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High Court of Justice in Northern Ireland Queen's Bench Division Decisions |
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You are here: BAILII >> Databases >> High Court of Justice in Northern Ireland Queen's Bench Division Decisions >> Rural Integrity (Lisburn 01) Ltd, Re Application for Judicial Review [2019] NIQB 40 (10 April 2019) URL: http://www.bailii.org/nie/cases/NIHC/QB/2019/40.html Cite as: [2019] NIQB 40 |
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Neutral Citation No: [2019] NIQB 40
Judgment: approved by the Court for handing down (subject to editorial corrections)* |
Ref: McC10936
Delivered: 10/04/2019 WITH APPENDICES |
IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND
________
QUEEN’S BENCH DIVISION (JUDICIAL REVIEW)
________
IN THE MATTER OF AN APPLICATION BY RURAL INTEGRITY (LISBURN 01) LIMITED FOR JUDICIAL REVIEW
-v-
PLANNING APPEALS COMMISSION
________
PROTECTED COSTS AND SECURITY FOR COSTS
MCCLOSKEY J
[1] By its Order dated 09 March 2019, distributed electronically in the wake of an inter – partes hearing, the court determined the Applicant’s application for a protective costs order and the Respondent’s application for security for costs as follows:
(a) In the event of the Applicant having to pay costs, the amount recoverable will not exceed £10,000.
(b) The Applicant will make security for the Respondent’s legal costs and outlays in the same amount, ie £10,000, including VAT, and shall do so in accordance with the applicable procedural requirements and mechanisms by 19 March 2019 .
Costs were reserved. This is the reasoned judgment of the court.
[2] The Applicant is a registered limited company with a share capital of £100 and a single director, one Gordon Duff, who represents this litigant, together with other comparable and related limited companies, in a total of 33 judicial review challenges filed with the court during a six month period beginning on 05 March 2018 and ending on 17 September 2018. There has been a multiplicity of challenges, listings and orders in the court’s unrelenting attempts to devise fair, proportionate, practical and efficient case management mechanisms and arrangements for this unprecedented group of cases.
[3] The Respondent in these proceedings is the Planning Appeals Commission for Northern Ireland (the “PAC”). The Applicant challenges the decision of the PAC dated 11 December 2017 allowing an appeal against a refusal of planning permission and, thereby, authorising the development of two dwellings and detached garages at an “infill site” at 50/52 Ballee Road West, Ballymena. The successful planning applicant has been represented by solicitor and counsel in these proceedings.
[4] The application for leave to apply for judicial review proceeded inter-partes on 07 June 2018, before Sir Ronald Weatherup. The judge reserved his decision and, the following day, promulgated an oral ruling whereby leave to apply for judicial review was granted.
[5] The available evidence includes a full transcript of the judge’s leave decision. It is abundantly clear from this that leave was granted subject to no restrictions or conditions applicable to either the Applicant or the PAC. The court rejects any argument to the contrary.
[6] By a summons, with supporting affidavit, issued on 15 October 2018, the PAC applied to the court for an order compelling the Applicant to make security for the costs of the PAC under Order 23 Rule 1 and Order 53 Rule 8 of the Rules of the Court of Judicature. Attached to the summons was a schedule indicating that the PAC’s estimated costs of defending these proceedings total £36,000 plus VAT. The accompanying affidavit contains particulars of the heavy case management which these proceedings have entailed to date. This affidavit posits the substantially smaller sum of £20,000 plus VAT in respect of legal costs.
[7] All of the registered companies in question are, in non-technical legal terms, established, owned, managed and operated by Mr Duff. The only expenditure which they have incurred is the court fees involved in initiating each of the judicial review applications and any subsequent ancillary or incidental fees. Mr Duff asserts that this is effected by the mechanism of directors’ loans to the companies, of which there is no supporting evidence. He estimates that each judicial review case generates fees of this genre of some £260/£270. In two of the 33 cases Mr Duff instructed solicitors to act on behalf of the relevant applicant company. The court’s understanding of the evidence is that this retainer has been terminated.
[8] There is a second interlocutory application requiring adjudication. By this application the Applicant seeks a protective costs order under the (in shorthand) Aarhus Convention Regulations. It would appear from the pertinent affidavit sworn by Mr Duff (21 May 2018) that the order sought was initially one whereby any legal costs recoverable from the Applicant would not exceed £10,000 plus VAT. The court construes Mr Duff’s more recent stance, however, to be that a protective costs order should be made conferring on the Applicant an outright costs indemnity or exemption or, at worst, limiting its costs exposure to its share capital of £100. See regulations 3(3) and 6 of the Aarhus Convention Regulations.
[9] The evidence/submissions emanating from Mr Duff include assertions that (a) he is owed some £5,000 by the companies, representing court costs incurred in the various judicial reviews and (b) he estimates that his total costs in these proceedings will be of the order of £5,000/£6,000, a sum which he will seek to recover from the PAC in the event of the legal challenge succeeding. There is no evidence whatsoever of Mr Duff’s personal means or resources. Nor is there any evidence of the Applicant, the other companies or the collective legal proceedings being financed, partly or otherwise, by sources other than Mr Duff.
[10] The topic of security for costs is governed by Order 23 of the Rules of the Court of Judicature. Rule 1 provides :
“1. - (1) Where, on the application of a defendant to an action or other proceeding in the High Court, it appears to the Court-
(a) subject to paragraph (4), that the plaintiff is ordinarily resident out of the jurisdiction, or
(b) that the plaintiff (not being a plaintiff who is suing in a representative capacity) is a nominal plaintiff who is suing for the benefit of some other person and that there is reason to believe that he will be unable to pay the costs of the defendant if ordered to do so, or,
(c) subject to paragraph (2), that the plaintiff's address is not stated in the writ or other originating process or is incorrectly stated therein, or
(d) that the plaintiff has changed his address during the course of the proceedings with a view to evading the consequences of the litigation, or
(e) that the plaintiff is a company or other body (whether incorporated inside or outside Northern Ireland) and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so,
then if, having regard to all the circumstances of the case, the Court thinks it just to do so, it may order the plaintiff to give such security for the defendant's costs of the action or other proceeding as it thinks just.
(2) The Court shall not require a plaintiff to give security by reason only of paragraph (1)(c) if he satisfies the Court that the failure to state his address or the mis-statement thereof was made innocently and without intention to deceive.
(3) The references in the foregoing paragraphs to a plaintiff and a defendant shall be construed as references to the person (howsoever described on the record) who is in the position of plaintiff or defendant, as the case may be, in the proceeding in question, including a proceeding on a counterclaim. ”
By rule 2:
“ Where an order is made requiring any party to give security for costs, the security shall be given in such manner, at such times and on such terms (if any) as the Court may direct. ”
The Order 23 regime applies to judicial review proceedings by virtue of Order 53, Rule 8:
“8. - (1) Unless the Court otherwise directs, any interlocutory application in proceedings on an application for judicial review may be made to a judge in chambers.
In this paragraph "interlocutory application" includes an application for an order under Order 24 or Order 26 or Order 38 rule 2(3), or for an order dismissing the proceedings by consent of the parties.”
[11] Article 674 of the Companies (NI) Order 1986 provides:
“ Where a limited company is Plaintiff in an action or other legal proceeding, the Court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the Defendant’s costs if successful in his defence, require sufficient security to be given for those costs and may stay all proceedings until the security is given. ”
Article 674 is an illustration of the import of Order 23, Rule 3 which provides that the Order is without prejudice to any statutory provision of this nature, a reflection of the supremacy of legislation. It also explains the analysis of Carswell LCJ in Re SOS (NI) Limited [2002] NIJB 252 at [8]:
“ [8] RSC (NI) Ord 59, r 10(5), in accordance with the authority conferred by s 38(1)(h) of the Judicature (Northern Ireland) Act 1978, provides:
'The Court of Appeal may, in special circumstances, order that such security shall be given for the costs of an appeal as may be just.'
It has long been the practice of the Court of Appeal to order that security for costs be furnished if the respondent can show that the appellant, if unsuccessful, would be unable through poverty to pay the costs of the appeal: see, eg, Hall v Snowden, Hubbard & Co [1899] 1 QB 593 at 594 , per AL Smith LJ. The jurisdiction is in this respect wider than that exercised under Ord 23, when impecuniosity alone will not generally suffice to ground an order for security (except in the case of a limited company, which is governed by art 674 of the Companies (Northern Ireland) Order 1986) .”
At the time when Re SOS was decided, Order 23, Rule 1 was confined to paragraphs (a) – (d). Paragraph (e) was added with effect from 12 th October 2009 by SR 2009 No 345. It adopts the terminology of Article 674.
[12] Commenting on the (then) identical equivalent provision in England and Wales, the authors of The Supreme Court Practice 1999 state, at paragraph 23/3/3:
“ Rule 1(1) provides that the court may order security for costs ‘if, having regard to all the circumstances of the case, the Court thinks it just to do so.’ These words have the effect of conferring upon the court a real discretion and indeed the court is bound, by virtue thereof, to consider the circumstances of each case and in the light thereof to determine whether and to what extent or for what amount a Plaintiff (or the Defendant as the case may be) may be ordered to provide security for costs. ”
The commentary continues:
“ A major matter for consideration is the likelihood of the Plaintiff succeeding. That is not to say that every application for security for costs should be made the occasion for a detailed examination of the merits of the case. …
If there is a strong prima facie presumption that the Defendant will fail in his defence to the action, the court may refuse him any security for costs (see per Collins J in Crozat v Brogden [1894] 2 QB 30 at 33) … ”
In a later passage it is stated that the court “ … must take account of the Plaintiff’s prospects of success … ”.
[13] The English statutory equivalent of Article 674 is section 726(1) of the Companies Act 1985. This is in substantially the same terms as its Northern Ireland equivalent. The court is required to have regard to all the circumstances of the case: Sir Lindsay Parkinson v Triplan [1973] QB 609. There is no exhaustive or mechanistic list of relevant factors. These may include the apparent merits of the plaintiff’s case, the timing of the application and whether the application is brought oppressively, for example for the purpose of stifling a meritorious claim. The exercise of this discretion is illustration in Aquila Design v Cornhill Insurance [1988] BCLC 134.
[14] It has also been held that a plaintiff is not required to demonstrate with certainty that it will be unable to pursue its claim if ordered to make security for costs, a probability sufficing: Trident International Freight Services v Manchester Ship Canal Company [1990] BCLC 263. Where this is demonstrated, it will rank as a factor to be reckoned, to be allocated such weight as the court considers appropriate in the particular litigation context.
[15] An additional noteworthy feature of the decision in Trident is the Court of Appeal’s deprecation of “ the elaborate and unnecessary investigation of the plaintiff’s prospects of success which took place in the court below “, adopting and approving the similar condemnation of the learned Vice – Chancellor in Porzelack v Porlezack [1987] 1 WLR 420, at 423.
[16] I take into account the citizen’s right of access to a court, which has been recognised as constitutional in stature: R v Lord Chancellor, ex parte Witham [1998] QB 575, at 586 especially, per Laws LJ. This right is also enshrined in Article 6 ECHR and the court is subject to the duty imposed by section 6 of the Human Rights Act 1998 not to act incompatibly with a protected Convention right. This right is not, however, absolute. It may be the subject of proportionate conditions and limitations, such as limitation periods and the payment of court fees.
[17] This is illustrated in R (Unison) v Lord Chancellor [2015] EWCA Civ 935, which involved a challenge to subordinate legislation introducing fees in employment tribunals for the first time. I have also been assisted by the careful examination of the Article 6 considerations by Girvan J in McAteer v Lismore (No 2) [2000] 477 at 481 – 483, which I gratefully adopt. There, as in the present case, the matrix was one in which any order for costs against the plaintiff would be of no value. Security for costs in the amount of £7,500 was ordered
[18] This unprecedented cohort of interrelated judicial review cases has generated a multiplicity of case management and interim hearings and associated Orders. I have made clear, on more than one occasion, that it would be of enormous benefit if Mr Duff were to identify either a single case or a small number of cases the determination whereof could (not would) resolve other cases in the group. I also made clear that a positive response to this invitation would be a factor to which the court would probably attribute considerable weight in determining the Respondent’s security for costs application. I stated that the court would view this as a factor of substance weighing against an order requiring the Applicant to make security for costs. Initially Mr Duff appeared to respond positively to this suggestion. However, this quickly faded, leaving an ocean of uncertainty for multiple respondents and successful planning applicants in consequence.. In determining the present applications I consider it legitimate to take this consideration into account.
[19] Since the determination of these applications involves the exercise of powers enshrined in the Rules of the Court of Judicature, the court is duty bound to seek to give effect to the overriding objective, per Order 1, Rule 1A(3). Thus I must seek inter alia to manage both the present case and all of the others belonging to the cohort, in excess of 30, in a manner proportionate to the importance of the case and the financial position of each party, to deal with these cases expeditiously and fairly and to allocate to them an appropriate share of the court’s finite resources, while taking into account the demands of other cases in the court system. It has long been recognised that the exercise of case management powers entails a significant measure of discretion on the part of the court: see Prince Abdulaziz v Apex Global Management [2014] UKSC 64, at [13] per Lord Neuberger, approving the statement of Lewison LJ in Broughton v Kop Football [2012] EWCA Civ 1743 at [51]:
“ Case management decisions are discretionary decisions. They often involve an attempt to find the least worst solution where parties have diametrically opposed interests. The discretion involved is entrusted to the first instance judge. An appellate court does not exercise the discretion for itself. It can interfere with the exercise of the discretion by a first instance judge where he has misdirected himself in law, has failed to take relevant factors into account, has taken into account irrelevant factors or has come to a decision that is plainly wrong in the sense of being outside the generous ambit where reasonable decision makers may disagree. So the question is not whether we would have made the same decisions as the judge. The question is whether the judge’s decision was wrong in the sense that I have explained. ”
[20] At the instigation of Mr Duff several of the earlier hearings have been transcribed. Reference to the following provides enlightened insight into how the present case and the other members of the group have evolved:
(a) Appendix 1 : Chronology of material dates and events.
(b) Appendix 2 : Transcript of the decision of the deputy judge granting leave to apply for judicial review on 07 June 2018.
(c) Appendix 3 : Transcript of the case management hearing conducted by me on 18 December 2018.
(d) Appendix 4 : This court’s ex tempore ruling at the conclusion of the aforementioned hearing.
[21] The leave decision ( Appendix 2 ) is revealing. As appears from [12] of the transcript, the judge clearly envisaged that only one of the 30 plus cases would have to proceed in order to determine the planning policy issues raised. Mr Duff did not demur. Mr Duff’s resistance to a “lead case/s” approach did not emerge until the case management hearing on 18 December 2018. In this context I refer to the (unedited) transcript ( Appendix 3 ) and the court’s ensuing ruling ( Appendix 4 ).
[22] I must also take into account that the Applicant has been granted leave to apply for judicial review. While this is a relevant factor, what it actually means is that the modest threshold engaged, namely the demonstrating of an arguable case, betokening no assurance of ultimate success, was surmounted.
[23] I further take into account the character of this litigation. These are public law proceedings, involving no lis inter-partes and having a clear public interest element. In weighing this factor I accept that in pursuing this case – and all of the others – Mr Duff seeks no gain or benefit either for the Applicant or personal to him. These are genuine public interest proceedings.
[24] I turn to consider the protective costs rules and principles. These have their origins in an instrument of international law, the Convention on Access to Information, public participation in decision making and access to justice in environmental matters (the “ Aarhus Convention ”). The domestic instrument in this jurisdiction is the Costs Protection (Aarhus Convention) Regulations (NI) 2013 (the “ Aarhus Regulations ”) as amended by the Costs Protection (Aarhus Convention) (Amendment) Regulations (NI) 2017. The Aarhus Convention is, per its recitals, designed to advance the causes of “ the need to protect, preserve and improve the state of the environment and to ensure sustainable and environmentally sound development ” and “ adequate protection of the environment ”. Its self-proclaimed objective is, per Article 1:
“ … the protection of the right of every person of present and future generations to live in an environment adequate to his or her health and wellbeing. ”
The three so-called “pillars” of the Convention are identifiable in its title ( supra ). The third of these pillars, namely access to justice in environmental matters, is engaged in every protective costs application in legal proceedings concerning environmental protection and preservation issues.
[25] The Aarhus Convention regime has the following main elements:
(a) First, Article 3(8):
“ Each Party shall ensure that persons exercising their rights in conformity with the provisions of this Convention shall not be penalised, persecuted or harassed in any way for their involvement. This provision shall not affect the powers of national courts to award reasonable costs in judicial proceedings. ”
[My emphasis.]
(b) Article 9(2) :
“ Each Party shall, within the framework of its national legislation, ensure that members of the public concerned
(a) Having a sufficient interest or, alternatively,
(b) Maintaining impairment of a right, where the administrative procedural law of a Party requires this as a pre-condition,
have access to a review procedure before a court of law and/or another independent and impartial body established by law, to challenge the substantive and procedural legality of any decision, act or omission subject to the provisions of Article 6. ”
(c) Article 9(4) :
“ … the procedures referred to … above shall provide adequate and effective remedies, including injunctive relief as appropriate and be fair, equitable, timely and not prohibitively expensive .”
(d) Article 6: this must be considered in conjunction with Annexe 1 in order to identify the “ activities ” giving rise to a decision, act or omission falling within Article 9(2). States Parties have the option of extending the Annexe 1 list of activities. Annexe 1 contains a list of 19 particularised activities, followed by:
“ 20. Any activity not covered by paragraphs 1 – 19 above where public participation is provided for under an environmental impact assessment procedure in accordance with national legislation. ”
[26] The regime established by the corresponding domestic law measure, the Aarhus Regulations, establishes three financial caps in “ an Aarhus Convention case ”. Per Regulation 3(2) :
“ Subject to paragraph (4), in an Aarhus Convention case, the court shall order that any costs recoverable from an applicant shall not exceed £5,000 where the applicant is an individual and £10,000 where the applicant is a legal person or an individual applying in the name of a legal entity or incorporated association. ”
As regards the respondent’s costs, Regulation 3(3) provides:
“ In an Aarhus Convention case, the court shall order that the costs recoverable from a respondent shall not exceed £35,000 subject to regulation 4(3). ”
Clearly these two instruments of international and municipal law fall to be considered together.
[27] In Edwards v Environment Agency (No 2) [2013] UKSC 78, the claimant, via judicial review proceedings, challenged the Agency’s decision permitting a cement works to alter its authorised fuel from coal and petroleum coke to shredded tyres. The case was dismissed. An appeal ensued and another claimant was joined, giving rise to a “costs capping” order of £2,000 which, following dismissal of the appeal, was awarded. The second claimant appealed, unsuccessfully, to the Supreme Court which made cost orders in favour of the two respondents, whose bills of costs totalled some £90,000.
[28] The Supreme Court made a reference to the CJEU seeking guidance on the Aarhus Convention phraseology of “ not prohibitively expensive ”. The CJEU decided: the test is not purely subjective; the cost of proceedings must not exceed the financial resources of the person concerned nor appear to be objectively unreasonable; the court could take into account the merits of the case, the importance of what is at stake for the claimant and for the protection of the environment, the complexity of the relevant law and procedure and the potentially frivolous nature of the claim at its various stages; where the claimant has not been actually deterred from carrying on the proceedings, this is not determinative per se ; and, finally, the same criteria are to be applied both at first instance and on appeal.
[29] The Supreme Court, in its final disposal of the case following the CJEU’s preliminary ruling, noted that the Luxembourg Court had not given exhaustive guidance as to how to assess what is objectively unreasonable. By this stage the two respondents had agreed to limit their claim for costs to £25,000, which equated to the amount of security paid by the second claimant as a condition for bringing the appeal. The Supreme Court was satisfied that a costs order in this amount would be subjectively reasonable. It considered the more difficult question to be that of whether there should be some objectively determined lower limit. Giving effect to the various factors identified by the CJEU ( supra ), the court considered it impossible to characterise the sum of £25,000, viewed objectively, as unreasonably high, either on its own or in conjunction with the £2,000 awarded in the Court of Appeal.
[30] Notably the CJEU, in its judgment, reiterated what it had previously held in Case C-427/07 ( Commission v Ireland ) that the “ prohibitively expensive [provisionof the Aarhus Convention] does not prevent the national courts from making an order for costs ”: see [25]. The court added at [35]:
“ Where a national court is called upon to make an order for costs against a member of the public who is an unsuccessful claimant in an environmental dispute or, more generally, where it is required – as courts in the United Kingdom may be – to state its views, at an earlier stage of the proceedings, on a possible capping of the costs for which the unsuccessful party may be liable, it must be satisfy itself that that requirement has been complied with, taking into account both the interests of the person wishing to defend his rights and the public interest in the protection of the environment. ”
In the following passages, the CJEU acknowledged, in substance, the latitude available to national legislatures and the significance of “ all the relevant provisions of national law ”: see [38]. At [40] the court made clear that factors other than “ the financial situation of the person concerned ” can properly be reckoned, repeating this at [46].
[31] The acutely one sided and unbalanced nature of the accommodation which the Applicant/Mr Duff is seeking from the court is unmistakable. It has three central components: his contention that the court should not order security for costs in any amount against the Applicant, his quest to secure a protective costs order for the Applicant restricting its potential costs exposure to £100 maximum and his intention to seek to recover some £6,000 from the PAC in the event of the judicial review succeeding. This arrangement, if sanctioned by the court, would result in the PAC being unable to recover any costs if the challenge fails, in a context where its estimated costs are at least £20,000 plus VAT or, alternatively, having to pay some £6,000 costs in the event of the Applicant’s challenge succeeding.
[32] It falls to the court to strike a balance which is harmonious with the applicable legal rules and principles and the principle of proportionality. In so doing the court takes into account all of the facts and factors noted at paragraphs 2 – 4, 6 – 7, 9, 18 – 19 21 – 23 and 31 above.
[33] The importance of environmental protection is acknowledged by the court, unreservedly so. However it is clear from Edwards that the court can properly consider the nature and extent of any possible environmental detriment arising out of the authorised development. In this case, the impugned grant of planning permission authorises the construction of a dwelling house and garage on a site which is bounded on each side by existing dwellings, in a rural area. The site consists of 0.308 hectares. If the development proceeds there will of course be resulting environmental damage and disturbance. However, this development contrasts starkly with the list of “ activities ” in Annex 1 to the Aarhus Convention (mineral, oil and gas refineries, the production and processing of metals, waste management, waste water treatment plants, industrial plants et al ). I consider that the imperative of environmental protection must be evaluated according to the specific context. The public interest, which belongs to a notional spectrum of some breadth, is to be calibrated accordingly.
[34] The public interest is, moreover, multi-faceted. It is not confined to protection of the environment and the prohibition of inappropriate land use. Rather it extends to encompass inter alia the factor of taxpayers’ contributions and the associated funding of public authorities such as the PAC. It further encompasses the consideration that in any form of litigation one party should not have an unfair and/or unreasonable advantage at the expense – financial or otherwise – of another. The court recognises that one effect of the policy underlying the Aarhus Convention Regulations is that, in pursuit of the public interest of environmental protection, the notional “playing field” may be uneven. It is considered, however, that the kind of acute distortion, or skewing, which the Applicant’s stance demands is not necessarily dictated by this legislative measure and must be balanced by other reasonable access to court mechanisms, which include in appropriate cases a requirement that a limited, but proportionate, payment of security for costs be made.
[35] Furthermore, It seems undeniable that Mr Duff has established certain registered companies, including the Applicant in these proceedings, with a view to engaging in extensive litigation activities, which I have described as of unprecedented volume and, simultaneously, has by this mechanism effectively protected the promoters and operators of the companies from personal costs liability. The assets and resources of every limited company are confined to what its promoters, owners and investors are prepared to provide. Mr Duff has made a series of conscious decisions in this regard. The court must be alert to any possible manipulation of its process in every case. This clearly exposed costs avoidance mechanism is not harmonious with the proper invocation of the court’s process and is a factor of significance which the court must reckon.
Conclusion
[36] Giving effect to all of the foregoing, I have determined to exercise the discretion of the court in the following manner:
(a) In the event of the Applicant having to pay costs, the amount recoverable will not exceed £10,000 including VAT.
(b) The Applicant will make security for the Respondent’s legal costs and outlays in the same amount, ie £10,000 including VAT, and shall do so in accordance with the applicable procedural requirements and mechanisms by 19 March 2019 .
The costs of these applications are reserved.
