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On selling state-owned land without an auction

Case No. 11/2012

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

IN THE NAME OF THE REPUBLIC OF LITHUANIA

RULING

ON THE COMPLIANCE THE PROVISION OF THE FIRST PARAGRAPH OF ITEM 2.15 (WORDING OF 29 NOVEMBER 2004) OF THE RESOLUTION OF THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA (NO. 692) “ON THE SALE AND LEASE OF NEW Plots OF DIFFERENT-Purpose STATE-OWNED LAND” OF 2 JUNE 1999 WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

 9 October 2014, No. KT44-N12/2014

Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Elvyra Baltutytė, Vytautas Greičius, Danutė Jočienė, Vytas Milius, Egidijus Šileikis, Algirdas Taminskas, and Dainius Žalimas

The court reporter—Daiva Pitrėnaitė

The Constitutional Court of the Republic of Lithuania, pursuant to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Articles 1 and 531 of the Law on the Constitutional Court of the Republic of Lithuania, on 8 October 2014, in the Court’s hearing considered, under written procedure, constitutional justice case No. 11/2012 subsequent to the petition (No. 1B-21/2012) of the First Vilnius City Local Court, the petitioner, requesting an investigation into whether the provision “in the cases where, according to the approved detailed plan of the territory, the formation of new plots of land is not provided (is not allowed), vacant plots of state-owned land, edging between private plots of land or (and) leased plots of state-owned land and roads (streets), which do not exceed 0.04 ha in the territories in which, according to territorial planning documents, the construction of residential houses is provided, and which do not exceed 0.5 ha in the territories in which no such construction is provided, may, upon the approval by municipal councils and a decision of the county chief, be sold without an auction to the owners of the neighbouring plots of land that are registered in the Real Property Register, if they agree to the selling price of the plots of land, or if such plots of land are leased to the lessees of neighbouring plots of state-owned land” of the first paragraph of Item 2.15 (wording of 29 November 2004) of the Resolution of the Government of the Republic of Lithuania (No. 692) “On the Sale and Lease of New Plots of Different-Purpose State-Owned Land” of 2 June 1999, to the extent that it consolidates the sale, without an auction, of vacant plots of state-owned land edging between private plots of land or (and) leased plots of state-owned land and roads (streets) to the owners of the neighbouring plots of land that are registered in the Real Property Register, was not in conflict with Item 2 of Article 94 of the Constitution of the Republic of Lithuania, the constitutional principle of a state under the rule of law, and Items 4 and 5 of Paragraph 5 Article 10 of the Republic of Lithuania’s Law on Land (wording of 27 January 2004).

The Constitutional Court

has established:

I

The petition of the First Vilnius City Local Court (at present—the Vilnius City Local Court), the petitioner, is substantiated by the following arguments.

  1. Item 4 of Paragraph 5 Article 10 of the Republic of Lithuania’s Law on Land (wording of 27 January 2004) provides that plots of state-owned land edging between private plots of land shall be sold without an auction to the owners of such private plots of land. The Government established, by means of the impugned legal regulation, that vacant plots of state-owned land, edging not only between private plots of land, but also between private plots of land and leased plots of state-owned land and roads (streets), may be sold without an auction. Thus, the impugned provision of the government resolution consolidates the legal regulation that is different from that established in the Law on Land. However, the substatutory legal act adopted by the Government is meant to implement the said law.
  2. Item 5 of Paragraph 5 of Article 10 of the Law on Land provides that state-owned land plots are sold without an auction in other cases specified by law. Such legal regulation means that only the legislature enjoys the discretion to establish as to which plots of state-owned land are sold without an auction. The Government does not enjoy such a right. The Law on Land commissions the Government to establish the procedures for selling state-owned land plots by auction and without an auction, i.e., only the procedures for acquiring state-owned land as ownership.
  3. Having established, by means of the impugned legal regulation, the instance where vacant plots of state-owned land, edging between private plots of land and leased plots of state-owned land and roads (streets) may be sold without an auction, the Government created new norms of a general character and such norms compete with the norms of the law. This is not in line with Item 2 of Article 94 of the Constitution, according to which, the Government shall execute laws. This is also not in line with the constitutional principle of a state under the rule of law which gives rise to the requirement that, in the course of the adoption of substatutory acts, the hierarchy of legal acts must not be violated and the imperative legal regulation established by law must not be changed.

II

  1. By means of the Ordinance of the Prime Minister (No. 266) “On the Representation at the Constitutional Court” of 8 October 2012, Audrius Petkevičius, Director of the Department of Land Policy (at present—the Department of Land and Resources Policy) of the Ministry of Agriculture of the Republic of Lithuania, Gintarė Tumalavičienė, Head of the Land Law Division of the same department, and Eglė Izokaitytė, chief specialist of the Law Application Division of the Law and Control Department of the Ministry of Environment of the Republic of Lithuania, were appointed to act as the representatives of the Government, the party concerned.
  2. In the course of the preparation of the case for the Constitutional Court’s hearing, written explanations were received from the representatives of the party concerned—Audrius Petkevičius and Gintarė Tumalavičienė—wherein it is maintained that the impugned provisions of the first paragraph of Item 2.15 (wording of 29 November 2004) of the Government Resolution (No. 692) “On the Sale and Lease of New Plots of Different-Purpose State-Owned Land” of 2 June 1999 (hereinafter also referred to as government resolution No. 692 of 2 June 1999) is not in conflict with the Constitution. The position of the representatives of the party concerned is substantiated by the following arguments.

2.1. In the course of the land reform when plots of state-owned land were formed, due to deficiencies of the process of territorial planning and other reasons, some vacant plots of state-owned land were left. Such plots of land, because of some of their characteristics—a small size, an awkward configuration, etc.—could not be formed as separate plots of land and properly and independently utilised. Such edging vacant plots of state-owned land used to increase the areas of derelict land, used to hinder the implementation of the objectives of the land reform, used to be economically useless for the state, they used to spoil the landscape and to create problems to the users of neighbouring plots of land. The opportunity to purchase, without an auction, i.e., under preferential conditions, an edging plot of state-owned land, where it is impossible to form such a plot of land as a new plot of land utilised independently, had to ensure the formation of a convenient use of land, an effective use of vacant state-owned land and the raising of additional revenue to municipal and state budgets.

Thus, even though, prior to the setting forth of the Law on Land in its wording of 27 January 2004, it used not to establish any cases where plots of state-owned land could be sold without an auction, in an attempt to change the existing situation and to create the conditions for proper utilisation of as much as possible state-owned land, these instances were provided for within the legal regulation established by the Government.

2.2. The verbatim construction of Item 4 of Paragraph 5 Article 10 of the Law on Land (wording of 27 January 2004), which provides that that plots of state-owned land edging between private plots of land, if they do not exceed the size set by the Government, shall be sold without an auction to the owners of such private plots of land, does not disclose the meaning of this provision. The said provision of the law does not attempt to define the notion of an edging plot of state-owned land, since the establishment of one of the most important criteria—the size of such a plot of land—falls within the competence of the Government. Thus, in defining the situations where a plot of state-owned land should be regarded as an edging one, the invoking of the formulations of Item 4 of Paragraph 5 of Article 10 of the Law on Land is not enough. The purpose of this provision of the law is different, i.e., to establish which persons are entitled to acquire edging plots of state-owned land, i.e., to establish that the persons who, after they have purchased such a plot, would not be able to join it with the plot of land held by them by right of ownership, may not aspire for the acquisition of such a plot of state-owned land without an auction. Thus, the objective of such legal regulation is to create preferential conditions for purchasing an edging plot of state-owned land for the persons who would be able to use it according to its purpose in the simplest way.

Consequently, after the impugned provision of the government resolution had provided for the situations where a certain area of state-owned land could be deemed to be as an edging one, it did not establish any new additional situation for selling a plot of state-owned land without an auction.

2.3. The said provision of the impugned government resolution supplemented the list of the criteria according to which a plot of state-owned land is deemed to be an edging one and established that such an area of land could not only be one edging between private plots of land or (and) leased plots of state-owned land, but also between such plots and roads (streets). These changes had been determined by the frequent actual instances where certain areas of state-owned land not exceeding the maximum sizes used to be adjacent to roads (streets) and it used to be impossible to form them as separate plots of land.

According to the provisions of the Republic of Lithuania’s Law on Roads, the land area occupied by roads (streets) are used for special purposes and are managed by the owners or trustees as defined by this law. Thus, both in situations where an area of state-owned land is edging only between private or (and) leased plots of state-owned land and in situations where an area of state-owned land is edging between such plots of land and roads (streets), an analogous situation is the case, i.e., it is impossible to properly utilise such an area of land in an independent manner. Therefore, if, upon the accomplishment of the planning of a territory, it became evident that this area of land is not needed for the development of the infrastructure of the road, the possibilities of its privatisation or its leasing to the owners or lessees of neighbouring plots of land are created.

Thus, the impugned provision of the government resolution is not in conflict with Item 4 of Paragraph 5 of Article 10 of the Law on Land, since it is not in conflict with the essence of this provision of the law, according to which, an edging area of state-owned land may only be purchased by the owners of neighbouring plots of private land.

2.4. The selling of plots of state-owned land edging not only between private plots of land, but also between such plots of land and roads (streets), should not be regarded as separate cases when state-owned land is sold without an auction, therefore, there is no ground for stating that the impugned provisions of the government resolution is in conflict with Item 5 of Paragraph 5 of Article 10 of the Law on Land that provides that plots of state-owned land are sold without an auction in other cases specified by law.

2.5. Since the impugned provision of the government resolution is not in conflict with the provisions of the Law on Land, there is no ground for stating that it is in conflict with Item 2 of Article 94 of the Constitution and the constitutional principle of a state under the rule of law.

  1. In the course of the preparation of the case for the Constitutional Court’s hearing, written explanations were also received from Eglė Izokaitytė, a representative of the party concerned, in which it is maintained that the impugned provision of the first paragraph of Item 2.15 (wording of 29 November 2004) of government resolution No. 692 of 2 June 1999 is not in conflict with the Constitution and the Law on Land. She pointed out that she agreed with the arguments set forth in the written explanations of the Government’s representatives Audrius Petkevičius and Gintarė Tumalavičienė and presented these additional arguments.

The aforesaid government resolution was adopted in order to implement not only the Law on Land, but also other laws regulating peculiarities of the transfer of state-owned land. The Law on Land and the Republic of Lithuania’s Law on Land Reform, which regulate the land relations, constitute a single system of legal norms. The Law on Land Reform establishes the ways of the acquisition of state-owned land as private ownership. It also points out as to which land is not subject to privatisation. Item 4 of Paragraph 5 Article 10 of the Law on Land, in consolidating that that plots of state-owned land edging between private land plots, if they do not exceed the size set by the Government, shall be sold without an auction to the owners of such private land plots, provides for the procedure for selling particular plots of land. Such plots of state-owned land may be sold under the said procure if they are not included into the list of land not subject to privatisation that is established in the Law on Land Reform. Article 13 of the latter law consolidates, among other things, that land under state and municipal roads is not subject to privatisation. The representative of the party concerned also notes that vacant edging plots of state-owned land must be formed by establishing, among other things, the possibilities of joining them with purchasers’ neighbouring plots of land under procedure established in the Law on Territorial Planning. A territory that is separated from vacant state-owned land by land not subject to privatisation does not have any common coordinates with such state-owned land. Thus, in implementing Item 4 of Paragraph 5 of Article 10 of the Law on Land and the prohibitions consolidated in the Law on Land Reform, Item 2.15 (wording of 29 November 2004) of government resolution No. 692 of 2 June 1999 quite reasonably established the impugned legal regulation, therefore, it is impossible to assert that this legal regulation is devoid of the ground consolidated in the law or that it competes with the law.

In view of the fact that the Government, in establishing the impugned legal regulation, was invoking laws, there is no ground for stating that the impugned provision is in conflict with the Constitution.

  1. By means of the Ordinance of the Prime Minister (No. 179) “On the Representation at the Constitutional Court” of 22 September 2014, Reda Skirkevičiūtė, Head of the Law Application Division of the Law and Personnel Department of the Ministry of Environment, was appointed to represent the Government, the party concerned, instead of Eglė Izokaitytė, a former representative of the Government.

The Constitutional Court

holds that:

I

  1. As mentioned before, the First Vilnius City Local Court, the petitioner, requests an investigation into whether the provision “in the cases where, according to the approved detailed plan of the territory, the formation of new plots of land is not provided (is not allowed), vacant plots of state-owned land, edging between private plots of land or (and) leased plots of state-owned land and roads (streets), which do not exceed 0.04 ha in the territories in which, according to territorial planning documents, the construction of residential houses is provided, and which do not exceed 0.5 ha in the territories in which no such construction is provided, may, upon the approval by municipal councils and a decision of the county chief, be sold without an auction to the owners of the neighbouring plots of land that are registered in the Real Property Register, if they agree to the selling price of the plots of land, or if such plots of land are leased to the lessees of neighbouring plots of state-owned land” of the first paragraph of Item 2.15 (wording of 29 November 2004) of the Government Resolution (No. 692) “On the Sale and Lease of New Plots of Different-Purpose State-Owned Land” of 2 June 1999, to the extent that it consolidates the sale, without an auction, of vacant plots of state-owned land edging between private plots of land or (and) leased plots of state-owned land and roads (streets) to the owners of the neighbouring plots of land that are registered in the Real Property Register, was not in conflict with Item 2 of Article 94 of the Constitution, the constitutional principle of a state under the rule of law, and Items 4 and 5 of Paragraph 5 Article 10 of the Law on Land (wording of 27 January 2004).
  2. It should be noted that, in the civil case considered by the First Vilnius City Local Court, in which the said court applied to the Constitutional Court, was settling a dispute over the selling of a plot of state-owned land, edging between a plot of land belonging by right of ownership to a closed-type joint-stock company and a road, to this company without an auction.

Consequently, in the constitutional justice case at issue, the compliance of the legal regulation established in the first paragraph of Item 2.15 (wording of 29 November 2004) of government resolution No. 692 of 2 June 1999 with the Constitution and the Law on Land is doubted to the extent that the said item established the selling of particular vacant plots of state-owned land edging between plots of private land and roads (streets) to owners of neighbouring plots of land without an auction.

  1. Thus, subsequent to the petition of the First Vilnius City Local Court, the petitioner, in the constitutional justice case at issue, the Constitutional Court will investigate whether the first paragraph of Item 2.15 (wording of 29 November 2004) of the Government Resolution (No. 692) “On the Sale and Lease of New Plots of Different-Purpose State-Owned Land” of 2 June 1999, to the extent that the said paragraph established the selling of particular vacant plots of state-owned land edging between plots of private land and roads (streets) to owners of neighbouring plots of land without an auction, was not in conflict with Item 2 of Article 94 of the Constitution, the constitutional principle of a state under the rule of law, and Items 4 and 5 of Article 10 of the Law on Land (wording of 27 January 2004).

II

On the compliance of the provision of the first paragraph of Item 2.15 (wording of 29 November 2004) of the Government Resolution (No. 692) “On the Sale and Lease of New Plots of Different-Purpose State-Owned Land” of 2 June 1999 with Item 2 of Article 94 of the Constitution, the constitutional principle of a state under the rule of law, and Items 4 and 5 of Article 10 of the Law on Land (wording of 27 January 2004)

  1. On 2 June 1999, the Government adopted the Resolution (No. 692) “On the Sale and Lease of New Plots of Different-Purpose State-Owned Land”. This resolution has subsequently been amended and supplemented on more than one occasion. The Government Resolution (No. 1500) “Amending the Resolution of the Government of the Republic of Lithuania (No. 692) ‘On the Sale and Lease of New Plots of Different-Purpose State-Owned Land’ of 2 June 1999” of 29 November 2004 by which, inter alia, Item 2.15 of government resolution No. 692 of 2 June 1999 was amended and set forth anew and the heading of this government resolution was amended was among the resolutions by which government resolution No. 692 of 2 June 1999 has been amended and supplemented.
  2. The first paragraph of Item 2.15 (wording of 29 November 2004) of the Government Resolution (No. 692) “On the Sale and Lease of New Plots of Different-Purpose State-Owned Land” of 2 June 1999, the compliance of the provision of which is investigated in the constitutional justice case at issue, prescribed: “[I]n the cases where, according to the approved detailed plan of the territory, the formation of new plots of land is not provided (is not allowed), vacant plots of state-owned land, edging between private plots of land or (and) leased plots of state-owned land and roads (streets), which do not exceed 0.04 ha in the territories in which, according to territorial planning documents, the construction of residential houses is provided, and which do not exceed 0.5 ha in the territories in which no such construction is provided, may, upon the approval by municipal councils and a decision of the county chief, be sold without an auction to the owners of the neighbouring plots of land that are registered in the Real Property Register, if they agree to the selling price of the plots of land, or if such plots of land are leased to the lessees of neighbouring plots of state-owned land. In situations where several owners of neighbouring plots of land or lessees of state-owned land file applications for acquiring or leasing an edging plot of state-owned land, the size of the area of the sold or leased land is established for every person that filed an application by written agreement between the parties, whilst in the absence of such an agreement, such an area will be divided in equal parts respectively. <...>”

Thus, the legal regulation established in the first paragraph of Item 2.15 (wording of 29 November 2004) of government resolution No. 692 of 2 June 1999 regulated several situations where particular plots of vacant state-owned land edging between plots of land or between plots of land and other objects are sold to the owners of neighbouring private plots of land without an auction; one of such situations is when such plots of land are edging between private plots of land and roads (streets).

  1. The first paragraph of Item 2.15 (wording of 29 November 2004) of the Government Resolution (No. 692) “On the Sale and Lease of New Plots of Different-Purpose State-Owned Land” of 2 June 1999 also prescribed: “An agreement on the sale and purchase of, or lease of state-owned land must indicate that, in order to form a single plot of land, a particular sold or leased edging plot of land must be joined with the main plot of land within six months of the conclusion of the agreement and with the funds of the purchaser of lessee of the plot of land. The joining of the edging sold or leased plot of land with the main plot of land must be provided for in the detailed plan on the basis of which the said plot of land has been formed. If the plots of land have not been joined within the established period, the state institution authorised to sell or lease plots of land under procedure established by means of legal acts must require the fulfilment of the condition of the agreement or must initiate the cancelling of the agreement on the sale and purchase of, or lease of state-owned land under procedure established by law.”

Thus, the legal regulation established in the first paragraph of Item 2.15 (wording of 29 November 2004) of government resolution No. 692 of 2 June 1999 sought, inter alia, to ensure that particular plots of vacant state-owned land edging between private plots of land and roads (streets), which have been sold to the owners of neighbouring private plots of land, should be joined with these private plots of land.

  1. It should be noted that Item 2.15 (wording of 29 November 2004) of government resolution No. 692 of 2 June 1999 has seen subsequent amendments, however, the legal regulation in the aspect impugned by the petitioner, i.e. to the extent that the said item established that particular vacant plots of state-owned land edging between plots of private land and roads (streets) may be sold to owners of neighbouring plots of land without an auction, has remained unchanged.

It should also be noted that the compliance of the legal regulation subsequently established in the said government resolution No. 692 of 2 June 1999 with the Constitution and the laws in the aspects not specified by the petitioner is not a matter of investigation in the constitutional justice case at issue.

  1. As mentioned before, in the constitutional justice case at issue, the Constitutional Court investigates the compliance of the aforesaid provision of the first paragraph of Item 2.15 (wording of 29 November 2004) of government resolution No. 692 of 2 June 1999 with, inter alia, Items 4 and 5 of Article 10 of the Law on Land (wording of 27 January 2004).
  2. On 26 April 1994, the Seimas adopted the Law on Land. This law was set forth in its new wording by means of the Republic of Lithuania’s Law Amending the Law on Land that was adopted by the Seimas on 27 January 2004.

The Law on Land (wording of 27 January 2004) regulates the relations of ownership, management and use of land as well as land use planning and administration in the Republic of Lithuania (Paragraph 1 of Article 1 of this law); by means of this law, in implementing the land use planning and administration policy, land relations are regulated in such a manner so as to create, inter alia, the conditions for satisfying the needs of society, natural and legal persons to rationally use the land (Paragraph 2 of Article 1).

  1. Item 4 of Paragraph 5 of Article 10 “Conveyance of State-owned Land” of the Law on Land (wording of 27 January 2004) prescribed:

“5. Plots of state-owned land shall be sold without an auction in the following cases: <...>

4) if they are edging between private plots of land and do not exceed the size set by the Government—to the owners of such plots of land;”.

Thus, Item 4 of Paragraph 5 Article 10 of the Republic of Lithuania’s Law on Land (wording of 27 January 2004) established that the plots of state-owned land whose size was established by the Government and which were edging between private plots of land shall be sold without an auction to the owners of such private plots of land.

  1. Item 5 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004) prescribed:

“5. Plots of state-owned land shall be sold without an auction in the following cases: <...>

5) in other instances provided for by law.”

Thus, under Item 5 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004), laws could also establish other instances of the selling of plots of state-owned land without an auction.

  1. In the context of the constitutional justice case at issue, some other provisions of the Law on Land (wording of 27 January 2004) are also relevant:

9.1. Paragraph 4 of Article 10 of the Law on Land (wording of 27 January 2004) prescribed: “Except for the instances specified in Paragraph 5 of this Article, plots of state-owned land shall be sold at an auction to the person who offers the highest price for a plot of land for sale.”

The construction of the legal regulation established in Items 4 and 5 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004) within the context of the legal regulation established in Paragraph 4 of this article makes it possible to note that, under the legal regulation established in the aforesaid provisions, plots of state-owned land are sold by auction save the exceptions provided for in this and other laws; one of such exceptions was provided for in Item 4 of Paragraph 5 Article 10 of the Law on Land, according to which, plots of state-owned land edging between private plots of land shall be sold without an auction to the owners of such private plots of land.

9.2. In the context of the case at issue, one should also mention certain provisions of the Law on Land (wording of 27 January 2004) by which the powers of the Government in the sphere of the regulation of land relations were consolidated:

– “The Government shall: 1) in the cases and according to the procedure provided by law, take decisions regarding the ownership of state-owned land, land management, use and disposal of it and other issues related to the regulation of land relations” (Paragraph 1 of Article 32);

– “The Government shall establish the procedure for selling plots of state-owned land at an auction and without an auction” (Paragraph 7 of Article 10).

Thus, the legal regulation consolidated in the cited provisions of the Law on Land (wording of 27 January 2004) granted the powers to the Government, in instances established by law, to regulate, inter alia, the relations of the disposal of land, and, inter alia, the said legal regulation commissioned the Government to establish the procedure for selling plots of state-owned land without an auction.

  1. It should be noted that, although the Law on Land (wording of 27 January 2004), as well as Article 10 thereof, has subsequently been amended and supplemented on more than one occasion, the said legal regulation has remained unchanged.
  2. In the context of the constitutional justice case at issue, one should also mention certain relevant provisions of the Law on Roads (wording of 3 October 2002):

– “‘Road’ means an engineering structure designated for the traffic of vehicles and pedestrians. The road shall consist of the earth bank, carriageway, shoulders, central reserve, road ditches, intersections, bus stops, rest areas, pedestrian and bicycle paths, road constructions, technical traffic regulation facilities, vegetation on the road lane, road weather monitoring and transport traffic record-keeping, lighting and other facilities together with the grounds on which the said facilities are erected” (Paragraph 3 of Article 2);

– “‘Street’ means a road or its section within the territory of an urban or rural residential location, usually having a name” (Paragraph 2 of Article 2);

– “‘Road lane’ means a lane of land where the road is constructed or under construction” (Paragraph 6 of Article 2).

Summarising the cited provisions of the Law on Roads (wording of 3 October 2002), it should be noted that roads (as well as streets) consist of various objects (constructions, facilities, etc.), thus, also the land that they occupy—a road lane.

  1. In the context of the constitutional justice case at issue, it should be noted that the conveyance of state-owned land to private ownership is also regulated by the Law on Land Reform (wording of 2 July 1997).

Paragraph 2 (wording of 15 July 2004) of Article 8 “The Sale of State-owned Land” of the Law on Land Reform established that land for non-agricultural uses in towns and rural areas shall be sold according to the procedure established by the Government.

  1. In the context of the constitutional justice case at issue, one should also mention the Regulations of the Real Property Cadastre of the Republic of Lithuania (wording of 23 June 2005) as approved by the Government Resolution (No. 534) “On the Approval of the Regulations of the Cadastre of the Real Property of the Republic of Lithuania” of 15 April 2002 by invoking, inter alia, the Republic of Lithuania’s Law on the Real Property Cadastre. The said regulations, inter alia, particularised the procedure for forming plots of land that is established in laws.

The same regulations provide: “The limits of a plot of land between the turning points of the limits, including the limits bound by the natural contours, must form a single closed contour <...>” (Item 21); “The areas of land divided by main, national, district, public and internal roads, streets <…>, shall be formed as separate plots of land” (Item 22).

Thus, Items 21 and 22 of the Regulations of the Real Property Cadastre (wording of 23 June 2005) consolidated the principal provision that the areas of land divided by roads (streets) are formed as separate plots of land.

  1. As mentioned before, in the constitutional justice case at issue, the Constitutional Court investigates whether the impugned provision of the government resolution was not in conflict with Item 2 of Article 94 of the Constitution, the constitutional principle of a state under the rule of law, and with the aforesaid provisions of the Law on Land.
  2. The doubts of the petitioner are based on the fact that the impugned provision of the government resolution consolidates the legal regulation that is different from the one established in the Law on Land; it is only the legislature that has the discretion to establish as to which plots of state-owned land are sold without an auction, whilst the Government is only commissioned with establishing the procedures for the acquisition of state-owned land as ownership; by means of the impugned legal regulation, the Government has created norms of a general character which compete with the norms of the law; this is not in line with Item 2 of Article 94 of the Constitution, according to which, the Government shall execute laws; this is also not in line with the principle of a state under the rule of law which gives rise to the requirement that the hierarchy of legal acts must not be violated.
  3. The Constitutional Court has held on more than one occasion that the constitutional principle of a state under the rule of law implies the hierarchy of all legal acts and does not permit that substatutory legal acts regulate the relations which can be regulated only by law, nor does it permit that substatutory legal acts establish any such legal regulation which would compete with that established in the law or that such legal regulation would not be based upon laws (the Constitutional Court’s rulings of 14 March 2006, 22 June 2009, 6 November 2013, and 11 December 2013). Substatutory legal acts may not replace the law and may not create any norms of a general character which would compete with the norms of the law, because the superiority of laws over substatutory acts, which is consolidated in the Constitution, would thus be violated (the Constitutional Court’s rulings of 21 August 2002, 13 December 2004, and 28 September 2011). Should the Government fail to observe laws, the constitutional principle of a state under the rule of law implying the hierarchy of legal acts, and Item 2 of Article 94 of the Constitution, under which the Government executes, inter alia, laws, would be negated (the Constitutional Court’s rulings of 23 May 2007, 13 August 2007, and 2 April 2013).

The Constitutional Court has also held in its acts that laws establish rules of a general character, whilst substatutory legal acts may particularise them and regulate the procedure for their implementation (the Constitutional Court’s rulings of 26 October 1995, 5 March 2004, and 9 May 2014). The duty of the Government to adopt substatutory acts that are necessary for the implementation of laws stems directly from the Constitution, while in case there is a commissioning by the legislature to do so, it also stems from laws and Seimas resolutions concerning the implementation of laws; it is important that the Government adopt substatutory legal acts without exceeding its powers and that these legal acts be not in conflict with the Constitution and laws (inter alia, the Constitutional Court’s rulings of 18 December 2001, 5 March 2004, 29 April 2009, and 24 October 2012).

  1. In the context of the constitutional justice case at issue, Item 2 of Article 94 of the Constitution should be construed in conjunction with Paragraph 2 of Article 128 thereof, which provides that the procedure for the possession, use and disposal of state property shall be established by law.

While construing this provision of the Constitution, the Constitutional Court has held that the transfer of the property, which belongs by right of ownership to the state, to ownership of other subjects must be based on the law, that laws must, inter alia, establish the state institutions that have the powers to adopt decisions concerning the transfer of the property, which belongs by right of ownership to the state, to ownership of other subjects, and the powers of these institutions to transfer the said property, as well as the conditions and procedure of the transfer of such property (the Constitutional Court’s rulings of 30 September 2003, 8 July 2005, 23 August 2005, 23 May 2007, 23 November 2007, and 2 March 2009).

The Constitutional Court has also noted that the provision “the transfer of the property, which belongs by right of ownership to the state, to ownership of other subjects must be based on the law” of the official constitutional doctrine may not be construed as meaning that, purportedly, all relations of the transfer of the property under the ownership of the state should be regulated only by means of a law—the Government as well as other subjects of the law-making according to their competence may also regulate these relations by means of substatutory legal acts which are grounded on the law and which do not compete with it (the Constitutional Court’s rulings of 23 November 2007 and 2 March 2009).

  1. Assessing the compliance of the impugned legal regulation with the Constitution, one should take into consideration the Constitutional Court’s ruling of 22 October 1996, which investigated the compliance of the Government Resolution (No. 987) “On the Selling and Lease of State Land Plots for Non-Agricultural Activities” of 17 July 1995, which had regulated the relations analogous to those regulated by the government resolution impugned in the case at issue prior to the entry into force of the latter resolution, and the compliance of the Procedure of Selling and Lease of State Land Plots for Non-Agricultural Activities approved by said government resolution No. 987 of 17 July 1995 with the Constitution and laws.

In the same ruling, the Constitutional Court ruled that Items 7.1.9 and 8.1.19 of the aforesaid procedure, which had established that the Government, by means of its individual resolution, could sell or lease state-owned land without an auction, were in conflict with the Constitution. According to the Constitutional Court, having granted such a right to itself without any grounds provided for by law, the Government had violated Article 128 of the Constitution; in addition, the right of the Government as provided for in the said items to sell or lease non-agricultural land without any prior conditions and without an auction might create preconditions for individual subjects to grant exceptional rights to acquire plots of land.

On the other hand, according to the Constitutional Court, Items 7.1.1–7.1.8, 8.1.1–8.1.18 of the Procedure of Selling and Lease of State Land Plots for Non-Agricultural Activities, which had established the instances of the selling and lease of plots of state-owned land for non-agricultural activities, were not in conflict with the Constitution and laws. The Constitutional Court’s ruling of 22 October 1996 noted that the legislature had not defined in particular as in what instances state-owned land could be sold or leased without an auction, however, the major provisions of the procedure of the selling and lease of plots of state-owned land by auction and non-auction procedure had been phrased in the Law on Land Reform, the Law on Land, and the Law on the Leasing of Land; the Government had merely specified the fundamentals of the selling and lease of plots of state-owned land for non-agricultural activities without an auction in the said items; the instances established in the said items had been essentially grounded on the norms of various laws which regulated land relations and on the actual circumstances that had determined such a (non-auction) procedure of the lease or selling of state-owned land; providing the said land plots had been sold by auction, the rights of land users and possessors would have been violated in substance.

Consequently, in its ruling of 22 October 1996, the Constitutional Court defended the position that the Government enjoys the powers to particularise, in its resolutions, the principal provisions established in laws governing the sale and lease of state-owned land by auction and without an auction, however, the legal regulation established by the Government must be based on laws and actual circumstances.

  1. While deciding whether the first paragraph of Item 2.15 (wording of 29 November 2004) of the Government Resolution (No. 692) “On the Sale and Lease of New Plots of Different-Purpose State-Owned Land” of 2 June 1999, to the extent that the said paragraph established the selling of particular vacant plots of state-owned land edging between plots of private land and roads (streets) to owners of neighbouring plots of private land without an auction, was not in conflict with Constitution and the Law on Land, it should be noted that, as mentioned before, laws establish rules of a general character, whilst substatutory legal acts may particularise them; also, the Government may, within its competence, regulate the relations of the transfer of property that belongs to the state by right of ownership to the ownership of other subjects by means of substatutory acts that are based on and do not compete with the law.
  2. As mentioned before, in the constitutional justice case at issue, the Constitutional Court investigates the compliance of the impugned provision of the government resolution with, inter alia, Item 4 of Paragraph 5 Article 10 of the Law on Land (wording of 27 January 2004).

20.1. It has been mentioned that Item 4 of Paragraph 5 Article 10 of the Law on Land (wording of 27 January 2004) provides that the plots of state-owned land whose size was established by the Government and which were edging between private plots of land shall be sold without an auction to the owners of such private plots of land.

It has also been mentioned that the legal regulation consolidated in Paragraph 7 of Article 10 and Paragraph 1 of Article 32 of the Law on Land (wording of 27 January 2004) granted the powers to the Government, in instances established by law, to regulate, inter alia, the relations of the disposal of land; inter alia, the said legal regulation commissioned the Government to establish the procedure for selling plots of state-owned land without an auction, whilst Paragraph 2 (wording of 15 July 2004) of Article 8 of the Law on Land Reform (wording of 2 July 1997) established that land for non-agricultural uses in towns and rural areas shall be sold according to the procedure established by the Government.

20.2. It has been mentioned that, by means of the Law on Land (wording of 27 January 2004), in implementing the land use planning and administration policy, land relations are regulated in such a manner so as to create, inter alia, the conditions for satisfying the needs of society, natural and legal persons to rationally use the land (Paragraph 2 of Article 1).

It should be noted that after the principal rule had been consolidated in Item 4 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004) that the areas of state-owned land edging between private plots of land are sold without an auction and that only the owners of neighbouring private plots of land may acquire such areas of state-owned land under such non-auction procedure, one made sure that only the specified subjects would be allowed to acquire those areas of state-owned land. This exception to the general rule (state land must be sold by auction) established in the law is not an end in itself. Such legal regulation implies that an area of state-owned land edging between private plots of land cannot be formed as an independent plot of land and used in a rational manner.

20.3. It has been mentioned that, under the Law on Roads (wording of 3 October 2002), roads (as well as streets) consist of various objects (constructions, facilities, etc.), thus, also the land that they occupy—a road lane.

Consequently, also such situations are possible, where particular areas of state-owned land neighbour not only upon private plots of land, but also upon the land occupied by a road (street). It should also be noted that there is no ground for stating that a situation where a particular area of state-owned land is edging only between private plots of land would differ in substance, as regards the possibilities of the formation of this area of land as an independent plot of land and of using it in a rational manner, from a situation where such an area is edging between private plots of land (a private plot of land) and a road (street).

20.4. It has been mentioned that the legal regulation established in the first paragraph of Item 2.15 (wording of 29 November 2004) of government resolution No. 692 of 2 June 1999 sought, inter alia, to ensure that particular plots of vacant state-owned land edging between private plots of land and roads (streets), which have been sold to the owners of neighbouring private plots of land, should be joined with these private plots of land.

It should be mentioned that, in the Lithuanian judicial practice, one defends the position that the legal regulation established in Item 2.15 of government resolution No. 692 2 June 1999 sought to secure the formation of a rational use of land, an effective use of the stock of available vacant state-owned land, and the raising of additional revenue to the municipal and state budgets; vacant and edging plots of land must be formed by establishing their limits, area, targeted use, and the possibilities of joining them with the neighbouring plot of land of a purchaser under procedure established by the Law on Territorial Planning (the 9 November 2011 ruling of the Supreme Court of Lithuania in civil case No. 3K-3-355/2011; the 28 January 2013 ruling of the Supreme Administrative Court of Lithuania in administrative case No. A520-471/2013).

It has also been mentioned that Items 21 and 22 of the Regulations of the Real Property Cadastre (wording of 23 June 2005), which were approved by invoking, inter alia, the Law on the Real Property Cadastre, consolidated the principal provision that the areas of land divided by roads (streets) are formed as separate plots of land.

  1. It should be noted that, in implementing the powers granted to it by law in the sphere of the regulation of land relations, the Government, by means of the impugned legal regulation established in the first paragraph of Item 2.15 (wording of 29 November 2004) of resolution No. 692 of 2 June 1999, by which particular areas (or parts thereof) of vacant state-owned land edging between private plots of land and roads (streets) could be sold to owners of such neighbouring private plots of land without an auction, particularised the legal regulation consolidated in Item 4 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004).

It needs to be emphasised that, in establishing the legal regulation particularising Item 4 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004), the Government was bound by the rules of a general character and their purposes that had been established in this and other provisions of the said law.

It should also be noted that there is no sufficient ground for stating that the impugned legal regulation established by first paragraph of Item 2.15 (wording of 29 November 2004) of government resolution No. 692 of 2 June 1999 placed limitations on the opportunities of the persons (owners of neighbouring private plots of land) to acquire particular areas of state-owned land without an auction, and there is also no ground for stating that such areas of state-owned land edging between private plots of land and roads (streets), in view of actual circumstances, should be sold by auction.

Thus, there exist no legal arguments for stating that the impugned legal regulation established by the Government denied the principal rule consolidated in Item 4 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004) that the areas of state-owned land edging between private plots of land are sold without an auction and that only the owners of neighbouring private plots of land may acquire such areas of state-owned land under such non-auction procedure.

It should be held that the impugned legal regulation established by the Government did not violate Item 4 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004).

  1. In this context, it should also be noted that the issues of the application of the impugned legal regulation established by the Government, as, for instance: whether a concrete object is a road (street), or which private plots of land (also in cases where they contain internal roads belonging by right of ownership to the state or a particular municipality) should be regarded as neighbouring upon edging plots of state-owned land, or what opportunities there exist regarding the joining of such plots, etc., are within the competence of the courts settling concrete disputes and within the competence of other institutions applying law.
  2. It has been mentioned that, under Item 5 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004), laws could also establish other instances of the selling of plots of state-owned land without an auction.

Having held that the Government, by means of the impugned legal regulation established in the first paragraph of Item 2.15 (wording of 29 November 2004) of resolution No. 692 of 2 June 1999, by which particular areas (or parts thereof) of vacant state-owned land edging between private plots of land and roads (streets) could be sold to owners of such neighbouring private plots of land without an auction, particularised the legal regulation consolidated in Item 4 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004), there is no ground for stating that, by means of this legal regulation, the substatutory legal act established an independent instance of the selling of state-owned land without an auction.

Thus, the impugned legal regulation established by the Government did not violate Item 5 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004).

  1. After it has been held in this ruling that, by means of the impugned legal regulation established in the first paragraph of Item 2.15 (wording of 29 November 2004) of resolution No. 692 of 2 June 1999, the Government particularised the legal regulation consolidated in Item 4 of Paragraph 5 of Article 10 of the Law on Land (wording of 27 January 2004), and that there is no ground for stating that this legal regulation denied the principal rule consolidated in the said provision of the law, it should also be held that the impugned legal regulation was based on the law and did not compete with it. Therefore, there is no ground for stating that this legal regulation violated the constitutional principle of a state under the rule of law that implies, inter alia, the hierarchy of legal acts, nor did it violate Item 2 of Article 94 of the Constitution by which the Government executes, inter alia, laws.
  2. In the light of the foregoing arguments, the conclusion should be drawn that the first paragraph of Item 2.15 (wording of 29 November 2004) of the Government Resolution (No. 692) “On the Sale and Lease of New Plots of Different-Purpose State-Owned Land” of 2 June 1999, to the extent that the said paragraph established the selling of particular vacant plots of state-owned land edging between plots of private land and roads (streets) to owners of neighbouring plots of land without an auction, was not in conflict with Item 2 of Article 94 of the Constitution, the constitutional principle of a state under the rule of law, and Items 4 and 5 of Article 10 of the Law on Land (wording of 27 January 2004).

Conforming to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Articles 1, 53, 531, 54, 55, and 56 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

To recognise that Item 2.15 (wording of 29 November 2004; Official Gazette Valstybės žinios, 2004, No. 173-6398) of the Resolution of the Government of the Republic of Lithuania (No. 692) “On the Sale and Lease of New Plots of Different-Purpose State-Owned Land” of 2 June 1999, to the extent that the said paragraph established the selling of particular vacant plots of state-owned land edging between plots of private land and roads (streets) to owners of neighbouring plots of land without an auction, was not in conflict with Item 2 of Article 94 of the Constitution of the Republic of Lithuania and Items 4 and 5 of Article 10 of the Republic of Lithuania’s Law on Land (wording of 27 January 2004; Official Gazette Valstybės žinios, 2004, No. 28-868).

 

This ruling of the Constitutional Court is final and not subject to appeal.

Justices of the Constitutional Court:                                        Elvyra Baltutytė

                                                                                                           Vytautas Greičius

                                                                                                           Danutė Jočienė

                                                                                                           Vytas Milius

                                                                                                           Egidijus Šileikis

                                                                                                           Algirdas Taminskas

                                                                                                           Dainius Žalimas