Titulinė skaidrė
Teismo sudėtis
Salė
Vytis
Lt
Lt

News

Content updated: 16-07-2020 14:36

The legal regulation laid down by the Government under which a certain group of persons is paid lower one-off compensation for losses incurred as a result of easements established by law for the benefit of electricity network operators is in conflict with the Constitution and the law

08-07-2020

By its ruling adopted today, the Constitutional Court declared unconstitutional Item 16 of the Methodology for Determining the Maximum One-Off Compensation for the Use of a Land Easement Established by Law or by Contract for the Benefit of Network Operators (hereinafter referred to as the Methodology), as approved by the government resolution (No 725) of 25 July 2018, as well as Items 16 and 32 of the Methodology as set out in its new wording of 22 January 2020, insofar as, under the said items, the significantly lower maximum one-off compensation for the use of an easement established by law over land or other immovable objects for the benefit of transmission system and distribution network operators (hereinafter referred to as network operators) is paid to persons who, before 10 July 2004, had acquired the rights of ownership, respectively, to land or other immovable objects by the time when electricity networks were constructed and/or other electricity installations were built there, compared to persons who are paid the maximum one-off compensation for the use of an easement established by contract for the benefit of network operators. In addition, the Methodology has been found in conflict with the provisions of the Law Amending the Law on Electricity, insofar as it did not and does not provide for the procedure for calculating and paying one-off compensation for the use of land easements established by law for the benefit of network operators in cases where it is payable for losses incurred due to destroyed plantations or crops or deforestation.

The compliance of Item 16 of the Methodology with the Constitution was called into question by the Vilnius City District Court, the petitioner. The Vilnius City District Court applied to the Constitutional Court for an assessment whether the legal regulation laid down in Item 16 of the Methodology, which provides for a significantly lower amount of compensation for the use of land easements established by law for the benefit of network operators, does not discriminate against those persons over whose land an easement for the benefit of network operators is established by law, compared to persons over whose land an easement for the benefit of network operators is established by contract, as well as whether the said legal regulation does not violate the rights of ownership of those persons over whose land an easement is established by law.

The Constitutional Court recalled that the right of ownership, protected under the provisions of Article 23 of the Constitution, is not absolute and may be limited by law, among other things, due to a constitutionally justifiable need necessary for society in cases where, without limiting this right, the protection of the values consolidated in the Constitution would not be possible and the public interest would be prejudiced; when limiting the right of ownership, the legislature is bound by, among others, the constitutional principle of the equality of persons, enshrined in Article 29 of the Constitution.

The Constitutional Court also held that, in accordance with Paragraph 3 of Article 46 of the Constitution, regulating economic activity in the field of energy so that it serves the general welfare of the people and seeking to achieve the constitutionally important objective of ensuring the security and reliability of the energy system, the state may impose, by means of a law, limitations on the right of ownership, which is consolidated under Article 23 of the Constitution, in cases where such limitations are necessary for the installation and operation of the energy infrastructure to provide a service in the public interest: secure and reliable supply of electricity to all consumers. Under the Constitution, among other things, the constitutional imperative of social harmony and the constitutional principles of justice, reasonableness, and proportionality, when establishing such a legal regulation, the legislature must ensure a balance between the constitutionally defended and protected rights and interests of the owners of land and other immovable objects, on the one hand, and the rights and interests of electricity consumers, on the other. Therefore, having regard to the imperative of ensuring the effective protection of consumer rights, which stems from the Constitution, among others, Paragraph 5 of Article 46 thereof, and implies imposing limits on electricity prices as one of the means of protecting the interests of electricity consumers, the legislature may provide for the maximum amount of compensation for losses resulting from limitations on the right of ownership in cases where such limitations are necessary for the installation and operation of the energy infrastructure.

The impugned and related legal regulation

The Constitutional Court held that the Law on Electricity, adopted by the Seimas on 1 July 2004, laid down two different bases for establishing easements over land and other immovable objects that do not belong to electricity network operators (limitations on the use of land and other immovable objects that belong to other persons): easements over land and other immovable objects for the purposes of the operation, servicing, repair, and use of electricity networks and other electricity objects installed before the date of the entry into force of the law (10 July 2004) were established by law, while easements over land and other immovable objects for the purposes of the construction of new electricity networks and the building of other electricity objects (i.e. those constructed and built on 10 July 2004 and later) are established by contract between the electricity network operators and the owner of the land or other immovable objects.

The Constitutional Court also held that, under the provisions of the Law on Electricity, easements over land and other immovable objects for the use of the electricity networks and/or other installations that had been in place before 10 July 2004 were established by law with respect to two groups of persons: (1) persons who acquired the rights of ownership to land or other immovable objects (including by restoring their rights of ownership to land or other immovable objects actually owned by the state) after electricity networks had been constructed and/or other installations had been built there; thus, they acquired the rights of ownership with the respective limitations on the use of the land or other immovable objects, which had been imposed before these persons acquired the rights of ownership to the land or other immovable objects; (2) persons who had acquired the rights of ownership to land or other immovable objects (including by restoring their rights of ownership to land or other immovable objects actually owned by the state) before electricity networks were constructed and/or other installations were built there; thus, they acquired the rights of ownership without the respective limitations on the use of the land or other immovable objects.

Under the provisions of the Law on Electricity (wording of 4 July 2017) and the Law Amending the Law on Electricity, the Government was assigned to lay down a procedure for calculating and paying one-off compensation for the use of easements established for the benefit of network operators by law or by contract. In order to implement this assignment laid down by the legislature, the Government approved the Methodology, whose provisions in terms of their constitutionality were investigated in this constitutional justice case.

The Constitutional Court noted that the maximum one-off compensation calculated according to the impugned Item 16 of the Methodology is paid to the following two groups of persons over whose land an easement is established by law: (1) persons who, before 10 July 2004, acquired the rights of ownership to land with the respective limitations on the use of the land, which had been imposed before these persons acquired the rights of ownership to the land; (2) persons who, before 10 July 2004, acquired the rights of ownership to land without the respective limitations on the use of the land.

The compensation paid to these persons is calculated according to Item 16 of the Methodology and it is equal to one tenth of the indicated market value of the given part of the land plot that is subject to an easement; while persons over whose land an easement is established by contract are paid a different, higher amount of compensation, calculated according to Item 25 of the Methodology: these persons are paid the maximum one-off compensation equal to half of the indicated market value of the given part of the land plot, or the total indicated market value of such a part of land, depending on whether the use of the given part of the land plot according to its main purpose of land use is partially or totally precluded.

The assessment of the compliance of the provisions of the Methodology with the Constitution and the Law Amending the Law on Electricity

It should be noted that, in general, the maximum amount of one-off compensation for the use of an easement established by law or by contract for the benefit of electricity network operators may be constitutionally justified as a measure aimed at ensuring a balance between the rights and interests of the owners of land and other immovable objects and the rights and interests of electricity consumers. Where such an amount is established, account must be taken of the impact of one-off compensation on the price of electricity; thus, the imperative of ensuring the effective protection of consumer rights, which stems from Paragraph 5 of Article 46 of the Constitution and implies imposing limits on electricity prices as one of the means of protecting the interests of electricity consumers, must be followed. However, where the maximum amount of the said compensation is determined, the constitutional principle of the equality of the rights of persons must also be observed.

Assessing the constitutionality of the impugned Item 16 of the Methodology, the Constitutional Court held that, under the Methodology, persons over whose land an easement is established by law and who acquired the right of ownership to that land with the respective already existing limitations on its use and persons over whose land an easement is established by contract are in a fundamentally different legal situation: for persons over whose land an easement is established by law and who acquired the rights of ownership to that land already after electricity networks had been constructed and/or other installations had been built there, the possibility of using the acquired property and the value of this property, due to the electricity networks and other installations located there, did not change; whereas, for persons over whose land an easement is established by contract, the value of the land and the possibility of using the acquired property, due to the construction of new electricity networks and/or the building of other installations on the land belonging to them, was subject to change after the acquisition of the rights of ownership to that land, because limitations were imposed on its use, which had not existed at the time of the acquisition of the land. Accordingly, under the Constitution, the differentiated legal regulation, laid down in the Methodology, could be applied with respect to the said groups of persons and different maximum one-off compensation could be calculated and paid to them. Therefore, the said legal regulation, laid down in Item 16 of the Methodology, under which, compared to the maximum one-off compensation paid for an easement established by contract, lower maximum one-off compensation is paid for a land easement established by law to persons who acquired the rights of ownership to that land after electricity networks had been constructed and/or other installations had been built there, was held to be constitutionally justified and it was stated that it does not violate the requirements, arising from the Constitution, among others, Articles 23 and 29 thereof, to limit the right of ownership by law on the grounds of a constitutionally justifiable need necessary for society and to respect the constitutional principle of the equality of the rights of persons.

In a different way, however, the Constitutional Court assessed the legal regulation laid down in the impugned Item 16 of the Methodology insofar as, under this legal regulation, the maximum one-off compensation for the use of an easement established by law for the benefit of network operators, which is equal to one tenth of the indicated market value of the given part of the land plot, is calculated and paid to persons who, before 10 July 2004, acquired the rights of ownership to land without the respective limitations on the use of that land. With respect to these persons, limitations on the use of land that belongs to them were imposed after they had acquired the rights of ownership to that land. Therefore, the legal situation of these persons and the legal situation of those persons on whose land new electricity networks were constructed and/or other installations were built on 10 July 2004 and later and an easement is established by contract, and who are paid compensation equal to half of the indicated market value of the given part of the land plot, or the total indicated market value of such a part of land, lead to no such differences that would justify the differentiated legal regulation as laid down in the Methodology and applied with respect to these groups of persons in terms of calculating and paying the maximum one-off compensation. The legal situation of persons in these groups is equivalent from the aspect that the use of the land owned by them had not been limited until electricity networks were constructed or other energy installations were built, irrespective of whether electricity networks were constructed and/or other installations were built before or after 10 July 2004.

Thus, under the Constitution, among others, Articles 23 and 29 thereof, both above-mentioned groups of persons on whose land electricity networks were constructed and/or other installations were built after they had acquired the rights of ownership to that land must be compensated in the same way for losses resulting from limitations on the right of ownership due to land easements established for the benefit of network operators, which means that the said groups of persons should have been paid the same amount of compensation. This means that, by the legal regulation laid down in Item 16 of the Methodology, insofar as, under this legal regulation, the significantly lower maximum one-off compensation for the use of a land easement established by law for the benefit of electricity network operators is paid to persons who, before 10 July 2004, had acquired the rights of ownership to land or other immovable objects by the time when electricity networks were constructed and/or other energy installations were built there, no regard is paid to the requirement, arising from Articles 23 and 29 of the Constitution, to respect the constitutional principle of the equality of the rights of persons when limitations on the right of ownership are imposed by means of a law.

As the legal regulation impugned by the petitioner remained unchanged in the Methodology set out in its new wording of 22 January 2020, the Constitutional Court also declared Item 16 of the Methodology that is currently in force to be in conflict with the same provisions of the Constitution.

In addition, the Constitutional Court noted that, if it finds the unconstitutionality of provisions that are not impugned by a petitioner but are consolidated in the same legal act whose other provisions are impugned by the petitioner in terms of their constitutionality (including provisions of a legal act amending the said legal act), the Constitutional Court must state that the provisions not impugned by the petitioner have been found to be unconstitutional.

The Constitutional Court found that the provisions of Items 32 and 35 of the Methodology (wording of 22 January 2020) provide for an analogous legal regulation governing the payment of one-off compensation for the use of easements established by law or by contract over immovable objects. Therefore, on the basis of the same arguments, the Constitutional Court ruled Item 32 of the Methodology (wording of 22 January 2020) to be in conflict with Articles 23 and 29 of the Constitution, insofar as, under this item, the maximum one-off compensation for the use of an easement established by law over other immovable objects for the benefit of network operators is calculated and paid to persons who, before 10 July 2004, had acquired the rights of ownership to the immovable objects by the time when electricity objects and/or installations were built there.

The petitioner impugned not only the legal regulation contained in the Methodology, as approved by the government resolution, but also the fact that it does not establish what, in the opinion of the petitioner, should be established, i.e. the petitioner raised the question of legislative omission (a legal gap, prohibited by the Constitution). In the opinion of the petitioner, the Methodology must provide that one-off compensation for the use of land easements established by law must also be paid in cases where persons over whose land an easement is established by law incur losses not only as a result of the lost possibility of using the land according to its purpose because an easement is exercised over it, but also where losses are incurred as a result of deforestation due to an established easement, since such compensation, under the Methodology, is paid to persons over whose land an easement is established by contract.

As mentioned before, when approving the Methodology by its resolution of 25 July 2018, the Government followed the provisions of the Law on Electricity and the Law Amending the Law on Electricity, under which the Government was assigned to lay down a procedure for calculating and paying one-off compensation for losses resulting from easements established by law or by contract. Under the law, one-off compensation paid to both groups of persons could consist of four parts: for losses resulting from destroyed plantations, the destruction of crops, deforestation, and losses resulting from the lost possibility of using the land plot or immovable object (or part thereof) according to its purpose. However, under Item 15 of the Methodology, one type of one-off compensation could be paid for a land easement established by law – for losses resulting from the lost possibility of using the land plot (or part thereof) according to the main purpose of land use, which is calculated in accordance with the legal regulation laid down in Item 16 of the Methodology; however, the Methodology did not provide for any specific legal regulation for calculating one-off compensation for the use of an easement established by law to pay for other losses, including destroyed plantations or crops or deforestation.

The Constitutional Court held that, after it was provided in Paragraph 4 of Article 29 of the Law Amending the Law on Electricity that persons on whose land an easement is established by law have the right to receive one-off compensation for losses resulting from destroyed plantations or crops or deforestation due to the established easement, which is to be calculated in accordance with the procedure, approved by the Government, for calculating and paying such compensation, but no procedure for calculating and paying the said compensation was provided for in the Methodology, the actual implementation of the above-mentioned right was not ensured. Thus, although the Government approved the Methodology, it did not fulfil the assignment given to it by the legislature under Paragraph 4 of Article 29 of the Law Amending the Law on Electricity to approve the procedure for calculating and paying one-off compensation for the use of an easement established by law for the benefit of network operators in cases where it is payable for losses incurred due to destroyed plantations or crops or deforestation; consequently, the Government failed to comply with the above-mentioned provisions of Paragraph 4 of Article 29 of the Law Amending the Law on Electricity. Nor did the Government provide for such a procedure for calculating and paying the compensation in question in the Methodology as set out in its wording of 22 January 2020.

In view of this, the Constitutional Court drew the conclusion that the Methodology (both in its wording currently in force and in its wording previously in force), insofar as it does not provide for the procedure for calculating and paying one-off compensation for the use of land easements established by law for the benefit of network operators in cases where it is payable for losses incurred due to destroyed plantations or crops or deforestation, is in conflict with Paragraph 4 of Article 29 of the Law Amending the Law on Electricity.

In this context, the Constitutional Court noted that, as it has been held, the elimination of legal gaps (without excluding a legislative omission) is a matter within the competence of the respective law-making entity. However, legal gaps in the legislation can be filled ad hoc, when courts, within their competence, decide cases concerning individual social relationships and apply (as well as interpret) law, including by making use of legal analogy and by applying the general legal principles, as well as higher-ranking legal acts and, first of all, the Constitution. Accordingly, until the Government provides for the procedure for calculating and paying one-off compensation for the use of land easements established by law for the benefit of network operators in cases where it is payable for losses incurred due to destroyed plantations or crops or deforestation, the right of persons to receive such compensation may be implemented by applying to a court in accordance with the procedure laid down by law.

The material examined by the Constitutional Court in this case shows that, according to the data provided by the Ministry of Energy, electricity networks installed between 11 March 1990 and 10 July 2004, cover 11.07 per cent of easements established by law for the use of electricity networks, while other electricity installations constructed between 11 March 1990 and 10 July 2004 cover 29.29 per cent of easements established by law for the use of other installations. No data was provided as to what part of these electricity networks and installations was installed after other persons had acquired the ownership of the respective land plots or other immovable objects.

The full text of this ruling of the Constitutional Court is available on the website of the Constitutional Court at https://www.lrkt.lt/lt/teismo-aktai/paieska/135/ta2173/content.