The continuing case-law differentiation between the Chambers and the plenary session of the Council of State on the same subject violates the principle of legal certainty and fair trial
JUDGMENT
Sine Tsaggarakis A.E.E. v. Greece 23-05-19 (no. 17257/13)
SUMMARY
The case concerned divergences between the case-law of the Fourth and Fifth Sections of the Greek
Supreme Administrative Court and also between the plenary Supreme Administrative Court and its
Fourth Section.
The proceedings concerned an application for judicial review brought by the applicant company
against building permits and operating licenses awarded to rival companies for a multiplex in a
district designated for private residential premises. The central legal issue was whether it was
possible to re-examine the lawfulness of the building permit at the stage of examining the
lawfulness and appropriateness of issuing the operating licence. Ruling on a referral from its Fourth
Section, the plenary Supreme Administrative Court held, like the Fifth Section, that this review
should occur both when granting a building permit and when granting the operating licence, with a
view to ensuring better compliance with the constitutional principle of environmental protection.
After rehearing the case, however, the Fourth Section did not comply with the judgment of the
plenary Supreme Administrative Court. It held that, under the principle of legitimate expectation,
the lawfulness of the building permit could not be re-examined by the authorities when issuing the
operating licence. In consequence, it dismissed the applicant company’s application for review.
The Court found it clear that the conflict in the case-law between the Fourth and Fifth Sections had
persisted for years, and still continued, despite the intervention by the plenary Supreme
Administrative Court. This had created a situation of legal uncertainty, pointing to the
ineffectiveness of the mechanism for harmonising the case-law, which in this case ought to have
been secured by the referral of the case to the plenary Supreme Administrative Court. The
conditions laid down by the Court in the area of legal certainty had thus not been met in the present
case.
PROVISION
Article 6 § 1 (fair trial)
PRINCIPAL FACTS
The applicant, Sine Tsaggarakis A.E.E., is a company with its registered office in Greece. It operated
in the entertainment sector and ran a multiplex in Heraklion.
In 2007 the applicant company brought an application for judicial review of building permits and
operating licences awarded to rival companies for the operation of a multiplex. It alleged, in the first
place, that these permits were illegal, since the area concerned was earmarked for the construction
of private housing and the authorities had not carried out a preliminary examination of compliance
with the environmental conditions set out in the regulations. Secondly, it submitted that the functioning of the rival multiplex would subject it to unfair competition, since it was running its own multiplex in a neighbouring district.
In 2009 the Fourth Section of the Supreme Administrative Court stated that, in view of the principle
of legitimate expectation, the lawfulness of the building permit for a cinema could not be reexamined by the authorities when granting the operating licence. Noting, however, that there existed a divergence of case-law between it and the Fifth Section – which considered that this examination was possible both at the stage of granting the building permit and when issuing the operating licence – it decided to refer the case to the plenary Supreme Administrative Court.
In 2011 the plenary Supreme Administrative Court held, like the Fifth Section, that such an
examination could be conducted both at the stage of granting the building permit and when issuing
the operating licence, in order to upheld the constitutional principle of environmental protection
(judgment no. 1792/2011).
In 2012 the Fourth Section of the Supreme Administrative Court delivered a judgment
(no. 3064/2012), reiterating its initial position. Thus, it did not follow the plenary court’s judgment,
and dismissed the applicant company’s application for judicial review.
In the meantime, in 2008 the applicant company asked the urban planning office to seal off the rival
multiplex. Subsequently, as the Heraklion city council had not sealed off the building, the applicant
company applied to the Supreme Administrative Court. In 2014 the Fifth Section of the Supreme
Administrative Court found in its favour (judgment no. 2738/2014), finding that the authorities were
required to seal off the multiplex. However, the city council refused to comply with that judgment
because, in the interim, the rival company had applied to benefit from the provisions of the law on
regularisation of illegal constructions. The rival multiplex continues to operate.
THE DECISION OF THE COURT
In the Greek administrative system, it was the Supreme Administrative Court, sitting as a full court,
which was responsible for eliminating divergences in the case-law. In the present case, the plenary
Supreme Administrative had been required to rule on whether or not the principle of legitimate
expectation (relied on by the Fourth Section) should override the principle of environmental
protection (relied on by the Fifth Section). In this connection, the plenary court had held that the
question of whether it was permissible to open the multiplex had to be reviewed both at the stage
of granting the building permit and when issuing the operating licence, with a view to improving
compliance with the constitutional principle of environmental protection (Article 24 of the
Constitution). It had also noted that the issue of the principles of legitimate expectation and the
stability of administrative situations – the principles on which the Fourth Section had based its ruling
– did not arise in the present case, since those principles could not be applicable when a situation
had been created in breach of constitutional provisions. In other words, the plenary Supreme
Administrative Court had ruled on the basis of the hierarchy of norms and had prioritised the logic
underlying the Fifth Section’s case-law. It had precluded from the outset the application of the
principle of legitimate expectation relied on by the Fourth Section.
Nonetheless, the Fourth Section, after rehearing the case, had decided along the lines of its previous
case-law, referring to exceptional circumstances which justified acceptance of the fait accompli on
the basis of the principle of legitimate expectation, although that approach had been ruled out by
the plenary Supreme Administrative Court on the grounds that it should yield to the constitutional
principle of environmental protection.
As to the Fifth Section, in judgment no. 2738/2014 it too had persisted in its logic of environmental
protection and had ordered that the multiplex be sealed off. Although the subject matter of the
applicant company’s applications before the Fourth and Fifth Sections was technically different, the
two appeals in fact pursued the same purpose, namely ending the activities of a company operating
in a large building constructed on a plot of land designated solely for private housing. As a result, a
situation ensued in which the Fourth Section’s judgment permitted the rival multiplex to function
normally, while the Fifth Section’s judgment ordered that its operation be terminated by having the
multiplex sealed off. The situation had been worsened by the city council’s refusal to comply with
the Fifth Section’s judgment, a refusal endorsed by the three-judge committee of the Supreme
Administrative Court – the body in fact responsible for monitoring the proper execution of that
court’s judgments – which, in justifying its decision, had referred to the existence of an application
for regularisation lodged by the rival multiplex.
In the Court’s view, it was therefore evident that the divergence between the Fourth and Fifth
Sections had persisted for years and still continued, in spite of the intervention by the plenary
Supreme Administrative Court. This had created a situation of legal uncertainty, pointing to the
ineffectiveness of the mechanism for harmonising the case-law, which in the present case ought to
have been secured by referral of the case to the plenary Supreme Administrative Court. In
consequence, the Court considered that the conditions laid down by it in the area of legal certainty
had not been met. It followed that there had been a violation of Article 6 § 1 of the Convention.
Just satisfaction (Article 41)
The Court held, by a majority, that Greece was to pay the applicant company 8,000 euros (EUR) in
respect of non-pecuniary damage and EUR 5,000 in respect of costs and expenses.
Separate opinions
Judges Wojtyczek and Eicke each expressed a dissenting opinion. These opinions are annexed to the
judgment(echrcaselaw.com editing).
