Nullifying a fine which breaches natural justice

In the case “l-Avukat Malcolm Mifsud u l-Avukat Cedric Mifsud vs il-Bord ta’ Sorveljanza Dwar Sanzjonijiet” before the Judge Hon. Audrey Demicoli, the Court declared a fine issued by the Sanctions Monitoring Board on the plaintiffs to be null and invalid.

The case challenged the legal validity of a fine issued by the Sanctions Monitoring Board, on the basis of judicial review of an administrative decision in terms of the subarticles of Article 469A of Chapter 12, the Code of Organisation and Civil Procedure. The Board is an intergovernmental entity whose chairman is appointed by the Minister for Foreign Affairs.

The Court first determined two preliminary exceptions which were raised by the defendants, the Board’s legal representatives. Firstly, that the action could not subsist in virtue of the fact that the plaintiffs had paid the fine merits of the case and as such according to the defendants they accepted the fine imposed so there is nothing to review. A second preliminary plea claimed that this particular Board does not fall under the definition of a ‘public authority’ as outlined in terms of the said Article 469A.

In a preliminary ruling the Civil Court found that the plaintiffs had in fact paid the fine under protest and therefore by no stretch of the imagination could the payment of the fine be construed as an acceptance of such fine. The Court in its preliminary ruling noted that the fine had only been settled once the plaintiffs were informed that, should they not pay, the Board would impose a daily cumulative sanction.

Secondly, the Court noted that the fine was paid at the last minute and thirdly that the plaintiffs had expressly stated in writing that they were not in agreement with the fine and that they would be contesting it, such wording sufficed in the eyes of the Court, notwithstanding the fact that the words ‘under protest’ were not stated. In addition, the Court took note that in view that there is no appeal procedure which could suspend the imposition of the fine, therefore the only means to ensure that the fine would not keep spiralling, even if to a limited amount, was to pay it and subsequently contest it by means of a judicial review case.

As to the plea that the Sanctions Monitoring Board did not constitute a public authority, the Court in its preliminary ruling stated that while the definition of ‘public authority’ found in Article 469A includes a specific definition of a Board, it is to be pointed out that the wording used is ‘includes’ and therefore this indicates that the intention of the legislator was not to have just one type of Board falling under the definition, but many others. The Court then went into a detailed analysis of the functions of the Board and found that it is in fact a ‘public authority’.

In its final judgment the Court pointed out that in a judicial review of an administrative act case, it will not look into the merits of the administrative decision, but will instead assess whether the decision was taken beyond the legal powers of the public authority in terms of Article 469A (1). As to the first grounds by the plaintiffs that the decision taken breached the fundamental constitutional right to a fair hearing the Court found that as an ordinary Court (as opposed to a Constitutional Court) it could not review such act on the basis of a breach of a constitutional right.

The Court then examined the decision to fine Mifsud & Mifsud Advocates on the basis of Article 469A (b) (ii) which is the legal basis to challenge an administrative act which fails to respect the principles of natural justice or is committed without being in line with the mandatory procedural steps leading up to such decision. The facts of this case saw the defendant Board dishing out a fine without first making contact and notifying the plaintiff in any way that they would be receiving such a penalty. The Board had mistakenly sent a letter to Aegis Corporate Services Limited, however when informed that this company was not involved with the ship in question, the Board did not formally inform Mifsud & Mifsud Advocates that they were being investigated, but they simply proceeded to issue the fine. The Court found that the lack of the Board to send an official notice to Mifsud & Mifsud Advocates informing them that they are being investigated and requesting them to make their submissions could have been committed as a result of efficiency and not as a result of bad faith.

The Court also dismissed the scenario that the Board could have come to the same conclusion as it did when reviewing the submissions of Aegis Company Limited. Among other case law the Court quoted Lord Wright in the decision pronounced by the House of Lords in the UK in the names of General Medical Council v. Spackman: “If the principles of natural justice are violated in respect of any decision, it is, indeed, immaterial whether the same decision would have been arrived at in the absence of the departure from the essential principles of justice. The decision must be declared to be no decision”. This is what the Maltese Court did as it found that the lack of procedural steps in terms of natural justice rendered the administrative decision to award the fine null, invalid and without effect.

The Court ordered that the fine is refunded in its entirety and the defendant is to pay the Court expenses. This judgment is another important milestone in the field of judicial review of administrative decisions taken in breach of the legal steps leading up to such decisions, which decisions may be judicially challenged and overturned.