Belgian Constitutional Court decides to annul provisions on administrative loop

by Allen & Overy LLP
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In a judgment dated 8 May 2014 (judgment nr. 74/2014), the Belgian Constitutional Court has decided to annul articles 4.8.4 and 4.8.28,§2 of the Flemish Urban Planning Code.

Article 4.8.4 of the Flemish Urban Planning Code allowed the Council for Permit Disputes (Raad voor Vergunningsbetwistingen) (ie the Flemish administrative court competent to rule on appeals against urban planning permits) to apply a so-called 'administrative loop' (bestuurlijke lus). By applying such administrative loop, the Council of Permit Disputes could – through an interim-judgment – allow an administrative authority whose decision was being challenged to rectify certain irregularities of the relevant decision pending the appeal before the Council for Permit Disputes. 

Article 4.8.28,§2 of the Flemish Urban Planning Code stated that if the Council of Permit Disputes decided to apply an administrative loop, it could impose on the administrative authority the obligation to pay the costs of the proceedings. 

In February 2013, several plaintiffs initiated annulment requests to have these articles annulled, arguing that the articles were in breach of various constitutional rights and principles. In its 8 May 2014 judgment, the Belgian Constitutional Court followed the plaintiffs’ arguments and decided to annul articles 4.8.4 and 4.8.28,§28 of the Flemish Urban Planning Code. This means that these articles will be retroactively annulled as soon as the Constitutional Court’s judgment is published in the Belgian Official Gazette. 

1. THE ADMINISTRATIVE LOOP

1.1 The Decree of 6 July 2012

In 2012, the Flemish regulator introduced the possibility for the Council of Permit Disputes to offer an administrative authority, whose decision was being challenged, a way to remedy certain irregularities by applying an administrative loop.  Under this mechanism, irregularities that did not disproportionally jeopardise the interested parties could be rectified by the competent administrative authority pending the appeal procedure before the Flemish Council for Permit Disputes.

The Decree dated 6 July 2012 (which was published in the Belgian Official Gazette on 24 August 2012, and entered into force on 1 September 2012) amended the existing article 4.8.4 of the Flemish Urban Planning Code and provided that the administrative loop could only be applied in respect of irregularities which could be remedied without impacting on the decision itself.

According to the preparatory works of the 6 July 2012 Decree, the aim of the Flemish Regulator was to avoid unnecessary legal proceedings and, where possible, reduce the length of existing proceedings. (Before the entry into force of the Decree of 6 July 2012, the Council for Permit Disputes could only annul an administrative decision in the case of an irregularity, and the administrative authority would then need to take a new administrative decision, which could then be once again be challenged by interested parties). 

1.2 Arguments raised by the plaintiffs 

The plaintiffs raised three successful arguments: (i)  the article violates the judiciary's duty of independence and impartiality, (ii) it breaches the right of defence, the right to have a fair hearing, and the right to have access to a judge, and (iii) it breaches the duty to formally give reasons for decisions, as foreseen in the Act of 29 July 1991 regarding the formal motivation of administrative decisions.

As a first argument, the plaintiffs invoked that – by allowing the administrative authority to apply the administrative loop – the Council for Permit Disputes was issuing a ruling on the irregularities and the possibility to remedy these irregularities, without any a fair debate between parties. The Constitutional Court confirmed this view, and emphasised that the Council for Permit Disputes as part of the judicial power, may not intervene with the administrative authority’s (discretionary) powers.

As a second argument, the plaintiffs stated that the possibility to apply an administrative loop did not guarantee a fair debate, and that interested parties did not have the opportunity to lodge an appeal against a decision taken in the context of such administrative loop. The Constitutional Court followed this reasoning and held that this constitutes a breach of the rights of defence and fair hearing, and the right of access to a judge.

Finally, as a third argument, the plaintiffs argued that the Act of 29 July 1991 requires administrative decisions to be duly motived at the time that such decisions are issued, but does not allow the administrative authorities to add any post factum motivation. As the administrative loop allowed and introduced such post factum motivation, the Constitutional Court confirmed that the administrative loop breaches the principles set out in the 29 July 1991 Act.  

2. POSSIBILITY TO IMPOSE THE DUTY TO PAY THE COSTS OF PROCEEDINGS ON THE ADMINISTRATIVE AUTHORITY

As a general rule, article 4.8.28,§2 of the Flemish Urban Planning Code provides that the Council must impose the costs of proceedings on the unsuccessful party. However, in cases where the Council of Permit Disputes decided to apply an administrative loop, it could impose the costs of proceedings on the administrative authority (but was not obliged to).

The Constitutional Court considered that, in principle, if the Council for Permit Disputes annuls an irregular administrative decision, it must require the administrative authority to pay the costs of the proceedings. However, if an administrative loop were applied, this could result in a rejection of the appeal. As a result, the plaintiff would ultimately be regarded as the “unsuccessful party” and must bear the costs of the proceedings. The Constitutional Court held in this regard that the difference in treatment between plaintiffs is not justified, and annulled article 4.8.28,§2 of the Flemish Urban Planning Code to the extent this article applied to administrative loops. 

3. CONSEQUENCES OF THE JUDGMENT 

The Constitutional Court concluded that it should not limit the consequences of its annulment judgment (ie the consequences of the annulled provisions must not be maintained). As a result, articles 4.8.4 and 4.8.28,§2 of the Flemish Urban Planning Code will be retroactively annulled as from the publication of the judgment in the Belgian Official Gazette. Such publication has not yet taken place, but is expected to occur shortly.

This judgment will not only have an impact on disputes before the Council for Permit Disputes, but may also have an impact on the new procedural rules for disputes before the Belgian State Council, which were introduced in January 2014.

For a long time, the Belgian State Council could also only annul administrative decisions. It was only at the beginning of this year that the Belgian legislator decided that the State Council could also apply an administrative loop.  Although the new procedural rules of the State Council seem to cover some of the objections raised before the Constitutional Court (eg the rules include a mechanism aimed at guaranteeing a fair debate), some of the criticisms raised by the Constitutional Court seem to be more substantial and inherent in the mechanism of the administrative loop (eg the fact that the judicial power may not interfere with the administrative authority’s power and that decisions may not be motivated post factum). As the deadline for introducing annulment requests against these new rules has not yet expired, it remains to be seen whether these rules will be challenged, and if so whether they can withstand the scrutiny of the Constitutional Court.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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