Government boards subject to judicial review

Dr Radmilli works at Mifsud & Mifsud Advocates

In the case ‘L-Avukat Malcolm Mifsud u l-Avukat Cedric Mifsud vs il-Bord ta’ Sorveljanza Dwar Sanzjonijiet’ before Judge Audrey Demicoli, the Court had 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 of the Laws of Malta, the Code of Organisation and Civil Procedure.

The Court 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. The facts of this case saw the defendant Board dishing out a fine without first making contact and notifying the plaintiff in any way. 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.      

As has become standard procedure, when a government entity loses a case before the ordinary courts, an appeal was filed - actually two appeals. One appeal was in relation to the partial judgment given by the Civil Court whereby two preliminary pleas were rejected. The other appeal was filed against the final judgment.

The grievance of the Appellant Board against the partial sentence was based on the fact that the First Court should have accepted the preliminary plea that a decision by the Sanctions Monitoring Board cannot be judicially reviewed under Article 469A in view that a board does not fall within the definition of a public authority as per the said Article in the law. Appellant based its argument on the fact that in the law the following is stated: “Public authority’ means (…) Boards which are empowered in terms of law to issue warrants for the exercise of any trade or profession”. The Appellant argued that it is only boards which issue warrants which fall within the definition of a public authority which is reviewable.

The Court of Appeal noted that the Appellant quoted jurisprudence which dealt with boards which were of a quasi-judicial nature, while this case was not in relation to such a board. The Court came to the conclusion that the Sanctions Monitoring Board fell within the definition of a local authority and a body corporate established by law which in turn meant that it is caught by the definition of a ‘public authority’ and is therefore reviewable.

Firstly, the Board was set up by a specific law; secondly, the Board is a body corporate as it is not made up of one physical person, but by a number of persons. Such persons are representatives of various ministries, departments and other public entities. The Court upheld the argument of the Appealed party that all such representatives are in fact vested with public authority powers. In addition, the Board’s functions are of a regulatory and administrative nature in the name of the Government of Malta.

The Court of Appeal clarified once and for all the nebulous interpretation of the law where the State Advocate would invariably raise the plea that only those boards which issue warrants are reviewable. The Court categorically stated that the fact that a board does not fall within the definition of a board which grants warrants does not automatically exclude it from falling within another part of the legal definition of a public authority.

The Court of Appeal then looked into the appeal in relation to the part of the judgment at First Instance that there was a breach of the principles of natural justice in view that the Board failed to warn the firm, Mifsud & Mifsud Advocates that it was being investigated before it was then fined. The appealed party claimed that the Board acted in breach of the natural justice principle of audi et alteram partem. The Court deliberated on the meaning of this principle and in so doing pointed out that before an administrative decision is taken in relation to any person, that person has to be given the chance to defend themselves, and this can only be done if they are given the chance to give their version and have the authority take note of what such person has to say. The Court concluded that the Sanctions Monitoring Board was not administratively and procedurally correct when it gave its decision on 15 March, 2021, without having previously warned the firm Mifsud & Mifsud Advocates that it was being investigated. The Board was wrong to have slapped the fine without prior warning.

The Court rejected the Sanctions Monitoring Board Appeal, and ordered that the fine be refunded back to Mifsud & Mifsud advocates, not as a form of damages suffered, but as a refund of the administrative fine paid by them. The Court also ordered that all expenses in relation the Appeal were to be borne by the Sanctions Monitoring Board.

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 even in the case of a government board.