The Malta Independent 22 February 2018, Thursday

Judge dismisses request, says challenge made under wrong law

Tuesday, 13 February 2018, 16:30 Last update: about 9 days ago

A judge has dismissed a request to declare a retroactive tax on tuna catches illegal, ruling the challenge to have been made under the wrong law.

In April 2016, Malta Fish Farms Ltd (MFF) had filed judicial proceedings against the Minister for Sustainable Development and Climate Change and the Director General of the Department of Fisheries and Aquaculture.

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MFF has been operating fish farms, hatcheries for many years and sells tuna.

It received a letter in October 2015 from the Director General of the Department of Fisheries and Aquaculture, urging it to pay €117,645 in retroactive fees due since May that year worked out over 511.1 tonnes of tuna.

Under subsidiary legislation enacted by Legal Notice 344 of 2015, a tax of €230 on every ton of tuna caught since May 2015 was introduced.


The company objected to the introduction of the fees by legal notice, particularly retroactive ones, saying this was, effectively, a back tax.

The company filed a judicial letter in April 2016, in which it argued that the Ministry had a right to issue delegated legislation, but that this was subject to judicial review by the courts. The company argued that the legal notice in question was ultra vires (went beyond the scope of its powers) as it was issued under the wrong Enabling Act, which had been repealed.

Together with this, Legal Notice 344 of 2015 went against the spirit of administrative law, and the laws amended addressed only the remuneration due to officials and not fees payable by aquaculture operators on the products themselves, argued MFF.

The law gave no power to the minister to issue pecuniary regulations in a retroactive manner, they said. The measure was one of a fiscal nature and it was a well-established legal principle that taxes cannot be imposed retroactively. It asked for the refunding of the €117,645 which it had paid under protest

On its part the ministry denied that this was an administrative law issue and that a legal notice could not be subject to judicial review under 469A. It also alleged that, contrary to its assertions, the plaintiff company was “not entirely in line with the applicable laws.”

The minister had the power to issue the legal notice with retroactive effect according to law, they argued.

The court observed that in this case, the plaintiff was attacking the Minister’s issuing of the Legal Notice by saying it went beyond the scope of his powers. It did so in terms of article 469A of the Code of Organisation and Civil Procedure. The defendant was arguing that this article could not be used to attack a law.

It noted that previous judgments of the Court of Appeal had held that the defence’s argument was correct and that the remedy of judicial review of administrative actions under 469A could not be used to evaluate the probity of a law.

The court ruled that the remedy for the plaintiff to attack the validity of a legislative instrument was “not to be found in Article 469A, but elsewhere.”

It disagreed with the argument that it was an administrative action of the minister which was being impugned, saying that article 469A didn’t mention laws or subsidiary legislation as administrative actions “and the court disagrees that the word ‘order’ in the same article is equivalent to ‘law’ as submitted by the plaintiff.”

Subsidiary legislation is not a ministerial order made under the auspices of the minister’s own power but was a legislative act whose formulation had been delegated by Parliament.

“Therefore the word ‘order’ in article 469A must be read in this light, that is, an order issued by the Minister in his capacity as a Government Minister with an area of responsibility entrusted to him by the Prime Minister...which are eminently administrative functions related to ministerial functions in the Ministry which he is entrusted with running.”

For this reason, the court upheld the defence’s preliminary pleas and declared the action null, describing the action as “inapplicable to the requested remedy.”

 

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