Kialka v Home Office
| Jurisdiction | England & Wales |
| Judge | Sir Brian Leveson,Mr Justice Holroyde |
| Judgment Date | 10 November 2015 |
| Neutral Citation | [2015] EWHC 4143 (Admin) |
| Date | 10 November 2015 |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/2137/2015 |
[2015] EWHC 4143 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Royal Courts of Justice
Strand
London WC2A 2LL
Sir Brian Leveson
(President of the Queen's Bench Division)
Mr Justice Holroyde
CO/2137/2015
Dr A van Dellen (instructed by Direct Access) appeared on behalf of the Appellant
Mr A Bird (instructed by Home Office) appeared on behalf of the Respondent
(Approved by the Court)
On 2 May 2014 before the Channel Magistrates' Court sitting at Dover an order was made whereby the sum of £25,980 in sterling and 14,000 in Euros seized from the Appellant, Mr Kialka, was ordered forfeit pursuant to the provisions of the Proceeds of Crime Act 2002 ("the 2002 Act").
The Appellant appealed to the Crown Court at Canterbury where, after a further three day hearing, the appeal was allowed. The court accepted that the money was not proved to be recoverable under the Act. The Appellant then sought the costs of defending the proceedings in the Magistrates' Court and the Crown Court. The Crown Court determined that no order for costs should be made. He now appeals by way of case stated against that decision.
The facts identified in the case were shortly stated. On 4 October 2011 at Dover harbour, the Appellant was being driven in his motor car. When stopped by officers from the Home Office, it was found that he had the cash to which I have referred in the car. The money was seized as recoverable property under sections 241 and 242 of the 2002 Act. It was thereafter contended that the money was being laundered from the UK and was recoverable and the purpose of the journey was to remove it from the United Kingdom.
The circumstances of its recovery, the reasons for the decision of the magistrates and the detail of the evidence are not contained within the case stated. What is, however, identified in the case was that the Home Office had failed to identify anything at all about where the money laundering had occurred. It had not been suggested that it was undeclared earned income, protection money, false accounting or other dishonest source. There was no specific criminality identified and that as a consequence, following the decision in Wiese v UKBA [2012] EWHC 2549, the lack of specificity rendered the application to seize the money fatal.
It was in those circumstances that the appeal was allowed. The money and interest was ordered to be returned and the merits of the case were thus decided.
In relation to the application for costs, the court was referred to a decision, R (Perinpanathan) v City of Westminster and Another [2010] 1 WLR 1508, [2010] EWCA Civ 40, setting out the approach to the award of costs payable by a public authority in cases where an Appellant had successfully recovered cash seized under the 2002 Act. To that decision, I shall return.
In the stated case, the following facts were found:
"(A) The starting point and default position on costs is that no order be made.
(B) There is no unreasonable behaviour by the Respondent. In particular, there was not an offer for them to reject or accept.
(C) The Appellant did not suffer exceptional hardship as he did better with his betting after 2011. Both before and after being stopped at Dover on 2nd October 2011, the Appellant had gambled. He had both made and lost significant sums in gambling.
(D) In terms of proportionality, the amount of costs is very substantially less than the money recovered. The total amount of the Appellant's costs was £28,000 to £29,000 and the Appellant recovered £42,000.
(E) The court will consider the costs issue differently in circumstances that do not arise…"
In this court Dr van Dellen argues that the Crown Court did not comply with its duty and did not reach a legally permissible conclusion, taking into account the facts which they found. In particular, Dr van Dellen attacked the basis upon which the Crown Court assessed the issue of costs and the proportionality of the order that had been made.
First, he submitted that although the court had proceeded on the premise of costs as identified by section 64 of the Magistrates' Courts Act 1980, as indeed had been argued before the court, there was a difference between that provision, "such order… as it thinks just and reasonable", and the provisions in relation to costs in the Crown Court Rules 1982, "such order as it thinks just", and that in section 299 sub-section (3) of the 2002 Act, "any order it thinks appropriate". Dr van Dellen submitted that the words "and reasonable" added to and changed the nature of the test and therefore, it was not appropriate to proceed on the premise of the Magistrates' Court legislation.
For my part, I believe the semantic difference between the language of the three provisions does not alter the meaning of the test. I consider myself supported in that view by reference to observations in Perinpanathan by Stanley Burnton LJ (who at paragraph 40 spoke of the application of the costs regime in licencing proceedings as being to be endorsed for Magistrates' and Crown Court proceedings) and Lord Neuberger of Abbotsbury, MR, in the same case who referred at paragraph 62 to the discretion as to costs available to magistrates in gaming legislation being "similar" to that contained within rule 12(2) of the Crown Court Rules. He also equated the decision on costs in relation to licencing problems.
What then is the appropriate approach? It is set out by Stanley Burnton LJ in Perinpanathan at paragraph 40 in these terms:
"(1) As a result of the decision of the Court of Appeal in Baxendale-Walker, the principle in the City of Bradford case is binding on this Court. Quite apart from authority, however, for the reasons given by Lord Bingham LCJ I would respectfully endorse its application in licensing proceedings in the magistrates' court and the Crown Court…
(5) Where the principle applies, and the party opposing the order sought by the public authority has been successful, in relation to costs the starting point and default position is that no order should be made.
(6) A successful private party to proceedings to which the principle applies may nonetheless be awarded all or part of his costs if the conduct of the public authority in question justifies it.
(7) Other facts relevant to the exercise of the discretion conferred by the applicable procedural rules may also justify an order for costs. It would not be sensible to try exhaustively to define such matters, and I do not propose to do so."
Stanley Burnton LJ went on to observe that financial prejudice to the private party may justify an order for costs, but that Lord Bingham, CJ, had in mind a case in which the successful private party would suffer "substantial hardship if no order for costs was made in his favour".
The principle which is identified in this decision is explained by Lord Neuberger at paragraph 76 in these terms:
"In a case where regulatory or disciplinary bodies, or the police, carrying out regulatory functions, have acted reasonably in opposing the grant of relief, or in pursuing a claim, it seems appropriate that there should not be a presumption that they should pay the other party's costs. It is not as if the other party would have no right to recover costs in such a case: as Lord Bingham made clear, one must take into account "all the relevant facts and circumstances of the case", and in particular "the financial prejudice to the particular complainant… if the order for costs is not made in his favour". However, it has not been suggested by either party to this appeal that weight should be given in this case to any points other than those I have discussed."
In that case, some £9,000 by way of costs was expended in recovering from forfeiture the sum of £150,000 which had been seized. Dr van Dellen contrasts that position with the contention that the Appellant has expended £28,000 to £29,000 in seeking to recover £42,000 in costs.
Speaking for myself, I can only express surprise that the costs incurred by the Appellant in connection with this litigation have been as substantial as that, but the principle to which Dr van Dellen points is the need for some proportionality such that it is not reasonable, he contends, or proportionate to generate a result for this litigation that the Appellant has had to spend some £28,000 to £29,000 seeking to recover what is and was his property.
The answer to that question is to be found in the case itself. The Recorder found as a fact that there was no unreasonable behaviour by the Respondent. It was also found as a fact that the Appellant did not suffer exceptional hardship. He dealt with the question of proportionality by observing that the amount of costs was very substantially less than the money recovered. Dr van Dellen quibbles with the word "very" in that sentence, but at the end of the day that is the finding of the judge.
The question is: can this challenge reach an appropriate level whereby this court can condemn it as legally impermissible (on Dr van Dellen's phrase) or, as Mr Bird would contend was the necessary test, Wednesbury unreasonable?
In our judgment, the court did no more than reach a finding of fact on material open to it. There is no material in the case stated to undermine the facts or conclusions expressed by the court and there is no basis from that material upon which the court could substitute a different conclusion.
In my judgment, the decision of the court was open to it for the reasons that it gave and I, for my part, would dismiss this...
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