PA board member Matthew Pace won’t resign... but the Prime Minister believes he should

Prime Minister Joseph Muscat has said that he believes Planning Authority (PA) board member Matthew Pace should resign, following a court decision which nullified a permit granted for the DB Group development in St George’s Bay over Pace’s conflict of interest in the case.

“I agree he should resign,” Muscat said, when asked on Wednesday morning. “We have the rule of law and I cannot simply remove him, but I believe my opinion carries weight.”

Pace was one of the board members who voted in favour of the mega-project, which was approved by PA in September last year, but the permit was declared null by the courts last week over a conflict of interest on the part of Pace.

Mr Justice Mark Chetcuti decreed that Matthew Pace’s conflict of interest transpired from his potential financial interest in the success of the DB project. This is because together with his partners in Remax he stood to gain from commissions from the sale of a part of the development, which the firm had advertised.

But while confirming his conflict of interest in this case, the judge also concluded that Pace was not precluded from serving as a board member because of his involvement in the real estate sector but should have recused himself in cases where he stood to gain financially.

Contacted by this newspaper yesterday, Pace said he disagreed with the court’s interpretation, insisting that the court judgment in question appears to have been based on “evidence given by third parties” which in his opinion is “factually incorrect”.

He promised to clarify his position further “at the opportune moment”.

“I will therefore refrain from expressing my views on this judgement other than pointing out that I was never a party to this case, was never invited to testify and therefore it is evident I was subjected to judgement without having been given an opportunity to clarify my position.”

But despite his misgivings Pace is committed to respect this judgement.

“I will most definitely respect this judgement, which says I should not have participated in the vote in question.  However, the Judge made it very clear that my business involvements at the time did not preclude me from continuing my present role at MEPA,” Pace said, adding that therefore he will not be tendering his resignation from the PA Board.

When asked whether he had ever raised the potential conflicts transpiring from his business involvements before the fateful decision on the DB project, Pace replied that his business involvements were disclosed in full as per standard procedure. “This shows that throughout this process I always acted in good faith and in a transparent manner.”

Earlier in the week on Monday, planning minister Ian Borg urged Matthew Pace to “respect” the court decision – without actually demanding that he resign.

“Well, I haven’t received any resignations whatsoever. I always say that everyone, be it me myself, the government, the public, or anyone, should always respect any court decision, even Matthew Pace,” the minister said

Pace did not reply to MaltaToday’s questions on whether he has discussed his position on the PA board after the court judgement with Planning Authority officials.

How court qualified Pace’s conflict

Mr Justice Mark Chetcuti decreed that Matthew Pace’s conflict of interest transpired from his potential financial interest in the success of the DB project. This is because together with his partners in Remax he stood to gain from commissions from the sale of a part of the development, which the firm had advertised.

But while confirming his conflict of interest in this case, the judge also concluded that Pace was not precluded from serving as a board member because of his involvement in the real estate sector but should have recused himself in cases where he stood to gain financially.

The court said that Matthew Pace had a specific impediment, aimed at a particular project in which he had a monetary interest, “which if not actual was certainly potential and this in a realistic, not hypothetical way”.

Pace could not decide on a project in which he had such a potential interest in its approval. This led to a lack of “subjective impartiality” on Pace’s part, said the court.

Moreover the court decreed that irrespective of how small Pace’s interest was in comparison to the size of the project, “the public perception is that his (Pace’s) personal interest conditioned his vote” and in the eyes of the public he appeared biased due to the simple association made between his vote and the sale of apartments in the same project.

In this way he was not fulfilling the expectation of “neutrality” expected from him in his role as a board member. 

The court not only reprimanded planning board member Mathew Pace for not recusing himself, but also rapped the Environment and Planning Review Tribunal, which had previously exonerated Pace for contributing to “a perception of complacency towards the lack of impartiality on the PA board”.

In the original appeal before the Environment and Planning Review Tribunal, Pace was exonerated. The tribunal had noted that advertising was done by different estate agents. On the basis of this the tribunal concluded that the fact “that Pace had an interest in one of these agencies did not put in doubt his impartiality or create a conflict of interest”.

According to the Development Planning Act, no member of the Planning Board can be appointed if they have a “financial or other interest in any enterprise or activity which is likely to affect the discharge of his functions as a member of the Planning Board”.