FOURTH SECTION
Application no. 30633/11
Lay Lay Company Limited,
against Malta
lodged on 16 May 2011
STATEMENT OF FACTS
The applicant, Lay Lay Company Limited, is a company registered in Malta on 7 June 1979. It has its registered address in Fgura. It is represented before the Court by Prof I. Refalo and Dr J. Borg, lawyers practising in Valletta.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
1. The background of the case
In July 1984 A. on behalf of the applicant company had purchased together with a third party C. approximately 4,500 sq.m of developable land in Xaghra. In August 1984 C. lodged an application with the Works Department (to be examined by the Planning Area Permits Board (“PAPB”)) for permission to develop the land into several garages and overlying floors (mezzanini). On 6 September 1985 the applicant company purchased C.’s share and became the sole owner of the land.
In a meeting of 10 July 1986 the PAPB approved the application to develop the land as per plans submitted subject to the payment of road contribution costs. The minute in this respect read as follows: “There would be no objection to the erection of garages for private cars with overlying dwellings subject to conditions on Form TH and as per plans submitted”. The applicant explained that, generally, once the PAPB approved an application, notification would be made to the contribution section of the Works Department that would issue the bill and send the relevant file to the cash office to await payment. Upon payment, a receipt would be issued which was to be presented to the contribution section which in turn would notify the PAPB that the bill has been paid (clearance). The PAPB would then issue the relevant permit containing the conditions for development.
On 5 May 1987 the bill for road contribution costs was sent to C. On 15 June 1987 a final notice in respect of that bill was sent to C. A minute registered in the file dated 30 June 1987 stated that “permit has not been issued as applicant failed to pay contribution bill and (...) works are in hand”. The bill having remained unpaid, in July 1987 C. was sent a warning and the same letter informed him that the construction undertaken was not covered by a permit.
On 14 July 1987 the applicant company requested its architect to verify matters in relation to the permit with the PAPB. Queries by the architect, including a request for a copy of the relevant contribution bill, remained unanswered as the file concerning the application had been transferred to the Attorney General’s office in connection with other proceedings.
In May 1992 the Director of the Public Works Department sent C. a reminder regarding the outstanding bill, giving C. twenty-four hours to pay up. Later that month, the Director of the Public Works Department requested C. to make payment by means of a judicial letter.
On 26 August 1992 a fresh bill was issued to enable the issuance of the relevant permit. The bill was again sent to C. who had applied for the relevant permit. On an unspecified date C. passed the bill on to A. as the representative of the applicant company, who paid it on 14 December 1992. The contribution department issued its clearance in respect of the application.
Subsequently the applicant company started developing the land.
In 1993 the PAPB ceased to exist and the Malta Environment and Planning Authority (“MEPA”) was set up. Its Development Control Commission (“DCC”) was entrusted with the issuing of permits.
It appears from the minutes dated 18 March 1993 (in the file related to the permit application) that following payment MEPA was reluctant to issue the permit since it had not been approved during the ex-PAPB’s chairman’s office. Subsequently the file was transferred from one person to another without any action being taken until 17 September 1993 after which the file was misplaced.
On 4 August 1995 the applicant company, through its architect, contacted the authority in relation to the permit. The architect received a reply requesting him to submit a copy of the site plan indicating the site in question as the application could not be traced. The document requested was supplied. However, no further action was taken.
On 16 May 1996 the applicant company, through its newly appointed architect, requested the DCC to issue the relevant permit. Following the instructions received, another letter was sent by the architect to the Planning Directorate for the attention of G.C. namely, the manager within the Development Control Unit (“DCU”). By a letter of October 1996 G.C. informed the applicant’s architect that the permit could not be issued because at the time of the payment in 1992, the bill of 1986 had fallen through. The letter further stated that “the clearance referred to (in your letter) was subsequent to a clear decision not to accept payment six years after the billing”.
Between 1996 and 1999 various meetings took place between the applicant company and MEPA. However, the latter did not indicate whether or not it would give the applicant company the relevant permit. Following the authorities’ failure to respond to a letter of 17 February 1999, on 15 June 1999 the applicant company filed a judicial protest (see below).
2. Criminal proceedings
In the meantime in August 1987 the Public Works Department had requested the Commissioner of Police to take proceedings against the applicant company for illegal construction. Criminal proceedings started in April 1988 but were suspended in November 1998 without judgment, to enable the MEPA to start enforcement.
3. Ordinary proceedings
On 15 June 1999 the applicant company lodged a judicial protest against the MEPA requesting it to issue the relevant permit and holding it responsible for damages resulting from the delay in issuing it.
On the same day MEPA issued a stop notice in relation to the development of the said land.
On 5 July 1999 the applicant company appealed the stop notice before the Development Appeals Board. By a judgment of 20 August 2003 the Appeals Board rejected the appeal. It considered that no permit had ever been issued by the PAPB secretary and that the recommendation of the PAPB together with approval from the Sanitary Engineering Officer and the Aesthetics Board did not qualify as a permit to build. The issuance of the contribution bill before the issuance of the permit was simply an administrative practice and the payment of that bill could not be equated to an approval or the issuance of a permit. The Development Appeals Board therefore concluded that the development to which the stop notice applied was not covered by a permit as the application submitted had been refused. No proof had been submitted that some other permit had been issued or that the applicant company had tried to ratify that position.
On 3 September 2003 the applicant company appealed to the Court of Appeal which rejected the appeal on 24 June 2004 noting that the appeal grounds had not been on points of law.
During the appeal proceedings it transpired that MEPA was considering the letter sent by G.C. in October 1996 as a refusal to issue the permit, which had by then become final since the time-limit of thirty days from a decision to lodge an appeal had lapsed.
4. Constitutional redress proceedings
On 23 September 2004 the applicant company instituted constitutional redress proceedings. It complained that the authorities’ failure to issue the relevant permit, the subsequent stop notice and the method by which the permit was rejected, namely without a proper decision which also denied it a right to contest that decision, violated its rights under Article 6 (access to court and length) and Article 1 of Protocol No. 1 to the Convention.
By a judgment of 29 September 2009 the Civil Court acting within its constitutional competence rejected a plea of non-exhaustion of ordinary remedies and took cognisance of the case on the merits. It noted that MEPA’s objection in this respect had not mentioned which remedies the applicant company had failed to exhaust. Indeed it appeared that the applicant company had availed itself of the remedies made available by MEPA even though it had not considered the letter of 7 October 1996 as an official refusal. It had, moreover, taken judicial proceeding to challenge the stop notice issued against it. Thus, any other unmentioned proceedings which might have been available, were not adequate remedies for the purposes of the applicant company’s complaints which therefore deserved to be examined by the tribunals of constitutional competence.
As to Article 1 of Protocol No. 1, it considered that the applicant company only possessed the land it was developing, but could not claim to possess any permit to develop it. The applicant company was aware that it was building without a permit and it had failed to request a rectification of that position. It considered that the State had the power to disallow the building of property without a permit in order to ensure that developments conformed to planning regulations which were in the public interest. Thus, it considered that a decision to demolish a building without a permit was a proportionate remedial action. Moreover, it held that the payment of the relevant bill did not entail the automatic issuance of the permit - indeed more recently a part of that payment was required on lodging a planning application.
As to Article 6, it considered that the State had an obligation to provide access to courts to contest an administrative decision concerning civil rights and obligations. Nevertheless, the court considered that, in the applicant’s case, the lack of a decision on whether or not a permit was granted did not deny it access to a court, since, even before the letter of 1996 was sent, the applicant company could have brought proceedings before the ordinary tribunal contesting MEPA’s behaviour. This was even more so after the letter of June 1996, particularly because the applicant company complained that the authority issuing that letter did not have the competence to do so. It followed that the applicant company could not blame the authorities as it was the applicant company who had failed to take up such a remedy, which satisfied Article 6 requirements. As to the applicant’s complaint that MEPA had taken an unreasonable length of time to issue a decision on the application, the court considered that MEPA was not a tribunal for the purposes of the Convention. It followed that no violation could ensue.
By a judgment of 25 February 2011 the Constitutional Court upheld the first-instance judgment. It reiterated that the applicant company had not been issued with a permit and therefore it could not claim to have a possession. Referring to the Appeal Board’s finding of 20 August 2003 it was of the view that the permit had been refused because development works had been carried out before the permit was issued and the contribution bill had not been paid. The PAPB’s decision had only been a recommendation which, moreover, required the Minister’s further approval. Thus, payment of the road contribution did not oblige MEPA to issue the permit, particularly given the delay in payment. Therefore, the applicant had no legitimate expectation of ever being granted a permit.
Viewed from a different perspective, however, the court considered that the applicant company owned the said land, and thus both the process of applying for a permit and the failure to issue the permit had been an interference with its property rights constituting a control of use of such property. The requirement to apply for a permit was a measure in accordance with the law and in the public interest, having the legitimate aim of ensuring rational development while safeguarding the environment in the country. Thus, the measure was undoubtedly proportionate. Similarly, the failure to issue the permit for the reasons mentioned above had also been in the public interest and pursued legitimate aims such as respect for the rule of law. The same applied in respect of the stop and enforcement notice issued by the authority.
As to Article 6 which was applicable to the present case, it considered that the DCU manager’s letter had been sent by using the authorities’ letterhead and on behalf of the authority to the applicant’s architect who made no attempt to appeal such decision (under Article 37 of the Development Planning Act); nor had any other judicial proceedings been instituted. In its view such letter undoubtedly contained elements allowing the applicant company to bring an appeal, such as the fact that the refusal was being made because of the lack of payment of the relevant bill. Moreover, since the applicant company complained that the letter had been sent in abuse of the powers conferred to G.C., it could have also instituted proceedings for judicial review. Nevertheless, it remained passive and inert.
During these proceedings the Constitutional Court rejected on 15 March 2007 the applicant’s request to submit further evidence to substantiate a discrimination complaint, since the appeal application had not made reference to any such complaint.
5. Other relevant facts
In the meantime, in 2006 MEPA approved the South Malta Local Plan, according to which the applicant company’s property fell outside the development zone. The applicant company submitted, supported by documentation, that the area was surrounded by developments approved by the successive authorities which fell outside the new development zone.
The sum paid by the applicant company in contribution costs (approximately 7,970 euros) has not been refunded by the authorities.
B. Relevant domestic law
Section 15 of the Third Schedule of the Development Planning Act, Chapter 356 of the Laws of Malta, in so far as relevant, reads as follows:
“(1) Any person who feels aggrieved by a decision of the Authority as provided in article 15(1)(a) of this Act, may appeal to the Planning Appeals Board within thirty days from the date the decision is communicated to the person on whose application the decision was taken.
(...)
(8) If the appellant or the Authority are dissatisfied with any point of law decided by the Board, they may appeal to the Court of Appeal (Inferior Jurisdiction) by an application filed as provided in article 15(10).”
Section 15 (1) (a) of the Development Planning Act, reads as follows:
“... the Appeals Board shall have jurisdiction to:
(a) hear and determine all appeals made by a person aggrieved, other than an interested third party, by any decision of the Authority on any matter of development control, including the enforcement of such control;”
COMPLAINTS
The applicant company complained under Article 1 of Protocol No. 1 to the Convention about the authorities’ omission to issue a valid building permit in respect of its application. Invoking Article 6 § 1 it complained that as a result of the authorities unconventional and protracted procedures in refusing the application it was denied the right of access to court to contest the failure to issue it a permit. Lastly, the applicant company complained that it was being discriminated against in violation of Article 14 since surrounding and adjacent property had benefited from development permits. The applicant company considered that it had been denied an effective remedy under Article 13 of the Convention.
QUESTIONS TO THE PARTIES
1. Was the interference with the applicant company’s peaceful enjoyment of possessions namely, the refusal to issue the relevant permit, in accordance with the conditions provided for by law within the meaning of Article 1 of Protocol No. 1? The Government are requested to state the legal basis for the interference and submit the relevant legal text.
2. If so, was that interference necessary to control the use of property in accordance with the general interest? In particular, did that interference impose an excessive individual burden on the applicant?
3. In the determination of its civil rights and obligations did the applicant company have a fair hearing within a reasonable time before an independent and impartial tribunal in accordance with Article 6 § 1 of the Convention?
In particular, did the letter of October 1996 of the manager of the Development Control Unit amount to a decision for the purposes of Article 15 (1) of the Third Schedule of the Act?
Did the quality of that decision, or alternatively the failure of the authority to issue a proper decision, undermine the very essence of the applicant’s right to a court?
The Government are requested to submit details in relation to the legislation applicable at the relevant time in relation to the decision-making process.
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