscation by laying down a common minimum rule. Article 5 thus reads:
“Member States shall adopt the necessary measures to enable the confiscation, either in whole or in part, of property belonging to a person convicted of a criminal offence which is liable to give rise, directly or indirectly, to economic benefit, where a court, on the basis of the circumstances of the case, including the specific facts and available evidence, such as that the value of the property is disproportionate to the lawful income of the convicted person, is satisfied that the property in question is derived from criminal conduct.”
152. The Directive also provides, in Article 6, for the confiscation of assets from third parties :
“Member States shall take the necessary measures to enable the confiscation of proceeds, or other property the value of which corresponds to proceeds, which, directly or indirectly, were transferred by a suspected or accused person to third parties, or which were acquired by third parties from a suspected or accused person, at least if those third parties knew or ought to have known that the purpose of the transfer or acquisition was to avoid confiscation, on the basis of concrete facts and circumstances, including that the transfer or acquisition was carried out free of charge or in exchange for an amount significantly lower than the market value.”
153. Article 8 of the Directive provides for the following safeguards:
“1. Member States shall take the necessary measures to ensure that the persons affected by the measures provided for under this Directive have the right to an effective remedy and a fair trial in order to uphold their rights.
2. Member States shall take the necessary measures to ensure that the freezing order is communicated to the affected person as soon as possible after its execution. Such communication shall indicate, at least briefly, the reason or reasons for the order concerned. When it is necessary to avoid jeopardising a criminal investigation, the competent authorities may postpone communicating the freezing order to the affected person.
3. The freezing order shall remain in force only for as long as it is necessary to preserve the property with a view to possible subsequent confiscation.
4. Member States shall provide for the effective possibility for the person whose property is affected to challenge the freezing order before a court, in accordance with procedures provided for in national law. Such procedures may provide that when the initial freezing order has been taken by a competent authority other than a judicial authority, such order shall first be submitted for validation or review to a judicial authority before it can be challenged before a court.
5. Frozen property which is not subsequently confiscated shall be returned immediately. The conditions or procedural rules under which such property is returned shall be determined by national law.
6. Member States shall take the necessary measures to ensure that reasons are given for any confiscation order and that the order is communicated to the person affected. Member States shall provide for the effective possibility for a person in respect of whom confiscation is ordered to challenge the order before a court.
7. Without prejudice to Directive 2012/13/EU and Directive 2013/48/EU, persons whose property is affected by a confiscation order shall have the right of access to a lawyer throughout the confiscation proceedings relating to the determination of the proceeds and instrumentalities in order to uphold their rights. The persons concerned shall be informed of that right.
8. In proceedings referred to in Article 5, the affected person shall have an effective possibility to challenge the circumstances of the case, including specific facts and available evidence on the basis of which the property concerned is considered to be property that is derived from criminal conduct.
9. Third parties shall be entitled to claim title of ownership or other property rights, including in the cases referred to in Article 6.
10. Where, as a result of a criminal offence, victims have claims against the person who is subject to a confiscation measure provided for under this Directive, Member States shall take the necessary measures to ensure that the confiscation measure does not prevent those victims from seeking compensation for their claims.”
154. The Court would first point out that, in the interest of the proper administration of justice, and in accordance with Rule 42 § 1 of the Rules of Court, it is appropriate to join the applications, the events giving rise to the three applications and the legislative context being the same.
155. It should be noted at the outset that the applications in question concern solely the issue of the compatibility with the Convention of non ‑ conviction-based confiscation within the meaning of section 18(1) of Law no. 47/1985, as incorporated in Article 30 § 1 of the Construction Code (see paragraphs 102 and 106 above).
III. THE GOVERNMENT ’ S PRELIMINARY OBJECTIONS
A. The Government ’ s submissions
156. The Government raised preliminary objections in respect of all three applications.
157. As to the first applicant company, the Government pointed out that they had informed the Court during the Chamber proceedings that prior to lodging its application in Strasbourg, G.I.E.M. S.r.l. had brought proceedings before the Bari District Court to obtain compensation for the damage sustained as a result of the Bari municipal council ’ s acts, the confiscation of its land and the negative economic consequences for the company ’ s assets.
In the Government ’ s view, the subject matter of those proceedings was the same as that of the complaints raised in the application. As the applicant company had failed to inform the Court of that essential fact, there had been an abuse of the right of application and the application should be declared inadmissible pursuant to Article 35 § 3 ( a) of the Convention.
158. In addition, as the domestic proceedings in question were still pending – an expert ’ s report evaluating the damage alleged by the applicant company had not yet been filed – the application was in any event premature (Article 35 § 1).
159. The Government additionally pointed out that the land had already been returned to the applicant company in December 2013. Lastly, they indicated in this connection that section 4 ter of Law no. 102 of 3 August 2009 (see paragraph 13 7 above), in addition to requiring the lifting of the confiscation measure, which would be ordered by the criminal court, provided for the compensation to be awarded for any damage sustained as a result of a confiscation that was “unjustified under the Convention ”. In their submission, however, the applicant company had failed to seek such compensation and had thus not availed itself of this effective remedy.
2. Falgest S.r.l. and Mr Gironda
160. As regards the applicant company Falgest S.r.l., the Government objected that domestic remedies had not been exhausted since, as proven by the successful action of G.I.E.M. S.r.l., the applicant company could and should, in accordance with Article 676 of the Code of Criminal Procedure (see paragraph 13 5 above), have lodged an interlocutory application for review of the enforcement order ( Article 665 of the Code of Criminal Procedure ) and asked the enforcement judge to restore its title to the confiscated property.
Under the above-mentioned Article 676, any third parties in relation to criminal proceedings which might have repercussions for their property could seek revocation of the confiscation measure. The effectiveness of this remedy had been shown, for instance, by the fact that the materials provided to candidates sitting for a professional examination in 2012 at a lawyers ’ training college in Rome had included a standard form for seeking the review of a confiscation measure decided on grounds of unlawful site development and it had been based on the principles laid down in the Sud Fondi S.r.l. and Others judgment ( merits, cited above ). The form had explained that the remedy could also be used by third parties which had suffered from the negative effects of the measure.
161. The Government further observed, again in respect of Falgest S.r.l., that the applicant company had not sought to recover the confiscated land, but merely compensation for its loss. In their view, the company should have brought before the domestic courts “an action against the State seeking compensation for the economic loss sustained as a result of the alleged unlawful confiscation”.
162. The Government added that the applicant company could also have used the remedy provided for under Article 579 § 3 of the Code of Criminal Procedure (see paragraph 13 8 above), whereby a defendant, after dismissal of the criminal case, could challenge that decision specifically in respect of a confiscation measure in order to have the case re-examined on the merits.
163. The Government lastly reiterated their objection of non-exhaustion, already raised in respect of G.I.E.M. S.r.l. , explaining that the applicant company had not used the remedy provided for by section 4 ter of Law no. 102 of 3 August 2009 (see paragraphs 137 and 159 above).
164. The Government concluded that the application should be declared inadmissible pursuant to Article 35 § 1 of the Convention for non ‑ exhaustion of domestic remedies.
3. Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l.
165. Lastly, in respect of Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l., the Government repeated their arguments on the need to lodge an interlocutory application for review of the enforcement order ( see paragraph 160 above ).
B. Submissions of the applicant companies
166. According to counsel for G.I.E.M. S.r.l., while it was true that their client had brought civil proceedings before lodging its application with the Court, there had been no abuse of the right of application, nor was the application premature.
167. They argued that the facts set out in the application were not erroneous and that there had been no attempt to mislead the Court. The domestic proceedings concerned the acknowledgment of the non ‑ contractual liability of the Bari municipal authority for damage arising from its decisions, while the complaints raised before the Court concerned the unlawfulness of the deprivation of title on account of the unforeseeable imposition of a criminal sanction. Moreover, the proceedings before the Bari District Court had not yet been concluded by a final decision resolving the dispute.
168. As to the possibility of relying on section 4 ter of Law no. 102 of 3 August 2009, counsel for G.I.E.M. S.r.l. complained that the remedy in question, setting criteria for the evaluation of real property to be returned following a judgment of the Court finding that the confiscation breached the Convention, was ineffective. They explained that, in their client ’ s case, the land confiscated had already been returned in 2013 and, since there were no constructions on that land, it would not have been possible to obtain any compensation.
169. In their view, the Government should have, following the Court ’ s two judgments in Sud Fondi S.r.l. and Others ( both cited above ), offered their client a sum by way of compensation for all the damage sustained, instead of continuing to dispute the merits of the application.
170. The representatives of the company Falgest S.r.l. stated that an interlocutory application for review of the enforcement order would have allowed it only to raise questions pertaining to the existence, implementation, scope and substantive and procedural legitimacy of the order, thus precluding a fresh assessment of the facts by the enforcement judge. They concluded that, even if the applicant company had used this remedy, it would not have succeeded in recovering the confiscated property. They pointed out that the lower domestic courts had already found that the mental and material elements of the offence of unlawful site development were made out and that the sanction imposed on the company had been ordered in accordance with the settled case-law of the Court of Cassation. As it could not provide appropriate redress, the interlocutory application was not therefore an effective remedy within the meaning of Article 35 § 1 of the Convention.
3. Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l.
171. Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l., for their part, questioned, in substance, whether the interlocutory application for review of the enforcement order was an effective remedy.
(a) Whether there has been an abuse of the right of individual application
172. The Court reiterates that under Article 35 § 3 (a) an application may be rejected as an abuse of the right of individual application if, among other reasons, it was knowingly based on untrue facts ( see Gross v. Switzerland [GC], no. 67810/10, § 28, ECHR 2014 ).
173. The Court finds that the applicant company acknowledged that it had taken its case to the civil courts and had not informed the Court of that fact when it lodged its application in Strasbourg. Having regard to the explanation provided by G.I.E.M. S.r.l., namely that the civil proceedings still pending before the domestic courts and the present application had different objectives, the Court finds it impossible to accept the argument put forward by the Government.
174. The omission in question cannot be seen as an attempt to conceal from the Court any essential information or, in any event, information that would be relevant to its decision. The Bari District Court has been requested to provide redress for any damage that might stem from the acts of the Bari municipal authority, which is alleged to have misled the applicant company as to the use of the relevant land for building, whereas the planning regulations prohibited any development activity ( see paragraph 42 above ). However, the application lodged in Strasbourg sought to obtain a finding that there had been violations of Article 7 of the Convention and of Article 1 of Protocol No. 1 on account of a confiscation measure that the applicant company regarded as devoid of legal basis.
175. In conclusion, not having found any fraudulent intent on the part of the applicant company, the Court dismisses the objection that there has been an abuse of the right of application.
(b) Exhaustion of domestic remedies
176. The Court reiterates that the purpose of the rule on the exhaustion of domestic remedies is to afford the Contracting States the opportunity of preventing or putting right the violations alleged against them before those allegations are submitted to it (see, among many other authorities, Paksas v. Lithuania [GC], no. 34932/04, § 75, ECHR 2011 (extracts)). At the relevant time, the company G.I.E.M. S.r.l. gave the domestic courts the possibility of examining its complaints and of remedying the alleged violations. The Court observes, however, that the civil proceedings brought by the applicant company on 7 April 2005 ( see paragraph 4 3 above ) pursued a different purpose from that of the present application.
177. As regards the remedy under Law no. 102/2009, the Government ’ s objection cannot be upheld, as the land was returned to the applicant company not as a result of a judgment of the Court finding a violation of its rights (see paragraph 13 7 above), but following proceedings brought by the Bari municipal authority in October 2012 ( see paragraph 4 2 above ). The Court therefore dismisses the objection that the company G.I.E.M. S.r.l. failed to exhaust domestic remedies.
178. As regards the company Falgest S.r.l. the Court would refer to its grounds and findings in paragraph 17 7 above as far as Law no. 102/2009 is concerned.
179. As to the Government ’ s reference to a remedy under Article 579 § 3 of the Code of Criminal Procedure (see paragraphs 138 and 16 2 above), the Court would merely observe that this remedy is available to a defendant when the criminal case has been dismissed, enabling that person to appeal against the judgment specifically in respect of a confiscation which has been imposed as a security measure. The applicant company cannot therefore be reproached for not using that remedy, as the confiscation in question was not a security measure.
180. As regards the remedy provided for in Article 676 of the Code of Criminal Procedure ( see paragraphs 135 and 160 above), this remedy proved ineffective before the judgment in Sud Fondi S.r.l. and Others ( merits, cited above ). On 31 May 2001, long before that judgment, G.I.E.M. S.r.l. had used the remedy in question and the Court of Cassation had dismissed its appeal in June 2005 on the ground that the confiscation could also be applied to property belonging to bona fide third parties (see paragraphs 34-41 above). The Government have failed to show, based on case-law, that this remedy has been upheld since the Sud Fondi S.r.l. and Others judgment in a situation where, as in the present case, the prosecution had become statute ‑ barred.
181. Admittedly, in the second set of enforcement proceedings concerning G.I.E. M. S.r.l., on 12 March 2013 the enforcement judge, on an application from the Bari municipal authority in October 2012, revoked the confiscation measure on account of the fact, firstly, that the Court had found a violation of Article 7 of the Convention in the Sud Fondi S.r.l. and Others judgment ( merits, cited above ) and, secondly, that the company had been regarded as a bona fide third party, because none of its directors had been found liable for the offence of unlawful site development ( see paragraph 4 2 above ).
That is not the case for the company Falgest S.r.l. The above-mentioned decision of the executions judge of 12 March 2013 concerned the need to prove the existence of the mental element of the offence of unlawful site development, whereas in the case of Falgest S.r.l. the judicial authorities found that the offence was made out ( see paragraphs 82-86 above ). The reason why its company directors were not convicted was that the proceedings had become statute-barred. The remedy indicated by the Government did not therefore provide redress for the violations alleged by the applicant company.
182. As to the Government ’ s argument that the applicants should have brought civil proceedings against the State to obtain compensation for the confiscation (see paragraph 161 above), the Court reiterates that under Article 35 § 1 of the Convention there is no obligation to have recourse to remedies which are inadequate or ineffective. To be effective, a remedy must be capable of remedying directly the impugned state of affairs and must offer reasonable prospects of success (see Vučković and Others v. Serbia (preliminary objection) [GC], nos. 17153/11 and 29 others, §§ 73 ‑ 74, 25 March 2014). In the present case, having regard to the fact that at the time the application was lodged the confiscation was considered lawful, the Court fails to see how the remedy mentioned by the Government could have proved effective.
183. In conclusion, the Court dismisses the objections raised by the Government in respect of Falgest S.r.l.
3. Hotel Promotion Bureau S.r.l and R.I.T. A. Sarda S.r.l.
184. As regards this application, the Court would merely refer to the conclusion that it reached in paragraphs 180 -81 above on the subject of the same objection by the Government to the application lodged by the company Falgest S.r.l. and Mr Gironda.
185. Having regard to the foregoing, the Court finds that the Government ’ s preliminary objection must be dismissed.
IV. ALLEGED VIOLATION OF ARTICLE 7 OF THE CONVENTION
186. All the applicants alleged that the confiscation of their property, in spite of the fact that they had not been convicted ( condamnés ), breached Article 7 of the Convention, which reads as follows :
“1. No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed.
2. This article shall not prejudice the trial and punishment of any person for any act or omission which, at the time when it was committed, was criminal according to the general principles of law recognised by civilised nations.”
1. Submissions of the Government
187. The Government disputed that argument and asserted that the three applications should be declared incompatible ratione materiae with the Convention provisions. They took the view that the offence of unlawful site development was made out where land had been altered by unlawful construction or by the unlawful sub-division of land in breach of the applicable legislation or land-use plans, or in the absence of the requisite administrative planning permission.
188. Pointing out the need to protect the landscape and the environment and to provide for urban spaces that were fit to live in and well organised, the Government stated that in order to combat the phenomenon of illegal development, which often interfered with the orderly use of land, the Italian State had “many legal instruments” at its disposal.
189. They observed that, under Article 30 of the Construction Code ( Presidential Decree no. 380 of 6 June 2001), the purchase of land which had been developed illegally was null and void ( Article 30 § 9), the illegal development of land could be suspended by the municipal authority by means of an interim measure ( Article 30 § 7), and title to an illegally developed site was transferred to the competent municipality, whose responsibility it would be to demolish any buildings illegally erected thereon ( Article 30 § 8). Should the municipality fail to demolish such buildings, the regional authority would carry out the work in its place.
190. The Government added that under Article 44 § 2 of that Code, in cases where criminal proceedings had been brought against the person accused of being responsible for the unlawful site development, the court would order the confiscation of the site in question, in so far as it found the development to be unlawful. In such cases also, title to the land would be transferred to the municipality.
191. The Government explained that the administrative authority would order confiscation in cases where no criminal proceedings had been brought against the persons responsible for the unlawful site development or until such time as they were brought. Once criminal proceedings were initiated, however, it was the judicial authority dealing with the case which would order the confiscation, thereby replacing the administrative confiscation measure that would have been decided pursuant to Article 30 § 8. The confiscation would have the same effects regardless of the authority by which it was ordered.
192. As a general rule, confiscation was ordered by the administrative authority. The criminal courts would order confiscation only in the following situations : upon a conviction; where the liability of the defendant had been established but the case was dismissed because it was statute ‑ barred ( sentenza di proscioglimento per intervenuta prescrizione del reato ); where the defendant had died; and following an amnesty.
193. In the Government ’ s submission, Law no. 47/1985 had drawn a clear distinction between the penalties (detention up to two years and a fine ) applicable to the offence of unlawful site development (section 20) and the confiscation measure ordered by a criminal court ( section 19). They explained that after Decree no. 380/2001 had codified the existing rules, in particular with regard to planning permission, and had incorporated without amendment sections 19 and 20 of Law no. 47/1985, those two different provisions, owing to a “wrong choice” by the drafters of the new instrument, were both covered by Article 44 of the Construction Code (see paragraph 108 above).
194. The Government rejected the idea that the confiscation of land ordered by a criminal court pursuant to Article 44 § 2 of the Construction Code was a “penalty” ( pena ) in Italian law, or an additional penalty ( pena accessoria ) under Article 240 of the Criminal Code, observing as follows :
( a) the confiscation ordered by the criminal court deprived the owner of his property rights, as did the administrative measure under Article 30 of the Construction Code;
( b) the confiscation measure sought to restore the orderly use of the land; and
( c) the confiscated site was transferred to the municipality on the territory of which it was located ( namely to the territorial body empowered to oversee the proper use of land ), and not to the State, as would be the case for confiscation ordered under Article 240 of the Criminal Code.
195. The Government were of the view that in order to understand the landscape protection instruments in Italian law the Court should consider the difference between, on the one hand, the provisions concerning building work in the absence of or in breach of planning permission, and on the other, the provisions governing the unlawful development of land.
196. The Government explained that, under the first set of provisions, after a finding of guilt (Article 31 § 9 of the Construction Code, see paragraph 13 6 above ), the criminal court would order the demolition of the illegal building itself as an additional penalty for the offence of unlawful construction. In the case of unlawful site development, the court would order the confiscation of the land provided that the unlawfulness had been established (Article 44 § 2 of the Code ), regardless of whether or not the defendant was convicted. The public interest in landscape protection was stronger in the second case, because it was not a matter of a single building but a complete transformation of land in relation to its natural use, consisting, for example, in the construction of a village of several dozen houses.
197. In the Government ’ s opinion, the Court ’ s interpretation of section 19 of Law no. 47/1985 in the case of Sud Fondi S.r.l. and Others v. Italy ( (dec.), no. 75909/01, 30 August 2007), as confirmed in the Varvara judgment ( cited above ), was at odds with the provisions governing the confiscation of land in Italian law.
The Government observed that the Court had decided that the confiscation in question was a criminal penalty for the purposes of Article 7 of the Convention because :
( a) it was connected to a criminal offence;
( b) the Construction Code considered the confiscation to be a penalty;
( c) the penalty was not aimed at compensation for damage but had an essentially punitive purpose, to prevent repeated breaches of the statutory conditions;
( d) the penalty was particularly severe, because it extended to all the land within the development site; and
( e) the substantively illegal nature of the development had been established by the criminal courts.
198. The Government were of the view that this conclusion by the Court was erroneous. Firstly, it was not true that confiscation was necessarily connected to a criminal offence as, pursuant to Article 30 § 8 of the Construction Code, it could be ordered by an administrative authority before a conviction became final, and it could also be imposed on a company, which could not be prosecuted for a criminal offence by virtue of the societas delinquere non potest principle.
199. The Court ’ s second argument was also irrelevant, as it was illogical to find that confiscation could be different in nature – administrative or criminal – depending on whether it had been ordered by an administrative authority or a court.
200. Thirdly, the aim of confiscation was not to punish those responsible for the illegal act but to remove the effects of an unlawful site development and to protect the landscape from a use which was incompatible with land ‑ use planning. The measure was therefore also preventive in nature.
201. The Government added that the criminal nature of the confiscation could not depend on the severity of the economic consequences for the assets of the owner of the confiscated land, or on its area, or on the dimension of the construction and its proportion to the total area. They argued that the nature of the measure had to be assessed in relation to its legal regime as determined by law and interpreted by national courts.
202. Lastly, the fact that confiscation was governed by Article 44 of the Construction Code, under the heading “ Criminal sanctions” (“ sanzioni penali ”), did not prove that it should be classified as a criminal penalty, as this was the result of a mistake on the part of the drafters of this text.
203. In the Government ’ s submission, since the Court ’ s admissibility decision in Sud Fondi S.r.l. and Others ( cited above ), the Italian courts had construed the legal system of land confiscation in the light of the Convention principles as interpreted by the Court, giving an interpretation of Article 44 § 2 of the Construction Code that was in conformity with Article 7 of the Convention.
That adaptation had led not to a change in the legal classification of the measure but to the introduction in the Italian legal system of the safeguards provided for by Article 7 of the Convention. Consequently, confiscation could be ordered by a criminal court only if there was proof of both the material element ( elemento oggettivo ) and the mental element ( elemento soggettivo ) of the unlawful act.
The Government concluded from the foregoing that the confiscation of land pursuant to Article 44 of the Construction Code was not a “penalty” for the purposes of Article 7 of the Convention.
2. Submissions of the applicants
204. The applicant company referred to the facts and grounds set out by the Court in its admissibility decision in Sud Fondi S.r.l. and Others ( cited above ) and concluded that the confiscation of its land, even though there had been no illegal activity on its part or on the part of its legal representative, had to be regarded as a penalty within the meaning of the Strasbourg case-law.
( b ) Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l.
205. While accepting that, according to national law and the settled domestic case-law, confiscation for unlawful site development was regarded as an administrative sanction, the applicant companies pointed out that the Court had nevertheless clearly indicated, in its admissibility decision in Sud Fondi S.r.l. and Others ( cited above ), that the confiscation provided for in Article 44 § 2 of the Construction Code must be classified as, in effect, a criminal sanction and must therefore observe the fundamental principles governing criminal-law decisions, starting with the principle of legality under Article 7 of the Convention.
206. The applicant companies took the view that in spite of the statements of the Italian courts in the present case, the confiscation of “unlawfully developed” land could not be regarded as a mere administrative sanction not subject to the principle of personal criminal liability; on the contrary, it had to comply with the substantive and procedural rules governing the establishment of such liability.
207. In the applicants ’ view, the “criminal” nature of this type of confiscation and therefore the applicability of Article 7, as confirmed by the Court in its Varvara judgment ( cited above ), were self-evident.
( c ) Falgest S.r.l. and Mr Gironda
208. These applicants also argued that the impugned confiscation could not be regarded merely as an administrative sanction with the result that the principle of individual criminal liability was not applicable.
209. They observed that in spite of the Court ’ s position on the subject and notwithstanding the obligation on the national courts to follow the Strasbourg case-law, the Italian Court of Cassation had maintained its previous line of interpretation, going so far as to state that a confiscation measure had to be enforced even if there was no conviction because the prosecution of the offence was statute-barred, when the court had established the mental and material elements of the offence of unlawful site development.
210. The Court reiterates that the concept of a “penalty” in Article 7 has an autonomous meaning. To render the protection offered by this Article effective, the Court must remain free to go behind appearances and assess for itself whether a particular measure amounts in substance to a “ penalty ” within the meaning of this provision ( see Welch v. the United Kingdom, 9 February 1995, § 27, Series A no. 307 ‑ A, and Jamil v. France, 8 June 1995, § 30, Series A no. 317 ‑ B).
211. The wording of Article 7 § 1, second sentence, indicates that the starting-point in any assessment of the existence of a “penalty” is whether the measure in question is imposed following a decision that a person is guilty of a criminal offence. However, other factors may also be taken into account as relevant in this connection, namely the nature and purpose of the measure in question; its characterisation under national law; the procedures involved in the making and implementation of the measure; and its severity ( see Welch, cited above, § 28; Jamil, cited above, § 31; Kafkaris, cited above, § 142; M. v. Germany, no. 19359/04, § 120, ECHR 2009; Del Río Prada v. Spain [GC], no. 42750/09, § 82, ECHR 2013; and Société Oxygène Plus v. France (dec.), no. 76959/11, § 47, 17 May 2016 ).
( b ) Application of general principles to the present case
212. In the case of Sud Fondi S.r.l. and Others ( admissibility decision of 30 August 2007, cited above ), the Court took the view that the confiscation for unlawful site development imposed on the applicants could be regarded as a “penalty” within the meaning of Article 7 of the Convention in spite of the fact that no criminal conviction had been handed down against the applicant companies or their representatives. For that purpose it relied on the fact that the confiscation in question was connected to a “criminal offence” based on general legal provisions; that the material illegality of the developments had been established by criminal courts; that the sanction provided for by section 19 of Law no. 47 of 1985 sought mainly to deter, by way of punishment, further breaches of the statutory conditions; that the 2001 Construction Code classified confiscation for unlawful site development among the criminal sanctions; and, lastly, that the sanction was one of a certain severity. In its Varvara judgment ( cited above, § 51), the Court confirmed that finding.
213. In the present case the applicability of Article 7 was denied by the Government.
214. The Court must therefore ascertain whether the impugned confiscations constitute “penalties” within the meaning of Article 7 of the Convention. To do so it will apply the criteria which stem from the general principles reiterated above.
(i) Whether the confiscations were imposed following convictions for criminal offences
215. As to whether the confiscations in question were imposed following convictions for criminal offences, the Court has generally found that this is only one criterion among others to be taken into consideration ( see Saliba v. Malta (dec.), no. 4251/02, 23 November 2004; Sud Fondi S.r.l. and Others (decision cited above ); M. v. Germany ( cited above ); and Berland v. France, no. 42875/10, § 42, 3 September 2015), without it being regarded as decisive when it comes to establishing the nature of the measure (see Valico S.r.l. v. Italy (dec.), no. 70074/01, ECHR 2006-III, and Société Oxygène Plus, cited above, § 47). It is only more rarely that the Court has found this aspect decisive in declaring Article 7 inapplicable (see Yildirim v. Italy (dec.), no. 38602/02, ECHR 2003 ‑ IV, and Bowler International Unit v. France, no. 1946/06, § 67, 23 July 2009).
216. In the Court ’ s view, if the criminal nature of a measure were to be established, for the purposes of the Convention, purely on the basis that the individual concerned had committed an act characterised as an offence in domestic law and had been found guilty of that offence by a criminal court, this would be inconsistent with the autonomous meaning of “penalty” (see, to this effect, Valico S.r.l., decision cited above ). Without an autonomous concept of penalty, States would be free to impose penalties without classifying them as such, and the individuals concerned would then be deprived of the safeguards under Article 7 § 1. That provision would thus be devoid of any practical effect. It is of crucial importance that the Convention be interpreted and applied in a manner which renders its rights practical and effective, not theoretical and illusory, and this principle thus applies to Article 7 (see Del Río Prada, cited above, § 88).
217. Consequently, while conviction by the domestic criminal courts may constitute one criterion, among others, for determining whether or not a measure constitutes a “penalty” within the meaning of Article 7, the absence of a conviction does not suffice to rule out the applicability of that provision.
218. In the present case, the Government did not agree, contrary to their position in the case of Sud Fondi S.r.l. and Others (decision cited above ), that confiscations should necessarily be connected to a “criminal offence”, thus taking the opposite view to the Chamber in that case, which had found that, even though “no prior criminal conviction [had been] handed down against the applicant companies or their representatives by the Italian courts”, the impugned confiscation was nevertheless connected to a criminal offence based on general legal provisions.
219. Having regard to the circumstances of the situations in the present case, and after examining the Government ’ s arguments, the Grand Chamber does not see any reason to depart from the Chamber ’ s finding in the Sud Fondi S.r.l. and Others decision ( cited above). In any event, even assuming that a different finding were called for, for the reasons set out above the Court finds that in itself this criterion cannot serve to rule out the “ criminal ” nature of the measure. The Court must therefore examine the other above ‑ mentioned criteria.
( ii ) The classification of confiscation in domestic law
220. As regards the classification of confiscation in domestic law, the Court would first observe that Article 44 of the Construction Code, which governs the confiscation measure at issue in the present case, bears the heading “Criminal sanctions” ( see paragraph 108 above ). The Court further takes note of the Government ’ s argument that this wording was simply a mistake on the part of the drafters of this text when the relevant rules were codified. However, this argument is not supported by the legislative history of the provision. Moreover, as the law was approved in 200 1, the legislature had sixteen years to correct it should it have chosen to do so.
221. This element indicates that confiscation is indeed a “penalty” within the meaning of Article 7 ( see Sud Fondi S.r.l. and Others, decision cited above ).
(iii) The nature and purpose of the confiscation measure
222. As to the nature and purpose of the confiscation measure, the Grand Chamber confirms the Chamber ’ s findings in the Sud Fondi S.r.l. and Others (merits) and Varvara judgments (both cited above ) to the effect that the confiscation of the applicants ’ property for unlawful site development was punitive in nature and purpose and was therefore a “penalty” within the meaning of Article 7 of the Convention. Three reasons may be put forward to justify that finding.
223. Firstly, the punitive ( “ afflittivo ” ) and deterrent nature of the impugned measure has been emphasised by the Italian Court of Cassation ( see paragraph 121 above ). As emphasised by the Government in their observations (see paragraph 20 3 above), the domestic courts have accepted the principle whereby the Article 7 guarantees apply in confiscation cases.
224. Secondly, the Government acknowledged in their observations that the confiscation was compatible with Article 1 of Protocol No. 1, in particular because it pursued the purpose of “punishing” those responsible for the illegal transformation of the land (see the Government ’ s observations of 5 June 2015, § 119). In other words, the Government themselves emphasised the punitive nature of the confiscation.
225. Thirdly, the Court notes that confiscation is a mandatory measure (see paragraphs 41 and 119 above). Its imposition is not subject to proof of a situation of actual danger or of concrete risk for the environment. Confiscation may thus be imposed even in the absence of any actual activity with the aim of transforming land, as in the cases of the company G.I.E.M. S.r.l. and Mr Gironda.
226. For all these reasons, the Court takes the view that the purpose of the confiscation of the applicants ’ property for unlawful site development was punitive.
( iv ) The severity of the effects of the confiscation
227. As to the severity of the measure in question, the Court observes that a confiscation measure for unlawful site development is a particularly harsh and intrusive sanction. Within the boundaries of the site concerned, it applies not only to the land that is built upon, together with the land in respect of which the owners ’ intention to build or a change of use has been demonstrated, but also to all the other plots of land making up the site. Moreover, the measure does not give rise to any compensation ( see Sud Fondi S.r.l. and Others, decision cited above ).
( v ) Procedures for the adoption and enforcement of a confiscation measure
228. As regards the procedures for the adoption and enforcement of a confiscation measure, the Court observes that it is ordered by the criminal courts. This was the case for the applicants.
229. In addition, the Court does not find persuasive the argument that the criminal courts act in the place of the administrative authority.
230. Firstly, this is a matter of debate in domestic law, at least in cases of unlawful site development ( the procedural material offence or contractual offence ) in the absence of or in breach of planning permission, as there are two opposite approaches in the case-law ( see paragraphs 123-27 above ). In any event, once the criminal conviction has become final, the confiscation measure can no longer be lifted even in the case of subsequent regularisation of the development by the administrative authority ( see paragraphs 1 28-29 above ).
231. In addition, the fact that the criminal court does not take the place of the administrative authority is particularly clear in cases of the substantive material offence of unlawful site development. Where the administrative authority has authorised site development which is in breach of the planning regulations and is therefore unlawful, the court ’ s power to confiscate the land and buildings thereon does not represent an act in which the court takes the place of the authority. On the contrary, it reflects a conflict between the criminal court and the administrative authority in the interpretation of the regional and national planning legislation. The criminal court ’ s role is not simply to verify that no site development has been carried out in the absence of or in breach of planning permission, but also to ascertain whether the development, authorised or not, is compatible with all the other applicable rules.
232. That was true in particular in the cases of Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l. , where the municipality declared, while the criminal proceedings for unlawful site development were still pending, that the site development agreement with R.I.T.A. Sarda S.r.l. and the planning permissions granted had complied with the planning regulations in force at the material time, and in particular with Regional Law no. 45/1989, and that, consequently, the offence of unlawful site development was not made out in that case ( see paragraph 65 above ). However, the criminal court rejected the authority ’ s position and found the applicant companies liable. In other words, the criminal court acted independently of the administrative authority.
233. Having regard to the foregoing, the Court concludes that the impugned confiscation measures can be regarded as “penalties” within the meaning of Article 7 of the Convention. This conclusion, which is the result of the autonomous interpretation of the notion of “penalty” within the meaning of Article 7, entails the applicability of that provision, even in the absence of criminal proceedings within the meaning of Article 6. Nevertheless, and as the Italian Constitutional Court emphasised in its judgment no. 49 of 2015 (see paragraph 133 above), it does not rule out the possibility for the domestic authorities to impose “penalties” through procedures other than those classified as criminal under domestic law.
234. The Court further finds that this complaint is not manifestly ill ‑ founded within the meaning of Article 35 § 3 (a) of the Convention. It is not inadmissible on any other grounds and must therefore be declared admissible.
235. In order to assess whether Article 7 has been complied with in the present case, the Court must now examine whether the impugned confiscation measures were conditional on the existence of a mental element, as stated in the Sud Fondi S.r.l. and Others judgment ( merits, cited above ), and whether the measures could be imposed without any prior formal conviction and without the companies being parties to the proceedings in question.
1. Whether the impugned confiscation measures required a mental element
( a ) The parties ’ submissions
236. The parties reiterated, in substance, the arguments that they had submitted on the applicability of Article 7.
237. In particular, the applicants were all of the view that, as the Court had noted in its Sud Fondi S.r.l. and Others (merits) and Varvara judgments (both cited above ), section 18 of Law no. 47/1985 did not meet the requirement of foreseeability since it provided that there would be an unlawful site development not only when land was transformed in breach of local planning regulations, but also where those transformations infringed regional or national law. The Italian Court of Cassation itself had acknowledged that the existing legislation was obscure and poorly worded. The applicants further observed that the sanction of confiscation had been imposed in the absence of any criminally reprehensible conduct or any liability on the part of the applicant companies. As to Mr Gironda, the measure of deprivation had been imposed following dismissal of the case as statute-barred by the Court of Cassation, which, on quashing the judgment of the Court of Appeal, had clearly reproached the applicant for his conduct but without finding any “substantive” liability in the operative part of its judgment.
238. The Government observed that, in the Sud Fondi S.r.l. and Others judgment ( merits, cited above ), the Court had found a violation of Article 7 of the Convention on the ground that confiscation was not a foreseeable consequence of the applicant companies ’ conduct ( they had been acquitted as the courts had not found them liable for the offence in question ) and that the confiscation measure imposed on them had not therefore been provided for by law for the purposes of Article 7 of the Convention.
239. In the Government ’ s submission, the currently applicable legislation and Italian case-law were fully compliant with Article 7 as interpreted by the Court, for the following reasons :
( a) The confiscation of land as a consequence of its illegal transformation was regulated under Articles 30 and 44 of the Construction Code. Those responsible for such development ( as defined in Article 30) were aware that if they proceeded with the transformation of land ( trasformazione urbanistica o edilizia dei terreni ) by carrying out construction work ( lottizzazione abusiva materiale ) or the unlawful subdivision of land ( lottizzazione abusiva negoziale ), they would be deprived of ownership of the land by the competent criminal court, which would order its confiscation pursuant to Article 44 § 2 of the Code.
( b) Since the Constitutional Court ’ s judgment no. 239 of 2009, inviting the Italian courts to give an interpretation of Article 44 § 2 of the Decree that was compliant with the Convention as interpreted by the Court, there had been well-established case-law to the effect that confiscation could be ordered provided it was proven, at least in substance, that the accused person was liable for the unlawful transformation of the land in question; the criminal court could order confiscation only if there was proof both of the material element and the mental element (see paragraph 20 3 above).
240. Accordingly, the Government asked the Court to find that Article 7 had been complied with in this respect in the present case.
241. The Court notes that in its Sud Fondi S.r.l. and Others judgment ( merits, cited above ) it reiterated the importance of the principle that offences and penalties must be provided for by law and the ensuing requirement of foreseeability of the effects of the criminal law (ibid ., §§ 105- 10). Applying this notion to that particular case, it agreed with the findings of the Italian Court of Cassation that, as the rules that had been breached lacked foreseeability, the accused had committed an unavoidable and excusable error, thus ruling out the mental element that had to be established for the offence to be made out, and their acquittal was justified (ibid., §§ 111- 14). The Court further found as follows:
“ 115. A connected series of ideas should be developed. At domestic level, the classification ‘ administrative ’ ... that is given to the impugned confiscation measure allows the sanction in question to fall outside the constitutional principles governing criminal matters. Article 27/1 of the Constitution provides that ‘ criminal liability is personal ’ and the courts ’ interpretation thereof is that a mental element is always necessary. Moreover, it would be difficult to apply Article 27/3 of the Constitution ( ‘ Punishments .... must be aimed at the rehabilitation of the convicted person ’ ) to a convicted person if he or she cannot be found liable.
116. As regards the Convention, Article 7 does not expressly mention any mental link between the material element of the offence and the person deemed to have committed it. Nevertheless, the rationale of the sentence and punishment, and the ‘ guilty ’ concept (in the English version) and the corresponding notion of ‘ personne coupable ’ (in the French version), support an interpretation whereby Article 7 requires, for the purposes of punishment, an intellectual link ( awareness and intent) disclosing an element of liability in the conduct of the perpetrator of the offence, failing which the penalty will be unjustified. Moreover, it would be inconsistent, on the one hand, to require an accessible and foreseeable legal basis and, on the other, to allow an individual to be found ‘ guilty ’ and to ‘ punish ’ him even though he had not been in a position to know the criminal law owing to an unavoidable error for which the person falling foul of it could in no way be blamed.
117. Under Article 7, for the reasons set out above, a legislative framework which does not enable an accused person to know the meaning and scope of the criminal law is defective not only on the grounds of the general conditions of ‘ quality ’ of the ‘ law ’ but also in terms of the specific requirements of the principle of legality in criminal law.”
242. The Grand Chamber endorses the analysis to the effect that the rationale of the sentence and punishment, and the ‘ guilty ’ concept (in the English version) with the corresponding notion of ‘ personne coupable ’ (in the French version), support an interpretation whereby Article 7 requires, for the purposes of punishment, a mental link. As is explained in the Sud Fondi S.r.l. and Others judgment ( merits, cited above ), the principle that offences and sanctions must be provided for by law entails that criminal law must clearly define the offences and the sanctions by which they are punished, such as to be accessible and foreseeable in its effects. This requirement is satisfied where the individual can know from the wording of the relevant provision and, if need be, with the assistance of the courts ’ interpretation of it, what acts and omissions will make him criminally liable. This also means that, in principle, a measure can only be regarded as a penalty within the meaning of Article 7 where an element of personal liability on the part of the offender has been established. There is certainly, as the Italian Court of Cassation noted in the case of Sud Fondi S.r.l. and Others ( see paragraph 112 of the Court ’ s judgment in that case, ibid. ), a clear correlation between the degree of foreseeability of a criminal-law provision and the personal liability of the offender. The Grand Chamber thus shares the Chamber ’ s findings in that case to the effect that punishment under Article 7 requires the existence of a mental link through which an element of liability may be detected in the conduct of the person who physically committed the offence ( ibid., § 116).
243. Nevertheless, and as the Court indicated in its Varvara judgment ( cited above, § 70), this requirement does not preclude the existence of certain forms of objective liability stemming from presumptions of liability, provided they comply with the Convention. In this connection, the Court would refer to its case-law under Article 6 § 2 of the Convention to the effect that in principle the Contracting States remain free to apply the criminal law to an act where it is not carried out in the normal exercise of one of the rights protected under the Convention ( see Engel and Others v. the Netherlands, 8 June 1976, § 81, Series A no. 22, p. 34 ) and, accordingly, to define the constituent elements of the resulting offence. In particular, the Contracting States may, under certain conditions, penalise a simple or objective fact as such, irrespective of whether it results from criminal intent or from negligence. Examples of such offences may be found in the laws of the Contracting States. Presumptions of fact or of law operate in every legal system. The Convention does not prohibit such presumptions in principle; it does, however, require the Contracting States to remain within certain limits in this respect as regards criminal law. According to the case-law, these limits will be overstepped where a presumption has the effect of making it impossible for an individual to exonerate himself from the accusations against him, thus depriving him of the benefit of Article 6 § 2 of the Convention (see, among other authorities, Salabiaku v. France, 7 October 1988, § § 27 -28, Series A no. 141 -A; Janosevic v. Sweden, no. 34619/97, § 68; ECHR 2002 - VII and Klouvi v. France, no. 30754/03, § 48, 30 June 2011 ).
244. The Court reiterates that the Convention must be read as a whole and interpreted in such a way as to promote internal consistency and harmony between its various provisions ( see, among other authorities, mutatis mutandis, Hammerton v. the United Kingdom, no. 6287/10, § 84, 17 March 2016 ). Having regard to the common ground between Article 7 and Article 6 § 2, in their respective areas, namely that they protect the right of any individual not to be punished without his personal liability, involving a mental link with the offence, having been duly established, the Court finds that the case-law described above applies mutatis mutandis under Article 7.
245. Moreover, the Court notes that, following the Sud Fondi S.r.l. and Others judgment ( merits, cited above ), the domestic courts accepted this reasoning and altered their case-law accordingly in two significant aspects. First, even in cases of dismissal where prosecution of the offence has become statute-barred, in order to implement a confiscation measure it must be demonstrated that the offence is nevertheless made out, based on both the material element and the mental element. Secondly, since the Sud Fondi S.r.l. and Others judgment ( ibid. ), the domestic courts have refrained from imposing that measure on bona fide third parties.
246. Having regard to the foregoing, the Court finds that in the present case Article 7 required that the impugned confiscation measures had to be foreseeable for the applicants and precluded any decision to impose those measures on the applicants in the absence of a mental link disclosing an element of liability in their conduct.
247. The question arising at this juncture is therefore whether this requirement could have been fulfilled, bearing in mind that (a) none of the applicants had been formally convicted in that connection, and (b) the applicant companies were never parties to the proceedings in question. The Court will now examine each of these points.
2. Whether the confiscation measures could be applied in the absence of formal convictions
248. The Court observes that in the present case all the applicants had their property confiscated even though none of them had received a formal conviction: in the case of the company G.I.E.M. S.r.l., neither the company itself nor its representatives had ever been prosecuted (see paragraphs 23-29 above); as to the other applicant companies, unlike their representatives, they had never been parties to the proceedings in question (see paragraphs 66-73 and 82-86 above); lastly the proceedings brought against Mr Gironda had been discontinued as statute-barred.
249. The parties have clearly diverging views on the need for a formal conviction, an issue that has already been examined in Varvara ( cited above ). The applicants argued that, according to that judgment, the impugned confiscation measures could not be applied in the absence of formal convictions, and they asked the Court to confirm the Varvara case ‑ law on that point.
The Government took the opposite view. They thus asked the Court to depart from Varvara on that point and confirm the position of the domestic courts, in particular that of the Constitutional Court ( see paragraph 133 above ).
250. The Grand Chamber would refer back to the following findings in the Varvara judgment ( cited above ) :
“71. The ‘ penalty ’ and ‘ punishment ’ rationale and the ‘ guilty ’ concept (in the English version) and the corresponding notion of ‘ personne coupable ’ (in the French version) support an interpretation of Article 7 as requiring, in order to implement punishment, a finding of liability by the national courts enabling the offence to be attributed to and the penalty to be imposed on its perpetrator. Otherwise the punishment would be devoid of purpose (see Sud Fondi S.r.l. and Others, cited above, § 116). It would be inconsistent on the one hand to require an accessible and foreseeable legal basis and on the other to permit punishment where, as in the present case, the person in question has not been convicted.
72. In the present case, the criminal penalty which was imposed on the applicant despite the fact that the criminal offence had been statute-barred and his criminal liability had not been established in a verdict as to his guilt, is incompatible with the principle that only the law can define a crime and prescribe a penalty, which the Court has recently clarified and which is an integral part of the legality principle laid down in Article 7 of the Convention. Consequently, the penalty in issue is not prescribed by law for the purposes of Article 7 of the Convention and is arbitrary. ”
251. It follows from the above that Article 7 precludes the imposition of a criminal sanction on an individual without his personal criminal liability being established and declared beforehand. Otherwise the principle of the presumption of innocence guaranteed by Article 6 § 2 of the Convention would also be breached.
252. However, while it is clear that, as indicated in Varvara (ibid.) the requisite declaration of criminal liability is often made in a criminal-court judgment formally convicting the defendant, this should not be seen as a mandatory rule. The Varvara judgment does not lead to the conclusion that confiscation measures for unlawful site development must necessarily be accompanied by convictions decided by criminal courts within the meaning of domestic law. The Court, for its part, must ensure that the declaration of criminal liability complies with the safeguards provided for in Article 7 and that it stems from proceedings complying with Article 6. In this connection, the Court would emphasise that its judgments all have the same legal value. Their binding nature and interpretative authority cannot therefore depend on the formation by which they were rendered.
253. It also follows from the above that, as the Court has already indicated concerning the autonomous nature of its interpretation of Article 7 (see paragraph 23 3 above), compliance with Article 7 as interpreted in the Varvara judgment does not require that all disputes under that Article must necessarily be dealt with in the context of criminal proceedings stricto sensu. In that sense, the applicability of this provision does not have the effect of imposing the “criminalisation” by States of procedures which, in exercising their discretion, they have not classified as falling strictly within the criminal law.
254. In this connection the Court observes that, relying on the principle established in the Öztürk judgment ( cited above, §§ 49 and 56 ), it has found on many occasions that the “obligation to comply with Article 6 of the Convention does not preclude a ‘ penalty ’ being imposed by an administrative authority in the first instance ” ( see Grande Stevens and Others v. Italy, nos. 18640/10 and 4 others, §§ 138-139, 4 March 2014; see also Kadubec v. Slovakia, 2 September 1998, § 57, Reports 1998-VI; Čanády v. Slovakia, no. 53371/99, § 31, 16 November 2004; and A. Menarini Diagnostics S.r.l. v. Italy, no. 43509/08, §§ 58-59, 27 September 2011 ). This principle has also been confirmed in terms of the right to the presumption of innocence under Article 6 § 2 of the Convention. Thus in the case of Mamidakis v. Greece ( no. 35533/04, § 33, 11 January 2007) the Court found as follows :
“As to the complaint that the administrative courts did not take account of the fact that the applicant had not been prosecuted for the same offence, the Court takes the view that this situation cannot be analysed as a breach of the right to be presumed innocent. Such a finding would mean that no administrative proceedings could be brought in the absence of criminal proceedings and that no finding of an offence can be made by an administrative court in the absence of a formal declaration of guilt by a criminal court. In addition, the applicant has not raised any other argument which could lead the Court to conclude that the administrative courts had considered him to be guilty before reaching a final decision in his case.”
255. Having thus dismissed the need for there to be criminal proceedings, the Court must nevertheless ascertain whether the impugned confiscation measures at least required a formal declaration of criminal liability in respect of the applicants.
256. While the applicants emphasised the illegality of the confiscation measure in the absence of a formal conviction, the Government took the view that, except in the case of G.I.E.M. S.r.l., the applicant companies and their representatives, including Mr Gironda, had clearly been found guilty of contravening the planning regulations.
257. The Court observes that since the applicant companies were not prosecuted themselves, and nor were they parties to the proceedings (see paragraphs 248 above and 269 below ), there cannot have been a prior declaration of their liability. Consequently, the question whether the declaration of criminal liability required by Article 7 must meet formal requirements arises only in respect of Mr Gironda.
258. In the present case the Court must therefore ascertain whether, even though the offence of which Mr Gironda stood accused was statute-barred, it is entitled to have regard to the elements of that offence, as established by the domestic courts, in order to find that, in substance, there had been a declaration of liability capable of satisfying the prerequisite for the imposition of a sanction compatible with Article 7 of the Convention.
259. The Court reiterates its case-law to the effect that it may be necessary to look beyond the appearances and the language used and concentrate on the realities of the situation (see Ezeh and Connors v. the United Kingdom [GC], nos. 39665/98 and 40086/98, § 123, ECHR 2003 ‑ X ). The Court is thus entitled to look behind the operative part of a judgment and take account of its substance, the reasoning being an integral part of the decision (see, mutatis mutandis, Allen v. the United Kingdom [GC], no. 25424/09, § 127, 12 July 2013).
260. In the Court ’ s view, it is necessary to take into account, first, the importance in a democratic society of upholding the rule of law and public trust in the justice system, and secondly, the object and purpose of the rules applied by the Italian courts. In that connection it would appear that the relevant rules seek to prevent the impunity which would stem from a situation where, by the combined effect of complex offences and relatively short limitation periods, the perpetrators of such offences systematically avoid prosecution and, above all, the consequences of their misconduct ( see, mutatis mutandis, El-Masri v. the former Yugoslav Republic of Macedonia [GC], no. 39630/09, § 192, ECHR 2012 ).
261. The Court cannot overlook these considerations in applying Article 7 in the present case, provided that the domestic courts in question acted in strict compliance with the defence rights enshrined in Article 6 of the Convention. For this reason it takes the view that, where the courts find that all the elements of the offence of unlawful site development are made out, while discontinuing the proceedings solely on account of statutory limitation, those findings can be regarded, in substance, as a conviction for the purposes of Article 7, which in such cases will not be breached.
262. It follows that there has been no violation of Article 7 in respect of Mr Gironda.
3. Whether the impugned confiscation measures could be imposed on the applicant companies, which were not parties to the proceedings
( a ) The parties ’ submissions
263. The applicant companies pointed out that they had not been parties to the criminal proceedings in respect of the offence of unlawful site development and that, moreover, this had not been possible for them as a matter of law. As regards the company G.I.E.M. S.r.l. in particular, its representatives had not even been prosecuted, and the confiscation of its property had merely been the result of its automatic incorporation into the Punta Perotti site.
264. The Government observed that the possibility of setting up a company had the undeniable advantage of confining the business risk to the legal entity created expressly to carry on this activity. In their view, a shareholder in a legal entity thus assumed risks only to the extent of his contribution to the company and it was the company itself which necessarily sustained the negative consequences of a confiscation measure. The Government argued that, unlike G.I.E.M. S.r.l., the companies Hotel Promotion Bureau S.r.l., R.I.T.A. Sarda S.r.l. and Falgest S.r.l. could clearly not claim to have been acting in good faith, because they were “legal instruments in the hands of their shareholders”.
265. The Court notes that Italian law ascribes to limited-liability companies, such as the applicant companies, a legal personality that is distinct from that of the companies ’ directors or shareholders. In principle it is thus necessary to ascertain whether the individuals involved in the proceedings before the domestic courts were acting and were tried in a personal capacity or as legal representatives of the companies concerned.
266. However, the Court observes that under Italian law, as in force at the time, in accordance with the principle societas delinquere non potest (“a legal entity cannot commit a criminal offence”), limited-liability companies could not, as such, be parties to criminal proceedings, in spite of their distinct legal personality. Accordingly, they could not be legally represented in the context of the relevant criminal proceedings in the present case, even though the conduct (and resulting liability) of their respective legal representatives was directly attributed to them. The companies thus remained third parties in relation to those proceedings, as confirmed by the judgments of the domestic courts.
267. The Court has always recognised the principle that limited liability companies have a distinct legal personality, finding for example in Agrotexim and Others v. Greece (24 October 1995, § 66, Series A no. 330 ‑ A):
“... the Court considers that the piercing of the ‘ corporate veil ’ or the disregarding of a company ’ s legal personality will be justified only in exceptional circumstances, in particular where it is clearly established that it is impossible for the company to apply to the Convention institutions through the organs set up under its articles of incorporation or – in the event of liquidation – through its liquidators.”
268. The Court applied this case-law in its decision on the admissibility of the applications lodged by Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l., in dismissing the complaints raised, in their own names, by the director and/or shareholders of the applicant companies under Article 7 of the Convention and Article 1 of Protocol No. 1, on account of the confiscation. Similarly, the complaints submitted by the applicant companies concerning the violation of Article 6 were declared inadmissible in the decisions on admissibility, in which the Court stated that as the impugned proceedings had not concerned Falgest S.r.l., Hotel Promotion Bureau S.r.l. or R.I.T.A. Sarda S.r.l., those applicant companies could not be considered victims of the alleged violation.
269. In the instant case, therefore, the question to be addressed concerns the imposition of a criminal sanction on legal entities which, on account of their distinct legal personality, have not been parties to any kind of proceedings (whether criminal, administrative, civil, etc. ).
270. Under Italian law, confiscation of property is a sanction imposed by a criminal court as an automatic consequence of a finding of the offence of unlawful site development. No distinction is drawn for the situation where the owner of the property is a company, which cannot commit a criminal offence according to Italian law (see paragraph 2 66 above).
271. The Court has already ruled, in the Varvara judgment ( cited above, § 65 ), that a “consequence of cardinal importance flows from the principle of legality in criminal law, namely a prohibition on punishing a person where the offence has been committed by another”. In support of this argument the Court held as follows:
“64. The Court has previously examined this issue from the angle of Article 6 § 2 of the Convention.
65. In the case of A.P., M.P. and T.P. v. Switzerland, 29 August 1997, Reports of Judgments and Decisions 1997 ‑ V, a number of heirs had been punished for a criminal offence committed by the deceased. The Court considered that the criminal sanction imposed on the heirs for tax fraud attributed to the deceased was incompatible with the fundamental rule of criminal law that criminal liability does not survive the person who has committed the criminal act (ibid., § 48). Swiss law explicitly acknowledged this principle, and the Court affirmed that this rule was also required by the presumption of innocence enshrined in Article 6 § 2 of the Convention. Inheritance of the guilt of the dead is not compatible with the standards of criminal justice in a society governed by the rule of law. That principle was reaffirmed in the case of Lagardère ( Lagardère v. France, no. 18851/07, 12 April 2012, § 77), in which the Court reiterated that the rule that criminal liability does not survive the person who has committed the criminal act is not only required by the presumption of innocence enshrined in Article 6 § 2 of the Convention, but also by the principle that inheritance of the guilt of the dead is incompatible with the standards of criminal justice in a society governed by the rule of law.
66. Given the connection between Articles 6 § 2 and 7 § 1 of the Convention (see Guzzardi v. Italy, 6 November 1980, § 100, Series A no. 39), the Court considers that the rule reiterated by it in the preceding paragraph is also valid from the angle of Article 7 of the Convention, which requires that no one can be held guilty of a criminal offence committed by another. While it is true that anyone must be able at any time to ascertain what is permitted and what is prohibited via clear and detailed laws, a system which punished persons for an offence committed by another would be inconceivable.”
272. The Grand Chamber finds it appropriate to confirm the above reasoning. In the instant case, the companies G.I.E.M. S.r.l., Hotel Promotion Bureau S.r.l., R.I.T.A. Sarda S.r.l. and Falgest S.r.l. were not parties to proceedings of any kind. Only the legal representative of Hotel Promotion Bureau S.r.l. and Falgest S.r.l. and two shareholders in R.I.T.A. Sarda S.r.l. were indicted in a personal capacity. Thus the authorities imposed a sanction on the applicant companies for the actions of third parties, that is to say, except in the case of G.I.E.M. S.r.l., the actions of their legal representatives and/or shareholders acting in a personal capacity.
273. Lastly, in response to the Government ’ s allegation that Hotel Promotion Bureau, R.I.T.A. Sarda S.r.l. and Falgest had acted in bad faith (see paragraph 2 64 above ), the Court notes that there is nothing in the case file to suggest that the ownership of the property had been transferred to the applicant companies by their legal representatives ( see, to that effect, Article 6 of Directive 2014/42 /EU, paragraph 152 above ).
274. In conclusion, having regard to the principle that a person cannot be punished for an act engaging the criminal liability of another, a confiscation measure applied, as in the present case, to individuals or legal entities which are not parties to the proceedings, is incompatible with Article 7 of the Convention.
275. In the light of those considerations the Court holds as follows.
(a) There has been a violation of Article 7 in respect of the applicant companies as they were not parties to the criminal proceedings (see paragraph 274 above).
(b) There has been no violation of Article 7 in respect of Mr Gironda, in that the domestic courts ’ findings in the proceedings against him can be regarded, in substance, as a declaration of liability meeting the requirements of this Article (see paragraph 262 above).
V. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1
276. The applicants complained of a violation of their property rights. They relied on Article 1 of Protocol No. 1, which reads as follows :
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
277. The Court finds that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.
278. The applicant company G.I.E.M. S.r.l. submitted that the confiscation measure constituted a deprivation of property. It argued that, by allowing, through a general formulation, the extension of such confiscation beyond the land directly concerned by the unlawful development, section 19 of Law no. 47/1985 infringed Article 1 of Protocol No. 1. That Article allowed legitimate interference only on the basis of a law that was accessible, precise and foreseeable. The applicant company took the view that section 19 should have indicated in greater detail the limits within which it was possible to decide on confiscation in relation to the established facts, by indicating, according to a principle of reason and proportionality, the extent of the land that could be confiscated in relation to the buildings erected thereon and the unlawful conduct as established in material and mental terms. It explained that the lack of clarity and precision of the national law, and of the regional law, which had been regarded by the Court as “obscure and poorly worded” in its Sud Fondi S.r.l. and Others judgment ( merits, cited above ), had made it possible to confiscate land of an area that was three times as large as that covered by the planning permission issued by the Bari municipal authority. An even more serious consequence was that this had also affected the applicant company ’ s property even though the company had not been involved in the acts in respect of which the criminal proceedings had been brought.
As to the proportionality of the impugned measure, the applicant company submitted that the transformation work linked to the construction by the owners of land adjacent to its own should, at most, have obliged it to forfeit the transformed land alone.
279. The companies Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l. pointed out that the Court, in its case-law, had attached particular weight to the requirement of legality. In the Varvara judgment ( cited above ), but also in the Sud Fondi S.r.l. and Others judgment ( merits, cited above ), it had established that the offence in respect of which the penalty had been imposed had no legal basis, in breach of the Convention, and that the penalty imposed on the applicant had been arbitrary. That finding had then led the Court to state that the interference with the applicant ’ s right to the peaceful enjoyment of his possessions was equally arbitrary and that there had been a violation of Article 1 of Protocol No. 1. Moreover, the applicant companies took the view that a State ’ s interference with the right to enjoyment of property had to strike a fair balance between the demands of the general interest of the community and the imperatives of guaranteeing the individual ’ s fundamental rights. They explained that, in the present case, the extent of the confiscation affecting the property had to be taken into account : the eighty-eight plots that were built upon totalled 15, 920 sq. m, while the confiscation had affected an additional area that was 14. 5 times as large.
280. The company Falgest S.r.l. and Mr Gironda argued that the confiscation imposed on them constituted a deprivation of property within the meaning of the first paragraph of Article 1 of Protocol No. 1.
281. In their submission, the impugned measure ordered by the Court of Cassation was clearly illegal and arbitrary and, in any event, devoid of a sufficiently clear, accessible and foreseeable legal basis. The applicants referred to the finding in the Varvara judgment ( cited above ) to the effect that the illegality in criminal terms of the sanction for unlawful site development that had been found under Article 7 of the Convention entailed the illegality “ in property terms ” of the confiscation under Article 1 of Protocol No. 1.
282. Should the Court take the view that the impugned confiscation had a legal basis, the applicants argued that it was disproportionate to the aim pursued and that it had not struck a fair balance between the interests at stake. In a case involving mere reservation documents for the future acquisition by private purchasers of individual housing units covering less than 11% of the area in question, the confiscation of the entire property had not constituted a proportionate measure. The general interest could have been served by less intrusive measures.
283. The Government submitted that the confiscation measures in respect of the applicants ’ property had been ordered in accordance with the second paragraph of Article 1 of Protocol No. 1 and that the resulting interference did not constitute a violation of that provision. The impugned measures had a legal basis, pursued a legitimate aim and were proportionate. As to the proportionality aspect, the Government explained that less restrictive measures could not have been envisaged. In their view, it would have been technically very difficult, if not impossible, to limit the confiscation merely to the areas that had been built upon and to have separated those areas from the undeveloped land. In the Government ’ s view, a purely partial confiscation of the land would have frustrated the legitimate aims pursued by the State, namely to ensure the conformity of the plots in question with the planning regulations, environmental protection and the punishment of those responsible for the unlawful land transformation. In any event, the Government argued that the State had to be afforded a broad margin of appreciation as to the choice of instruments to be used in order to find the best solutions to guarantee environmental protection.
284. As regards the first applicant company, the Government observed that the confiscated land had been returned.
285. As to the property of the companies Hotel Promotion Bureau S.r.l. and R.I.T.A. Sarda S.r.l, the Government argued that the confiscation was proportionate, as only sixteen of the eighty-eight housing units had been confiscated.
286. Lastly, as to the company Falgest S.r.l., the Government disputed the percentage of undeveloped land that had been confiscated and argued that it was not 89% but less than 50% of the whole property.
287. The Court observes that in its judgments in the cases of Sud Fondi S.r.l. and Others ( merits, cited above, §§ 125 - 29), and Varvara ( cited above, § 83), it found that the confiscation of the applicants ’ land and buildings had constituted an interference with their right to the peaceful enjoyment of their property as protected by Article 1 of Protocol No. 1.
288. The Grand Chamber reaches the same conclusion in the present case. It must therefore be determined which of the rules in that provision is applicable.
289. Article 1 of Protocol No. 1 comprises three distinct rules: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, amongst other things, to control the use of property in accordance with the general interest and to secure the payment of penalties. The three rules are not, however, “distinct” in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule (see, among other authorities, James and Others v. the United Kingdom, 21 February 1986, § 37, Series A no. 98, and Iatridis v. Greece [GC], no. 31107/96, § 55, ECHR 1999-II).
(ii) Application in the present case
290. In the Sud Fondi S.r.l. and Others judgment ( merits, cited above, §§ 128- 29), the Court stated as follows:
“128. The Court notes that the present case can be distinguished from that of AGOSI v. the United Kingdom (24 October 1986, Series A no. 108), where confiscation was ordered in respect of property that was the subject-matter of an offence ( objectum sceleris ), following the conviction of the persons charged, for in the present case the confiscation was ordered following acquittal. For the same reason the present case can be distinguished from C.M. v. France ((dec.), no. 28078/95, ECHR 2001 ‑ VII) or Air Canada v. the United Kingdom (5 May 1995, Series A no. 316 ‑ A), in which the confiscation, ordered after the conviction of the accused, concerned property which was the instrumentum sceleris and was in the possession of third parties. As regards the proceeds of crime ( productum sceleris ), the Court observes that it has examined a case where the confiscation had followed the applicant ’ s conviction (see Phillips v. the United Kingdom, no. 41087/98, §§ 9-18, ECHR 2001-VII) and cases where confiscation had been ordered independently of the existence of any criminal proceedings, because the applicant companies ’ property had been presumed to be of unlawful origin (see Riela and Others v. Italy (dec.), no. 52439/99, 4 September 2001; Arcuri and Others v. Italy (dec.), no. 52024/99, 5 July 2001; and Raimondo v. Italy, 22 February 1994, § 29, Series A no. 281-A) or to have been used for unlawful activities ( Butler v. the United Kingdom (dec.), no. 41661/98, 27 June 2002). In the first case cited above, the Court held that the confiscation constituted a penalty for the purposes of the second paragraph of Article 1 of Protocol No. 1 ( see Phillips, cited above, § 51, and, mutatis mutandis, Welch v. the United Kingdom, 9 February 1995, § 35, Series A no. 307-A ), whereas in the other cases it took the view that it was a matter of control of the use of property.
129. In the present case, the Court takes the view that it is not necessary to determine whether the confiscation falls within the first or second category, as in any event it is the second paragraph of Article 1 of Protocol No. 1 which applies ( see Frizen v. Russia, no. 58254/00, § 31, 24 March 2005).”
291. The Grand Chamber does not see any reason to reach a different conclusion in the present case.
( b ) Compliance with Article 1 of Protocol No. 1
292. The Court reiterates that Article 1 of Protocol No. 1 above all requires that any interference by a public authority with the enjoyment of possessions be in accordance with the law: under the second sentence of the first paragraph of this Article, any deprivation of possessions must be “subject to the conditions provided for by law”; the second paragraph entitles the States to control the use of property by enforcing “laws”. Moreover, the rule of law, which is one of the fundamental principles of a democratic society, is inherent in all the Articles of the Convention (see Amuur v. France, 25 June 1996, § 50, Reports 1996 ‑ III, and Iatridis, cited above, § 58 ).
293. Moreover, since the second paragraph of Article 1 of Protocol No. 1 is to be construed in the light of the general principle enunciated in the opening sentence of that Article, there must exist a reasonable relationship of proportionality between the means employed and the aim sought to be realised: the Court must determine whether a fair balance has been struck between the demands of the general interest in this respect and the interest of the individual company concerned. In so determining, the Court recognises that the State enjoys a wide margin of appreciation with regard to the means to be employed and to the question of whether the consequences are justified in the general interest for the purpose of achieving the objective pursued ( Bosphorus Hava Yolları Turizm ve Ticaret Anonim Şirketi v. Ireland [GC], no. 45036/98, § 149, ECHR 2005 ‑ VI ).
( ii ) Application to the present case
294. In the present case, it is not necessary to decide whether the violation of Article 7 found above (see paragraph 275 above) has the automatic consequence that the impugned confiscation measures were devoid of legal basis and therefore breached Article 1 of Protocol No. 1, having regard to the findings below as to whether the measures pursued a legitimate aim and whether they were proportionate.
295. The legitimacy of State policies in favour of environmental protection cannot be called into question, because the well-being and health of individuals are thereby also guaranteed and defended (see Depalle v. France [GC], no. 34044/02, § 84, ECHR 2010, and Brosset-Triboulet and Others v. France [GC], no. 34078/02, § 87, 29 March 2010 ). However, it must be said that the examination of the current situation, which is based on information provided by the parties, leaves some doubt as to the fulfilment of the aim which was relied upon to justify the measures contested by the applicants.
296. Firstly, the land confiscated from G.I.E.M. S.r.l. was returned to the applicant company in 2013 following an application lodged with the Bari District Court by the mayor of that city. The return was carried out on the basis of the principles established by the Court in the Sud Fondi S.r.l. and Others judgment ( merits, cited above ) under Article 7 of the Convention and Article 1 of Protocol No. 1 ( see paragraphs 42 -43 above ).
297. Secondly, as regards Hotel Promotion S.r.l. and R.I.T.A. Sarda S.r.l., as at 29 July 2015 the confiscated properties were still occupied by their owners. In addition, in May 2015 the municipal council of Golfo Aranci acknowledged that it was currently in the interest of the community to retain the confiscated real-estate complex in view of the possibility of using the units to deal with emergencies, by allowing the housing to be rented, directly or indirectly, by individuals with low income ( see paragraph 74 above ).
298. Lastly, in May 2015, the expert commissioned by Falgest S.r.l. and Mr Gironda reported on the state of disrepair in which the confiscated complex now stood, as it had not been maintained by the municipal authority, which was then the owner ( see paragraph 87 above ).
299. It may thus be questioned whether the confiscation of the property has actually contributed to the protection of the environment.
300. As to the proportionality of the measure, Article 1 of Protocol No. 1 requires of any interference that there should be a reasonable relationship of proportionality between the means employed and the aim pursued ( see Jahn and Others v. Germany [GC], nos. 46720/99, 72203/01 and 72552/01, §§ 83-95, ECHR 2005-VI). This fair balance will be upset if the person concerned has to bear an individual and excessive burden ( see Sporrong and Lönnroth, cited above, §§ 69-74, and Maggio and Others v. Italy, nos. 46286/09, 52851/08, 53727/08, 54486/08 and 56001/08, § 57, 31 May 2011).
301. The following factors may be taken into account in order to assess whether the confiscation was proportionate: the possibility of less restrictive alternative measures such as the demolition of structures that were incompatible with the relevant regulations or the annulment of the development plan; the unlimited nature of the sanction, as it affected both developed and undeveloped land, and even areas belonging to third parties; and the degree of culpability or negligence on the part of the applicants or, at the very least, the relationship between their conduct and the offence in question.
302. In addition, the importance of the procedural obligations under Article 1 of Protocol No. 1 must not be overlooked. Thus the Court has, on many occasions, noted that, although Article 1 of Protocol No. 1 contains no explicit procedural requirements, judicial proceedings concerning the right to the peaceful enjoyment of one ’ s possessions must also afford the individual a reasonable opportunity of putting his or her case to the competent authorities for the purpose of effectively challenging the measures interfering with the rights guaranteed by this provision (see Sovtransavto Holding v. Ukraine, no. 48553/99, § 96, ECHR 2002 ‑ VII; Capital Bank AD v. Bulgaria, no. 49429/99, § 134, ECHR 2005 ‑ XII; Anheuser-Busch Inc. v. Portugal [GC], no. 73049/01, § 83, ECHR 2007-I; J.A. Pye (Oxford) Ltd and J.A. Pye (Oxford) Land Ltd v. the United Kingdom [GC], no. 44302/02, § 57, ECHR 2007-III; Zafranas v. Greece, no. 4056/08, § 36, 4 October 2011; and Giavi v. Greece, no. 25816/09, § 44, 3 October 2013; see also, mutatis mutandis, Al ‑ Nashif v. Bulgaria, no. 50963/99, § 123, 20 June 2002, and Grande Stevens and Others, cited above, § 188 ). An interference with the rights provided for by Article 1 of Protocol No. 1 cannot therefore have any legitimacy in the absence of adversarial proceedings that comply with the principle of equality of arms, allowing discussion of aspects that are important for the outcome of the case. In order to ensure that this condition is satisfied, the applicable procedures should be considered from a general standpoint (see, among other authorities, AGOSI, cited above, § 55; Hentrich v. France, § 49, 22 September 1994, Series A no. 296 ‑ A; Jokela v. Finland, no. 28856/95, § 45, ECHR 2002 ‑ IV; Gáll v. Hungary, no. 49570/11, § 63, 25 June 2013; and Sociedad Anónima del Ucieza v. Spain, no. 38963/08, § 74, 4 November 2014 ).
303. The automatic application of confiscation in cases of unlawful site development, as provided for – save in respect of bona fide third parties ‑ by Italian legislation is clearly ill- suited to these principles since it does not allow the courts to ascertain which instruments are the most appropriate in relation to the specific circumstances of the case or, more generally, to weigh up the legitimate aim against the rights of those affected by the sanction. In addition, as the applicant companies were not parties to the impugned proceedings, they did not have the benefit of any of the procedural safeguards mentioned in paragraph 3 02 above.
304. In conclusion, the Court takes the view that there has been a violation of Article 1 of Protocol No. 1 to the Convention in respect of all the applicants on account of the disproportionate nature of the confiscation measure.
VI. ALLEGED VIOLATION OF ARTICLE 6 § 1 AND ARTICLE 13 OF THE CONVENTION
305. The company G.I.E.M. S.r.l. complained that it had not had access to a court, arguing that it had no opportunity to defend itself or to present arguments against the confiscation before a criminal court ruling on the merits or in civil proceedings. It alleged that the possibility of lodging an interlocutory application for review of enforcement had not allowed it to remedy those shortcomings. It relied on Article 6 § 1 and Article 13 of the Convention.
306. Referring to Article 13 of the Convention, the company Falgest S.r.l., for its part, alleged that there had been no accessible and effective domestic remedy by which to complain of a violation of Article 7 of the Convention or of Article 1 of Protocol No. 1 on account of the confiscation ordered by the Court of Cassation.
The relevant provisions read as follows :
“1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal established by law. ... ”
“Everyone whose rights and freedoms as set forth in [the] Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.”
307. The Government disputed those arguments.
308. Finding that these complaints are not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention and that they are not barred by any other ground of inadmissibility, the Court declares them admissible.
309. The Court takes the view, however, that it is not necessary to examine these complaints because they are covered by the complaints already examined under Article 7 of the Convention and Article 1 of Protocol No. 1.
VII. ALLEGED VIOLATION OF ARTICLE 6 § 2 OF THE CONVENTION
310. Mr Gironda also complained that the principle of the presumption of innocence had been breached by the Court of Cassation in deciding to order the confiscation of his land even though the case against him had been dismissed as statute-barred. He relied on Article 6 § 2 of the Convention, which reads as follows :
“Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.”
311. The Court notes that this complaint is related to that which it examined under Article 7 of the Convention and that it must therefore also be declared admissible.
312. The applicant emphasised that the Court of Cassation had not merely impugned the mistake of law committed by the Court of Appeal. In his view, by substituting its own ruling for that of the court below in a non ‑ customary manner, the Court of Cassation had established the existence of all the necessary elements for the offence of unlawful site development to be made out, that is, in both its material and mental elements. The applicant explained that, according to the Court of Cassation, the change in use of the buildings was proved by the statements of third parties and by the documents in the file. In that court ’ s view, according to the applicant, the unlawful nature of the development was not in doubt. This decision thus clearly breached the principle of the presumption of innocence enshrined in Article 6 § 2 of the Convention.
313. The Government disputed this contention and referred to the observations they had submitted under Article 7.
314. Article 6 § 2 protects the right of any person to be “ presumed innocent until proved guilty according to law ”. Regarded as a procedural safeguard in the context of the criminal trial itself, the presumption of innocence also has another aspect. Its general aim, in this second aspect, is to protect individuals who have been acquitted of a criminal charge, or in respect of whom criminal proceedings have been discontinued, from being treated by public officials and authorities as though they are in fact guilty of the offence charged. In these cases, the presumption of innocence has already operated, through the application at trial of the various requirements inherent in the procedural guarantee it affords, to prevent an unfair criminal conviction being imposed. Without protection to ensure respect for the acquittal or the discontinuance decision in any other proceedings, the fair ‑ trial guarantees of Article 6 § 2 could risk becoming theoretical and illusory. What is also at stake once the criminal proceedings have concluded is the person ’ s reputation and the way in which that person is perceived by the public. To a certain extent, the protection afforded under Article 6 § 2 in this connection may overlap with the protection afforded by Article 8 (see, for example, Zollman v. the United Kingdom (dec.), no. 62902/00, ECHR 2003 ‑ XII; Taliadorou and Stylianou v. Cyprus, nos. 39627/05 and 39631/05, §§ 27 and 56-59, 16 October 2008; and Allen, cited above, §§ 93 ‑ 94 ).
315. Moreover, guilt cannot be legally established where the proceedings have been closed by a court before the gathering of evidence or the conducting of hearings that would have allowed the court to determine the case on its merits (see Baars v. the Netherlands, no. 44320/98, §§ 25-32, 28 October 2003, and Paraponiaris, cited above, § § 30-33 ). By way of example, in the case of Didu v. Romania ( no. 34814/02, §§ 40-42, 14 April 2009 ), the Court found that the fact that the court ruling at last instance had quashed the acquittal decisions by the lower courts, and had found the person concerned guilty whilst closing the proceedings because criminal liability was statute-barred, had breached Article 6 § 2 of the Convention, since the defence rights had not been respected in the proceedings before it, even though that last-instance court was the first court to have found the applicant guilty. Similarly, in Giosakis v. Greece (no. 3) (no. 5689/08, § 41, 3 May 2011), the Court found that Article 6 § 2 of the Convention had been breached by the fact that the Court of Cassation had quashed the acquittal by the Court of Appeal whereas it had at the same time found the proceedings to be statute-barred.
316. It can be seen from this case-law that a problem arises under Article 6 § 2 of the Convention where a court which terminates proceedings because they are statute-barred simultaneously quashes acquittals handed down by the lower courts and, in addition, rules on the guilt of the person concerned.
(b) Application in the present case
317. In the present case, the applicant Mr Gironda was acquitted on appeal and the confiscation measure was revoked after the development plan had been found compatible with the land-use plan and planning regulations ( see paragraph 84 above ). Subsequently that decision was quashed, without being remitted, by the Court of Cassation, which found that the applicant ’ s liability had been proved. The applicant was thus declared guilty, in substance, by the Court of Cassation, notwithstanding the fact that the prosecution of the offence in question was statute-barred. This fact breaches the right to the presumption of innocence.
318. Having regard to the foregoing, there has been a violation of Article 6 § 2 of the Convention in the present case in respect of Mr. Gironda.
319. In their observations of 26 May 2015, the companies Hotel Promotion S.r.l. and R.I.T.A. Sarda S.r.l. reiterated their complaint concerning a violation of Article 6 of the Convention. Similarly, the company Falgest S.r.l. and Mr Gironda again complained of a violation of Article 6 § 2 of the Convention in respect of five other individuals who, like Mr Gironda, had been prosecuted for unlawful site development. Those persons were also originally applicants before the Court. The complaints in question were declared inadmissible by decisions on the relevant parts of the applications on 5 June 2012 and 30 April 2013.
320. Decisions as to admissibility are final. It follows that the Court lacks jurisdiction to entertain these complaints ( see, mutatis mutandis, Bulena v. the Czech Republic, no. 57567/00, § 37, 20 April 2004).
IX. APPLICATION OF ARTICLE 41 OF THE CONVENTION
321. Article 41 of the Convention provides:
“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”
322. The applicants all filed their claims for just satisfaction within the time-limits fixed by the President of the Court.
323. In their observations before the Grand Chamber, the Government did not comment on the applicants ’ claims for just satisfaction.
324. Having regard to the circumstances of the case, the Court takes the view that the question of the application of Article 41 of the Convention is not ready for decision. Consequently, it will reserve the question in its entirety and fix the subsequent procedure, bearing in mind the possibility of an agreement being reached between the respondent State and the applicants (Rule 75 § 1 of the Rules of Court). The Court gives the parties three months from the date of the present judgment for that purpose.
1. Decides, unanimously, to join the applications;