PRIVY COUNCIL TO DECIDE WHETHER SECURITY FOR COSTS BREACH CONSTITUTIONAL RIGHTS


On 6 October 2021, the Privy Council granted permission to appeal to a case from the Bahamas brought by an NGO, Responsible Development for Abaco (RDA) which Richard Clayton has been working on. The appeal will consider whether orders for security for costs breach constitutional rights.

The Bahamas’ Court of Appeal routinely require huge sums to be paid as security for costs in environmental cases. This prevents judicial review cases from progressing to trial and raises significant issues about RDA’s right of access to the Court.

RDA brought judicial review proceedings to challenge a proposed marina development at Winding Bay on the Island of Abaco. It claimed that the Government had withheld information and failed to carry out any proper consultation before granting permits to development- which deprived local people of their statutory right under the Planning and Subdivision Act 2010 and/or in breach of their legitimate expectations to contribute both to the consultation process and to the Environmental Impact Assessment procedure.

Just 5 days before the judicial review trial was to start, the Government and the Developers made applications for security for costs. The Bahamas Supreme Court ordered RDA to pay security of USS $100,000 to the Government and US$ 150,000 to the developers. The Court of Appeal upheld that order. As a result, RDA’s judicial review case has ground to a halt- so it appealed to the Privy Council.

RDA’s appeal raises several fundamental legal issues.

First, RDA argue that the Court of Appeal failed to recognise RDA’s case was a public interest claim as established by R (Corner House Research) v Secretary of State for Trade and Industry [2005] 1 WLR 2600. In Corner House, the English Court of Appeal pointed out that there was a need for the Court “…towards protecting litigants, who reasonably bring public law proceedings in public interest, from the liability to costs that falls, as a general rule, on an unsuccessful party”. It identified this as a common law development, reflecting case law in Ireland, Canada, and Australia. The Court of Appeal defined the jurisdiction to grant protective costs orders and held that they should be granted where a claim was of general public importance and where the public interest requires that those issues should be resolved.

PCOs are unknown in the Bahamas where the Court of Appeal held that there “is no principle that in public law cases, and in particular cases involving environmental or planning permission issues, that an applicant for judicial review should not be required to give security for costs” (para 31), relying on previous Bahamas decisions, Save Guana Cay Reef Association v The Queen et al (SS Civ App No 70 of 2006) and Bimini Blue Coalition (SS Civ App No 35 of 2014).

Secondly, RDA complain that the Bahamas court misapplied the security for costs provisions by, for example, wrongly holding that RDA was a “nominal plaintiff”.

But RDA’s fundamental complaint is its third ground of appeal, that the Court of Appel was wrong in law to impose a security for costs order which required the Appellant to raise $250,000 within 30 days, which, its own findings could not realistically be achieved. The upshot is that the Court stifled RDA’s claim and breached its common law and constitutional right of access to the Court and to a fair trial contrary to Article 20(8) of the Constitution and/or its right to equal protection of the law contrary to Article 15 of the Constitution. RDA have, therefore, asked the Privy Council to overrule the Court of Appeal decision in Harbour Lobster and Fish v A-G of Bahamas which rejected a claim that excessive stamp duty violated the right to protection under law contrary to Articles 15 of the Bahamas’ Constitution and the right to a fair trial under Article 20(8).

Furthermore, the common law of England applies to the laws of the Bahamas under s 2 of the Declaratory Act. The UK Supreme Court in R((UNISON) v Lord Chancellor [2020] AC 869 decided that there is common law constitutional right of access to justice which is inherent in the rule of law. RDA, therefore, argue that the question of whether the order for security for costs effectively prevents access to justice must be determined by its likely impact on conduct in the real world. It does not disputed that the aim of an order for security for costs is legitimate, but the order against RDA was disproportionate- it cannot be shown that the order was the least intrusive means of achieving those aims.

Fourthly, RDA complaint that the Court of Appeal erroneously held that the Developers, as “affected” parties became entitled to costs (and, therefore, could apply for security for cost. This device meant that the Developers could circumvent the principle in Bolton MBC v Secretary of State for the Environment [1995] 1 WLR 1176. In Bolton the House of Lords decided that a claimant cannot be made to pay two sets of costs where, as here, the interests of the Developers and the Government Respondents were identical.

Unfortunately, as a result of the pandemic, there are now long delays in hearing Privy Council appeals. So we are unlikely to get a judgment from the Privy Council for some time.


October 2021

Richard Clayton QC