The massive DB project at the former ITS site in St George’s Bay has hit a major snag after the appeals court ruled today that the planning permit granted in September last year is null and void.
Judge Mark Chetcuti ruled that planning board member Matthew Pace had a conflict of interest because of his involvement in real estate when he voted on the project.
The court was deciding on an appeal filed by local councils and several environment groups against a decision by the Environment and Planning Review Tribunal that had ruled in favour of the permit.
“The court… revokes the tribunal’s decision and considers the planning board’s decision of 20 September 2018, in these cricumstances, to be null and void,” Chetcuti ruled.
This means that the PA decision to grant the DB Group a planning permit no longer holds and the PA will have to reconsider the case.
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.
The court said it was surprised at the way the tribunal had tackled the issue. “The project is an enormous one with enormous financial repercussions… [and] is treated so lightly by those who have the duty to avoid creating an obstacle to a just decision and perceptions of bias,” Chetcuti ruled.
Lawyers Claire Bonello, Malcolm Mifsud, Cedric Mifsud and Ian Vella Galea appeared for the plaintiffs.
In her first reaction after the ruling, lawyer Claire Bonello, who filed the appeal on behalf of the local councils and several organisation, said this was a victory for all those who opposed the project.
Background to the case
The lawsuit was made possible by a crowdfunding initiative last October, when over €26,000 were raised to cover legal expenses for actions against the project. This led to an appeal against the decision taken on 20 September by the Planning Board.
After three months of hearings, the planning appeals tribunal gave the go ahead for the DB Project but Transport Malta had to confirm within 30 days that the road network will cater for the additional traffic before a final compliance certificate is issued to the project.
The developer was also instructed to create an additional 270 square metres of public open space and reduce the height of the tower by 10m, and that of the hotel by 8m.
But the tribunal had turned down other objections by the appellants including that of an alleged conflict of interest of PA board member Matthew Pace.
Matthew Pace’s conflict
The appellants questioned the compatibility between financial services broker Matthew Pace’s interest as a co-owner in the Swieqi branch of property agents Remax, which was advertising apartments in the project.
They also questioned the overall suitability of Pace to serve on the board when he had a direct and clear interest in an activity, which may conflict with his position in a board that has quasi-judicial powers.
The activists argued that this should have disqualified him from serving on the planning board of which he has been a member since 2013.
But the tribunal dismissed these claims, arguing that “other members of the board had publicly expressed how they would be voting” – adding that it is these members who may have had a conflict of interest.
They also referred to “proof” submitted by Pace that advertising for the apartments 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.”
It was here that the tribunal hinted that the argument that this member should not vote in such circumstances “can be extended to the NGO representative whose public agenda is always declared”.
It also extended the argument to party representatives arguing that the argument can be stretched to projects located in the districts they represent”.
The tribunal also noted that the law itself dictated that independent members of the board should be chosen for their knowledge and experience in various areas including commerce and industry, cultural heritage and participation in civil society organisations.
“If taken to an extreme the argument of the appellants would create a situation of permanent conflict of interests for everyone,” the tribunal had ruled.
After this decision, the Pembroke, St Julian’s and Swieqi councils, Moviment Graffitti, Flimkien għal Ambjent Aħjar, Din l-Art Ħelwa and Friends of the Earth Malta and nine residents filed an appeal in the law courts asking for a judicial review of the tribunal’s decision.
It is this court decision that was decreed today.
The €300 million City Centre project, which includes a 37-storey tower and 17-storey hotel, was approved in September 2018 despite an unprecedented 4,500 objections from the public, local councils and NGOs.
The project is earmarked on the site that used to house the former tourism school. Controversy surrounded the granting of the ITS public land to the DB Group in 2017 for a premium of €15 million spread over seven years.
The government would have also raked in €23.4 million from redeemed leases when the residential apartment are sold.
PN calls for investigation
In a statement, the Nationalist Party said today’s decision had thrown the way the Planning Authority works under a spotlight.
It said the government had introduced in the authority an attitude of everything goes, with persons being appointed directly by the minister and failing to declare their conflicts of interest.
The court’s decision raised a number of questions that the PA needs to answer, the PN said, also noting that another member of the board had been flown in by private jet for the meeting in which the project had been approved.
€8,590 had been spent on that flight. In view of this, there needs to be an independent investigation that looks into the operations, the running and the spending of the Planning Authority, the party said.