Medieval Trade in the Mediterranean, p 375; William Shakespeare, El mercader de

The third rule of P1-1 to the ECHR allows the contracting states a power to impose restrictions on the use of property that falls within the ambit of the second paragraph of P1-1. The notion of ‘control’ of property is correspondingly wider than ‘deprivation’ in the second rule.103 The second paragraph of P1-1 is worded as follows:

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.

The power of a state to intervene with a person’s right to property by controlling the use of property which falls within the third rule is a wide one. Control of the use of property has two functions, which serve as the basis of two different objectives: to serve the public interest and to secure the payment of taxes or other contributions or penalties.104

99 _{Xenides-Arestis v. Turkey (2005) 44 EHRR SE 185.}

100 _{Demopoulos and Others v. Turkey (2010) ECHR 306. The cases concerning G/Cypriot property claims} will be examined in Chapter 3.

101_{Demopoulos and Others v. Turkey (2010) ECHR 306, paras.114–118.}

102 _{Rhodri C. Williams and Ayla Gürel, The European Court Of Human Rights and the Cyprus Property} Issue: Charting a Way Forward, Peace Research Institute Oslo (2011) pp. 4–6.

103 _{Harris and others (n6) p.686.}

104 _{Sermet (n 40) p.25; Harris and others (n6) pp. 686–694.}

2.1.3.1 Control of the Use of Property in the General Interest

The power of control of the state under the third rule is wide and not restricted. Public authorities may control the use of property by requiring positive action by individuals and legal persons. A state may also control it by imposing restrictions on the activities of the owner. The situations for imposing restrictions may arise from town planning, environmental orders, economic regulation of professionals, sanctioned regimes, and the regulation of the sale of alcohol and crime control.105

In 1982, a new type of interference ‘with the substance of ownership’ was introduced by the Court in the case of Sporrong Lönnroth v Sweden106 based on the first rule of P1-1 to the ECHR. Under the Convention, there is no any definition or criteria provided in order to differentiate between interference that amounts to control of the use of property and interference with the substance of property.107 As a result of this absence, numerous disputes have been raised in this context. For instance, in the case of Sporrong Lönnroth,108 the Court recognised that the prohibitions on the construction in question clearly amounted to a control of the use of property, which falls within the ambit of the second rule of the ECHR. It further held that the ‘expropriation permits’ must be examined under the first rule. This is because those permits were an initial step in a procedure leading to deprivation. Taking this as a ground it decided that expropriation permits constituted interference with property and thus did not fall within the meaning of the second rule of P1-1.109

Under P1-1 to the Convention, it is explicitly indicated that the notion of ‘control’ concerns the use of property. Taking into account the Court’s case law, it seems that this term, in practice, also concerns the right to dispose of property. For instance, in the case of X v. Austria,110 the Commission stated that restrictions on the amount of rent for certain leases, as well as the right of the owner to terminate the lease, did not constitute a deprivation of property but could constitute control of the use of property. On the grounds of its reasoning, it further maintained that interference with an exclusive right of the

105 _ibid.

106 _{Sporrong L}önnroth v. Sweden (1982) 5 EHRR 35; Sermet (n 40), p.182. 107 _{Sermet (n 40), p. 25; Coban (n 19) p.182.}

108Sporrong Lönnroth v Sweden (1982) 5 EHRR 35, paras. 64–65.

109 _{Sporrong L}önnroth v Sweden (1982) 5 EHRR 35, paras. 64–65; Sermet (n 40) pp.24–25. 110_{X v. Austria, (1979) 3 EHRR 285 72 DR 17, para. 80; Sermet (n 40) pp.24–28.}

owner failed to equate to interference with the enjoyment of a possession. Another example could be the case of Banèr v. Sweden,111 _{in which the Court stated that exclusive}

fishing rights that came together with ownership of a lakeside property and that were abolished later by law could be considered as a possession. Additionally, it has been held that abolishing those rights could be determined as interference with property. On this ground, the Court stated that the restrictions of the applicant’s property constituted control of use.

In the case of Pine Valley Developments112 the Court recognised that the planning measures, which did not deprive the owner of his legal title to the property, fell within the meaning of the control of use of property. Here, the applicants in this judgment alleged that there had been a deprivation of their possession on the basis of the Irish Supreme Court’s decision, which ruled that the outline planning permission for the applicant’s land was null and void. According to the applicants, this decision prevented them from using their land for industrial purposes and also reduced its value. In this regard, the Court declared that the interference fell under the third rule and constituted a control of the use of the property rather than deprivation under the second rule. In reaching this decision, the Court explained its rationale on three grounds: first, the applicants retained ownership of the land; second, the land could be used for alternative means such as agricultural purposes even though it could not be used for industrial purposes as they had intended, and finally, it added that although the value of the land in question was substantially reduced as claimed by the applicants, this land was not rendered worthless.113

In light of these considerations, the absence of a distinction as to when an act constitutes deprivation or control of use regarding the duty to compensate has been defined as ‘an untidy and unsatisfactory’ one.114 _{The Court’s disinclination in numerous cases to classify}

interference as a control rather than as a deprivation was determined by taking into account the fact that compensation must be paid when a person is deprived of property.

111_{Banèr v. Sweden (1989) 60 DR 125, paras. 5-6; Mellacher v. Austria (1989) 12 EHRR 391.} 112_{Pine Valley Developments v. Ireland (1991) 14 EHRR 319, para.55.}

113 _{Pine Valley Developments v. Ireland (1991) 14 EHRR 319, paras. 55–56; Denev v. Sweden (1989) 59} DR 127, paras.55–56.

114 _{David Anderson, ‘Compensation for Interference with Property’, European Human Rights Review,} (1999), vol. 6, p.553; Rook (n 15) p. 75.

In this regard, a judge of the Court has the discretion to decide whether an absence of compensation is acceptable or not.115

2.1.3.2 Control of the Use of Property to Secure Payment of Taxes and Other Contributions or Penalties

The third rule of P1-1 explicitly grants power to a state ‘to enforce such laws as it deems necessary to secure the payment of taxes or other contributions or penalties’. The powers of the contracting states under this rule are very wide as the power to levy taxes is one of the fundamental attributes of national sovereignty.116 The power to secure the payment of taxes is a specific aspect of the state’s right to control the use of property 117 and thus this power is not restricted by the Convention, apart from the non-discrimination rule in Article 14.118 Accordingly, it has been suggested that the decision of a state to raise taxes is not examined by the Convention organs.119 However, the protection of property rights is not entirely excluded from the concept of taxation.

In the case of Svenska Mangementgruppen AB v. Sweden,120 the European Commission determined that ‘a financial liability arising out of the raising of taxes or contributions may adversely affect the guarantee of ownership if it places an excessive burden on the person concerned or fundamentally interferes with his financial position’. Therefore the Court retains the power to review whether the imposition of taxes is disproportionate and unjustifiably interferes with property rights.121 _{Accordingly, the Convention bodies}

review the proportionality between the level of taxes and the means of those who are required to pay them.122 The proportionality test has developed within this area. As a result, due to the state’s right to control the use of property, the power to secure the payment of taxes or other contribution or penalties falls within the ambit of the third rule.

115 _{ibid., p. 7; Rook (n 15) pp. 74–75.} 116 _{Sermet (n 40) pp. 24–25.}

117 _{Harris and others (n6) pp.692–693.} 118 _{Sermet (n 40) p. 25; Coban (n 19) p.182.} 119 _{Sermet (n 40) pp 25–27.}

120 _{Svenska Managementgruppen AB v. Sweden (1985) 45 DR 211, para. 211.} 121 _{Rook (n 15) p.86.}

122 _{Sermet (n 40) p. 25.}