Faster damages in the event of unlawful government acts
On 8 July 2016 the Dutch Supreme Court rendered a decision about the doctrine of unlawful government acts that is worth reading. In this case, damages were sought in response to the unlawful refusal of a permit.
The municipality had refused the permit despite having notionally granted it in the meantime. The proceedings regarding that matter spanned a total of three years and the appeals reached the Council of State. Damages in the amount of EUR 770,577 were subsequently claimed in respect of a lost a subsidy that would evidently have been received if the planning application had been handled properly. This case concerned a planning application to replace the turbine nacelle of a wind turbine in the Municipality of Noordoostpolder. Like the court of appeal, the district court dismissed the claim, but the Dutch Supreme Court reversed that judgment. The judgment rendered by the Court of Appeal of Arnhem-Leeuwarden was set aside and the case was remanded to the Court of Appeal of 's-Hertogenbosch for a new judgment.
Why is this case so important? The court of appeal had dismissed the claim because the claimant was not the one who had applied for the building permit, but an owner of the right of superficies that had in the meantime transferred its income and expenses to a third party, a successive legal entity, under a particular legal construction. The court of appeal held that since the claimant could not be regarded as an interested party [belanghebbende] within the meaning of the Dutch General Administrative Law Act [Algemene wet bestuursrecht] for the purposes of the decision issued on the permit application, it could not claim damages either.
The Dutch Supreme Court made short work of this reasoning:
‘Contrary to the court of appeal’s ruling, liability to an aggrieved party based on the standards relied on [by the claimants] in this case does not require that the aggrieved party be an interested party within the meaning of the General Administrative Law Act. This is because it is conceivable that the interests of certain ‘third parties’ known to the administrative body are involved in a decision to such an extent that the administrative body can also fail to observe due care in respect of those third parties – depending on the further circumstances of the case – by failing to observe those standards (cf. Dutch Supreme Court judgment of 11 January 2013, ECLI:NL:HR:2013:BX7579, NJ 2013/47). The arguments put forward [by the claimants] boil down to their case involving such apparent involvement and that therefore an unlawful act was committed against them.’
In short, the Supreme Court clearly shows that reliance on unlawful government acts must not be treated too lightly. Third parties may invoke liability as well as interested parties. Strangely enough, this means that the Supreme Court deems the scope of liability on the grounds of unlawful government acts to be broader than unlawful government acts as such under administrative law, which is precisely the area of law where the ‘mistake’ was made. We look forward to the follow-up judgment.
Read the entire Supreme Court judgment of 8 July here (Dutch only).