Problems of Discretionary Powers in Issuing Urban Planning Conditions and Restrictions

Given the legal significance of urban-planning development conditions and restrictions on land development (UPDCRs) as a key element of the initial data and the primary document for launching the vast majority of urban development projects, the seriousness of the problem of refusal to grant UPDCRs is obvious. And its scale is evidenced, for example, by the fact that, according to the audit report of the Department of Internal Financial Control and Audit of the Kyiv City State Administration (KCSA) of 31.01.2023, for the period of 2018-2021, out of 4624 applications for receipt of an UPDCRS submitted to the Department of Urban Development and Architecture of the KCSA, almost 77% of such applications were denied.

The UPDCRS is the basic document for design and it is in them that a specially authorised public authority defines a set of planning and architectural requirements for construction on the land plots in question. Therefore, it is obvious that an unreasonable or unjustified refusal to provide them leads to the need for judicial protection of violated rights and interests. And this is where the question of choosing the most effective way of such protection arises.

In court practice, the effectiveness is assessed only from the perspective of the interests of the person who suffered the violation. Namely, based on whether the application of a particular remedy will lead to the restoration of the right or whether the application is capable of compensating for the violated right.

An effective remedy (within the meaning of Article 13 of the Convention for the Protection of Human Rights and Fundamental Freedoms) must ensure the restoration of the violated right and the achievement of the desired result by the person, which is confirmed in numerous opinions of the European Court of Human Rights (ECHR), according to which the remedy must be “effective” both in law and in practice,  particularly in the sense that its use is not complicated by the actions or omissions of the authorities of the relevant state.

In view of this it is, at first glance, unclear what the problem is, since it seems that the only solution fully acceptable to a person whose rights have been violated as a result of a refusal to issue an UPDCRS is to obtain an UPDCRS.

However, here one of the most complex, ambiguous and controversial issues of administrative proceedings arises in all its glory – the discretionary powers of the public authority and the limits of interference with their exercise by an administrative court.

The concept of discretionary powers is defined in the Recommendation of the Committee of Ministers of the Council of Europe No. R (80)2 dated 11 March 1980, according to which discretionary powers are those powers which an administrative authority, in making a decision, may exercise with a certain margin of appreciation, i.e. when such an authority may choose from several legally admissible solutions the one it considers best in the circumstances.

However, at the national legislative level, the concept of “discretionary powers” on the subject of power is absent.

In view of this, court practice has formed a position on the essence of discretionary powers, which should be understood as such powers when, within the limits determined by law, an administrative body has the opportunity to act independently (at its own discretion) within the law, apply the provisions of the law and perform specific actions (or action) among others, each of which is individually relatively correct (legal). In other words, discretionary is the power of a public authority to choose in a particular situation between alternatives, each of which is lawful (to choose one of several options for a particular lawful decision).

According to current legislation, the UPDCRS are provided by the authorised urban planning and architecture authorities on the basis of urban planning documentation at the local level free of charge upon application of the customer, which shall be accompanied by the documents specified in part 3 of Article 29 of the Law of Ukraine “On Regulation of Urban Development” (hereinafter – Law No. 3038-VI). Upon consideration of the application, the authority must decide to either grant or refuse to grant the UPDCRS, stating the specific reason for such refusal.

The granting of the UPDCRS is the exclusive authority of such bodies, which, however, is not always exercised properly or is generally abused.

It should be noted that in recent years there have been few cases where the authorities have failed to make a decision on an application for the UPDCRS or have accepted it in a form not provided for by current legislation.

As a rule, appeals are submitted against decisions to refuse to grant the UPDCRS to the court on various formal grounds, the most common of which are non-compliance of the development intentions with the requirements of urban planning documentation at the local level and failure to submit the necessary documents.

An exclusive list of grounds for refusal to grant the UPDCRS is provided in part 4 of Article 29 of Law No. 3038-VI and is not subject to an extended interpretation. However, this in no way prevents urban planning and architecture authorities, given their exclusive competence in this area, from interpreting these grounds in a very “creative” and subjective manner, which in turn leads to judicial appeals against their decisions to refuse to grant the UPDCRS.

There is no doubt that the court’s recognition of an unreasonable or unjustified refusal to grant the UPDCRS as unlawful and its cancellation (as an individual act) is logical and fully complies with the provisions of Part 1 of Article 5 of the Code of Administrative Procedure of Ukraine (CAPU), which defines the methods of judicial protection. At the same time, such a court decision does not in any way solve the problem of obtaining the UPDCRS and, accordingly, does not provide effective protection of the applicant’s rights violated by the refusal to grant the UPDCRS. This prompted the plaintiffs, based on their own understanding and interpretation of the essence and content of the discretionary powers of urban planning and architecture authorities in this matter, to apply to the court for protection of their rights “in another way” (part 2 of Article 5 of the CAPU), namely by obliging such an authority to reconsider the application for the UPDCRS or issue the UPDCRS.

It is clear that the obligation to reconsider the application for the UPDCRS, regardless of how the court substantiated and motivated the illegality of the decision to refuse to grant the UPDCRS and its cancellation, in no way ensured or guaranteed the plaintiff a positive result, which is obtaining the UPDCRS. After all, the authorised body could again refuse to issue the UPDCRS on the same or other grounds during the reconsideration. Therefore, the most effective remedy was seen as the second option – a claim for an obligation to issue the UPDCRS.

However, for a long time, there was no agreed position on the correctness and possibility of applying these remedies, precisely because of the compliance or non-compliance with the legal requirements for non-interference by the court with the discretionary powers of the authorised bodies or their restriction, as well as the possibility and legality of such interference on the grounds of expediency and necessity of settling the disputed relations.

Disagreements on the application by the cassation court of the provisions of Articles 1, 26, 29 of Law No. 3038-VI in resolving claims for the obligation of the architecture and urban planning authority to issue the plaintiff the UPDCRS, were the subject of research during the consideration by the Grand Chamber of the Supreme Court of Ukraine of case No. 522/6069/14-a, in which extremely important law enforcement conclusions were made on the merits of this issue.

In particular, in its ruling as of 5.06.2019 in this case, the Grand Chamber of the Supreme Court found that discretionary power should be understood as the power that an administrative body, when making a decision, can exercise with a certain degree of discretion. That is, when such a body can choose from several legally admissible solutions the one it considers the best in certain circumstances. In the circumstances of the case at hand, the defendant – the authorised urban planning and architecture authority – had no right to refuse to issue the UPDCRS, as it lacked the statutory grounds for such a refusal and, therefore, did not have the possibility to choose a specific solution from a certain range of options at its own discretion, which, at the same time, indicates that such a defendant has an obligation to issue the UPDCRS. At the same time, the defendant’s exercise of its discretionary powers in providing the UPDCRS will be considered to be precisely the determination of the content of such conditions and restrictions. As a result, a decision to oblige an authorised body to provide the UPDCRS, in the absence of a court’s finding of statutory grounds for refusing to issue them, does not interfere with the defendant’s discretionary powers.

The above conclusion of the Grand Chamber of the Supreme Court has been applied in a number of cases (resolutions of the Supreme Court as of 28.05.2020, in case No. 640/9160/19 as of 11.08.2021, in case No. 826/5804/18 as of 16.05.2023, in case No. 640/4844/22 as of 11.08.2023, in case No. 404/3844/17 as of 23.11.2023, in case No. 640/9995/20 and others).

This legal position is fully consistent with the practice of the European Court of Human Rights. In particular, in the judgment of Olsson v. Sweden as of 24.03.1988, it was found that courts should restore the violated right by obliging the authority to make a specific decision to provide an opportunity if the refusal is found to be unlawful and no other grounds for refusal are seen.

Thus, the exercise of judicial protection by obliging an authorised entity to issue the UPDCRS is not only effective, but also complies with the requirements of the law. However, the sole and decisive factor in assessing the possibility and validity of such a remedy is to establish the fact that the decision to refuse to issue the UPDCRS is unlawful.

At the same time, the illegality of such a decision means that at the time of its adoption, the authorised body did not have the grounds for refusing to issue the UPDCRS specified in part 4 of Article 29 of Law No. 3038-VI.

In other words, it must be established that, firstly, the applicant has submitted all the documents required by part 3 of Article 29 of Law No. 3038-VI, which are necessary for making a decision on issuing the UPDCRS. Secondly, the documents certifying the right of ownership or use of the land plot or the documents certifying the right of ownership of the real estate located on the land plot do not contain false information, and thirdly, the declared intentions of the development comply with the requirements of urban planning documentation at the local level.

If court proceedings establish that there are legitimate and reasonable grounds for the authority to make a decision to refuse to provide the UPDCRS, then the court order to issue the UPDCRS will be an interference with its discretionary powers, which would contradict the principles and requirements of administrative proceedings.

Thus, in the decision dated 19.09.2023 in case No. 580/1756/22, the Supreme Court agreed with the arguments of the Court of Appeal on the need to cancel the decision of the court of first instance to oblige the authorised body to issue the UPDCRS, since the defendant’s justification for refusing to issue them was the non-compliance of the development intentions with the requirements of urban planning documentation at the local level (in terms of the height allowed in the area, provision of parking spaces and compliance with regulatory fire protection), which was confirmed during the court proceedings and, therefore, is a sufficient reason to refuse to issue the UPDCRS.

At the same time, according to court practice, a mere reference to a particular statutory ground for refusing to issue the UPDCRS, without specifying it (which documents were not submitted by the applicant or which documents contain inaccurate information or have legal defects) or without justifying it (what exactly is the inconsistency of intentions with the requirements of urban planning documentation at the local level), cannot in any way indicate the legality of such a refusal.

It would seem that in view of the above, there are sufficient grounds to assert that the court practice on this issue has been established to a certain extent.

At the same time, in some cases, the fact that the public authority did not specify the grounds for refusing to issue the UPDCRS may be relied upon by the court as a basis for a decision not to oblige the public authority to issue the UPDCRS, but only to oblige it to reconsider the application for its issuance.

For example, in the decision dated 06.07.2023 in case No. 160/3882/22, the Supreme Court of Ukraine, having concluded that the refusal to issue the UPDCRS was unmotivated and unreasonable, determined that the proper way to protect the plaintiff’s rights is to oblige the defendant to reconsider the application for the UPDCRS, since the authority did not assess the documents provided by the applicant in an amount sufficient to conclude their legality, sufficient to conclude on their legitimacy, and did not specify a specific ground for refusal with a list of missing documents, and neither did it specify what unreliable data was found in the documents certifying the right to use the land plot.

We believe that such conclusions do not contradict the above-mentioned practice of the Supreme Court, but only indicate, in our opinion, that the plaintiff was not sufficiently “offensive” in substantiating the claim for the defendant’s obligation to issue the UPDCRS and that insufficient attention was paid to the proper proof of the existence of legal grounds for obtaining the UPDCRS.

Thus, the decision of the court of first instance in the aforementioned case No. 160/3882/22, with which the appellate and cassation courts agreed, expressly stated that “the circumstances established in this case are not sufficient to conclude that all the necessary conditions have been met, since the compliance or non-compliance of the development intentions with the requirements of urban planning documentation at the local level can only be established by comparing the developer’s intentions with the urban planning documentation” and that, accordingly, such circumstances are not “sufficient to conclude that all the conditions set out in the law have been met for issuing the UPDCRS “.

Conclusion: In the absence of legitimate and reasonable grounds for the authorised body to refuse to issue the UPDCRS and, provided that the plaintiff meets all the requirements for obtaining them, a claim for an obligation to issue the UPDCRS is an appropriate and effective way to protect the right violated as a result of a decision to refuse to issue the UPDCRS, and a court decision to satisfy such a claim does not interfere with the discretionary powers of the authority.

  • Sergiy Dakhnovskiy

    Partner, JN Legal

JN Legal

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