The Court of Appeal in its Constitutional capacity, composed of Chief Justice Silvio Camilleri, Mr Justice Geoffrey Valenzia and Mr Justice Giannino Caruana Demajo, on June 24, 2011, in the case “John Azzopardi on behalf of J.A. Trading”, held, among other things, that the VAT Commissioner was not responsible for proceedings before the VAT Appeal Board or for any delay nor was the VAT Commissioner the person who could provide the remedy requested by the company. It was the state which was responsible for any breach of the company’s right to a fair trial within a reasonable time.

The facts in this case were as follows.

JA Trading (company) had received a VAT assessment dated December 26, 1996, in terms of the VAT Act, Chapter 406 of the laws of Malta, for the period January 1, 1995 to July 31, 1996. The company claimed to have lodged an appeal in January 1997, but its appeal was not registered and it became necessary for it to file a second application on October 27, 1999.

In absence of any evidence to prove the presentation of the appeal in January 1997, the board considered that the company had entered an appeal fuore termine as of October 1999. In this respect, the appeal was declared to be null and void on September 12, 2006.

The company appealed to the courts and subsequently on April 12, 2007, the board’s decision was confirmed by the Court of Appeal. The Court of Appeal was not satisfied that the company had filed an appeal in January 1997, and once this was not proven it could not be stated that there had been a violation of its rights to a fair trial.

Faced with this situation, the company filed these proceedings before the First Hall Civil Court, in its Constitutional capacity, against the VAT Commissioner, claiming to have suffered a breach of its human right to a fair trial within a reasonable time, under article 39 (2) of the Malta Constitution and article 6 (1) of the European Convention of Human Rights.

It was stated that the proceedings before the board were irregular. Allegedly proceedings had been postponed for another sitting, but instead the board had cancelled the sitting and proceeded to give its judgment. In this way the company’s rights to a fair trial were violated.

The company also maintained that the duration of the case before the board had been unreasonably protracted, and this without any fault of the company. The company had thereby been prejudiced and suffered damages.

The court was requested to declare that the company’s right to a fair trial within a reasonable time had been infringed; to provide a suitable remedy and to restore the company to its position when it had received the VAT assessment.

It was also requested to declare the decision of the VAT Appeal Board of September 12, 2006 and of the Court of Appeal dated April 12, 2007 to be null; to order the board to hear the appeal on its merits; and to liquidate compensation payable to the company.

The VAT Commissioner contested the company’s application. He submitted in defence that he was not the legitimate defendant in these proceedings as he did not represent the VAT Appeal Board. He asked the court to decline to exercise its powers under the Constitution, once the company had failed to exhaust its ordinary remedies (article 46(2) of the Constitution and article 4 (2) of Chapter 319.

“Fiscal issues” were not deemed to be “rights” and “civil obligations” within the context of the right to a fair trial under article 39 (2) of the Constitution and article 6 of the European Convention.

As regards the merits, the VAT Commissioner disputed any breach of the company’s right to a fair trial. He said it had been afforded every opportunity to present its case and grievance to the courts. Nor was there any evidence that it had filed an appeal in January 1997, or any unreasonable delay in the proceedings.

On October 15, 2010, the First Hall decided by declaring that the company had suffered a breach of its right to a fair trial within a reasonable time. It found that the board had taken too long to decide the case, and awarded the company €800 in compensation. It rejected all its other requests.

The court maintained that the function of the Constitutional Court was not to act as a court of third instance. It was not its task to review the ordinary court’s interpretation of the law and its appraisal of facts; re: Valfracht Maritime Co. Ltd vs Attorney General dated November 22, 2006.

“The court calls this principle the fourth-instance doctrine because it is not to be seen as a third or fourth instance of appeal from national courts. It is important to bear the doctrine in mind when considering a particular factual situation based on criminal or civil proceedings raises the issue under article 6”.

Each member state had the discretion to regulate procedural issues, provided that national law did not impose unreasonable restrictions on the exercise of such right. At any stage of the proceedings a tribunal could consider ex officio whether an appeal had been filed in time.

In this case both the board and the Court of Appeal were not convinced that the company had first filed an appeal in January 1997. The fact that both the board and the Court of Appeal did not agree with the company did not mean that its rights were being infringed.

The First Hall was of the opinion that a wait of five years for the commencement of proceedings before the board was exaggerated in the circumstances. The company had a right to a fair trial within a reasonable time. A heavy backlog of cases did not justify a delay. It was the duty of the state to appoint a sufficient number of board members.

Aggrieved by the decision of the Court of First Instance, the VAT Commissioner entered an appeal, calling for its revocation.

The company too appealed, requesting the court to vary the decision of the First Hall and to declare that its right to a fair trial had been violated by the loss of its appeal of January 1997.

On June 24, 2011, the Court of Appeal gave judgment by accepting the VAT Commissioner’s appeal and by revoking the decision of the First Hall. It declared that the VAT Commissioner was not the legitimate defendant and freed him from these proceedings.

The following reasons were given for the court’s decision.

The VAT Commissioner was not the proper defendant in these proceedings, as he did not represent the board. He was simply a party who appeared before the board. The VAT Commissioner was not responsible for proceedings before the board or for any delay, nor was the VAT Commissioner the person who could provide the remedy requested by the company. It was the state which was responsible for any breach. Reference was made to Chapter 12, article 181.

It was not the competence of this court to reopen the merits of loss of the company’s appeal of January 1997, which had already been determined by both the board and the Court of Appeal. It noted that the company had not produced any proof that it had filed an appeal in January 1997.

Dr Grech Orr is a partner at Ganado & Associates.