Judicial review may take place on fines, even though they have been paid

The decision to impose a fine from an administrative authority may be subject to judicial review even though that fine was paid. This was held in Avukat Dr Malcolm Mifsud u Avukat Dr Cedric Mifsud -v- Il-Bord ta’ Sorveljanza dwar Sanzjonijiet, decided by the First Hall of the Civil Courts on 11 March 2022. The Court was presided over by Judge Audrey Demicoli.

The Plaintiffs filed a sworn application, in which they asked the court to declare that a decision taken by the Sanctions Monitoring Board was ultra vires in terms of Article 469A(1)(b) of the Code of Organisation and Civil Procedure and that the Board is responsible for damages.

The Board filed a statement of defence and held preliminarily that the decision subject to this case, is a fine of €800 and once it was paid, then the Plaintiffs accepted the imposition of the file. The Board also held that it is not a public authority as defined in Article 469A of the Code of Organisation and Civil Procedure (COCP).

The Court analysed the case in that the Board had sent a letter in September 2022 of Aegis Corporate Services concerning services rendered to a Russian national, who was subject to sanctions issued by the European Union, as he had registered his yacht in Malta. The Board held that this went contrary to Article 17(6) of the National Interest (Enabling Powers) Act.

Dr Cedric Mifsud was the resident agent and the Board concluded that since he was a shareholder of Aegis Corporate Services Limited, the company was responsible.

The Company still sent all the information on the sanction screening. Dr Mifsud explained that the registration of the vessel and the activity of the resident agent was preformed by the law firm and not by the corporate services company. The vessel was in fact owned by another Russian national. Just the same the Board fined the law firm €800 in terms of the Article 17(6) of the National Interest (Enabling Powers) Act. Dr Mifsud explained that the firm paid the bill because if it was not paid by 15 March 2021, the fine will increase daily.

On the first plea, that once the fine was paid, then no further action may be taken, it resulted that the Board had sent an email on 29 March 2021 , saying that if the fine is not paid on that day, the fine would increase. The reply was that the payment was being effected, however, this was being done under protest.

In the reply email Dr Mifsud wrote: “Despite payment being made, the imposition of the fine will be contested before the appropriate forum. The fact that there is no recourse to an appeal does not mean we cannot contest it. We are of the firm and learned opinion that the decision is flawed both from a procedural aspect and a legal one.” The lawyer sent a proof of payment.

The Court held that it was clear from the exchange of emails that the fine was being contested. The Board argued that the maximum fine is €1,000 and therefore, the lawyers would have not paid and left it accumulate to the maximum. The Court disagreed as the fine was a sanction irrespective of the amount of the fine.

The Court made reference to previous cases where fines although fines were paid, the court ordered their refund. In William sive Willie Grech u Anna Grech -v- Awtorita ghat-Trasport f’Malta, the Court on 18 September 2012, had ordered that the Plaintiffs of that case were refunded with overcharged registration tax. The tax was paid under protest. In Public Broadcasting Services Limited -v- Awtorita tax-Xandir, decided on 11 May 2009 the Court held the law binds us to obey the law and pay a fine. If it contested and proved that that fine was unjust then that person should receive a refund.

As to whether the Board is a public authority in terms of the judicial review, Article 469A of the COCP states that these public authorities must issue licences and warrants. The Board does neither and all it does is take decisions, give recommendations and advice.

The Plaintiffs held that Article 469A of the COCP gives a wide interpretation of the term “Board” and the Sanctions Monitoring Board falls under the definition, because it preforms administrative act and it gave an administrative fine and therefore, it exercises administrative powers. Article 468A states:

“‘Public authority’ means the Government of Malta, including its Ministries and departments, local authorities and any body corporate established by law and includes Boards which are empowered in terms of law to issue warrants for the exercise of any trade or profession.”

The Court agreed with the Plaintiffs, as the law uses the word “includes” and therefore, Boards should be included as public authorities. In fact the National Interest (Enabling Powers) Act, shows that it is a regulatory board.

The Court then moved to reject the two pleas and ordered that the case continue.