In the practice of Costaș, Negru & Asociații in the field of administrative litigation we often encounter situations in which administrative acts are abusive and create real prejudice for litigants.
By way of example, in a series of recent judgments handed down by the Bihor County Court and upheld on appeal by the Oradea Court of Appeal, the team of lawyers from Costaș, Negru & Asociații succeeded in obtaining the annulment of the damaging administrative acts and in censuring the unjustified refusal of the Agency for Payments and Intervention for Agriculture (hereinafter APIA). As a consequence, APIA was obliged to make the payment of state aid that it had previously refused to grant. We intend to elaborate on the legal issue below.
The dispute was initiated by four companies as a result of APIA’s refusal to pay the exceptional financial aid granted by GD No 1053/2022, despite the fact that the complainant companies had been declared eligible for the said exceptional aid.
In concrete, following examination of the applications, the companies in question were declared eligible by the Agency for Payments and Intervention in Agriculture to receive the exceptional aid, as they met the conditions laid down in Government Decision No 1053/2022 for granting financial support.
However, the applicant companies did not actually benefit from the financial aid approved for payment by the defendant because, according to APIA, an inactive bank account was mentioned in the application for payment.
In order to remedy the situation, the applicant companies submitted an application, registered with APIA, requesting that the payment be made into an active account of the companies.
The applicant companies submitted that the material error concerning the account number referred to in the request for payment occurred as a result of a change, beyond their control, in the account number made by the Regional Directorate General of Public Finance – Treasury and Public Accounting Activity.
Further, APIA refused to make payment to the correct account on the grounds that the time limit for granting the exceptional aid had been exceeded, although in reality it was not a matter of a new application for payment but of correcting a simple clerical error.
In essence, APIA invoked, in its reasoning for refusing to re-issue the payment, the provisions according to which exceptional aid is paid until 30 September 2022. We considered that those provisions are not applicable in the present case. In practice, the initial payment to the applicants was made within the legal time-limit and all the formalities laid down in the legislative act were complied with and the companies were entitled to receive the aid.
In other words, it was not requested that a new payment per se be granted, but only that the payment, which had initially been transferred to an inactive account, be re-transferred, an error which cannot be imputed to the applicants, since the change in the treasury account was made as a result of the decision of the Regional Directorate General of Public Finance – Treasury and Public Accounting Activity.
Since APIA did not agree to grant the amounts, we applied to the Bihor County Court requesting the annulment of the damaging administrative acts and the censorship of the unjustified refusal to make the payment.
In view of the factual circumstances set out above, the first court found that despite the claims of APIA in this case, the claimants did not make any changes subsequent to the submission of the application, moreover, they made a request for notification to APIA – Bihor County Centre informing that it had made a change to the bank account of the companies.
In this context, APIA was aware of this change, but preferred to refuse to re-transfer the payment to a valid account. However, the purpose of the State aid scheme is to help beneficiaries to support farming activities in the beef, pig and poultry sectors and not to prevent these payments from being mad.
In essence, the court held that the applicants had fulfilled all the conditions of eligibility for the grant of financial support by informing APIA of the account opened with the State Treasury prior to the submission of the application, thus there was no amendment to the initial application.
As regards the APIA’s plea that the legal time-limit had expired, the court held that those defences could not be held to be well founded since the applicants had submitted the application for legal aid and the payment decision had been issued before the time-limit. It is important to note that the court agreed with our submissions in the application, namely that the applicants did not ask for a new payment to be made in breach of the statutory time-limit, but for the same payment to be made again to the valid account.
In the light of these considerations, the Bihor County Court upheld the action, censured the unjustified refusal of the authority and ordered APIA to pay the applicant companies the exceptional aid and the costs.
Further, APIA appealed against the judgments handed down by the Bihor County Court. The appeals were heard by the Oradea Court of Appeal, which dismissed them as unfounded, so the first court’s decisions remained final.
This article was prepared for the blog of the law firm Costaș, Negru & Asociații by atty. Maria Tușa and by atty. Loredana Feier, both from the Cluj Bar Association.
Costaș, Negru & Asociații is a law firm with offices in Cluj-Napoca, Bucharest and Arad, which provides assistance, legal representation and advice in several practice areas through a team of 20 lawyers and consultants. Details of the legal services and the composition of the team can be found at https://www.costas-negru.ro.
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