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Ordering Security for Costs Against Environmental Protesters

Privy Council
Published on February 20, 2023 by The Times

Responsible Development for Abaco Ltd v Christie and others
Before Lord Sales, Lord Hamblen, Lord Leggatt, Lady Rose and Lord Richards
[2023] UKPC 2
Judgment January 31, 2023

A court had been entitled to order a judicial review claimant, who was challenging a proposed tourist development on environmental grounds, to pay security for costs to government officials responsible for taking the development decision, but it should not have ordered security for costs to be paid to the developers, as they had not shown that there was a separate issue on which they were entitled to be heard, or that they had an interest which required separate representation.

The Privy Council so held in allowing in part an appeal by the claimant, Responsible Development for Abaco Ltd (RDA), against the upholding by the Court of Appeal of the Commonwealth of The Bahamas (Justices of Appeal Isaacs, Jones and Barnett) on August 14, 2019, of the decision of Justice Hanna-Weekes on November 22, 2017, granting security for costs in relation to its claim for judicial review in the sum of $100,000 to the defendants, various executive or ministerial persons concerned with the grant of permissions and approvals required to proceed with a marina development in Abaco (the government respondents) and in the sum of $150,000 to the owners of the Abaco Club resort (the developers).

Richard Clayton KCFrederick Smith KCRuth JordanRowan Pennington-BentonThomas Elias and Roderick Dawson Malone for RDA; Aidan Casey KC, for the government respondents; Peter Knox KCOscar Johnson KCRobert Strang and Tara Archer-Glasgow for the developers. The Open Society Justice Initiative and the Environmental Law Alliance Worldwide, intervened by way of written submissions only.

LORD SALES and LORD HAMBLEN (with whom Lord Leggatt, Lady Rose and Lord Richards agreed) said that the appeal concerned the proper approach to applications for security for costs by defendants to public interest environmental judicial review claims, including by developers joined as additional defendants.

The claim related to the proposed development of marina facilities in Abaco in the Bahamas. RDA was a Bahamian company whose objective was ensuring that developments in Abaco were sustainable, environmentally sound, ecologically responsible, and took account of the legitimate interests of residents, homeowners and visitors. Its claim challenged the government respondents’ alleged decision to withhold information and alleged failure to carry out a proper consultation before taking decisions in relation to the development.

On the appeal, RDA argued, first, that the orders for security for costs stifled its claim and thereby breached its right of access to the court. However, on the available evidence the Court of Appeal had been both entitled and correct to find that RDA’s claim would not be stifled by the orders. Indeed, RDA did not assert in its evidence that its claim would be stifled, only that the government respondents and the developers hoped that it would be.

In any event, if RDA wished to avoid an order for security for costs being made against it, then the burden was on it to show that it had no realistic prospect of raising funds from its supporters to proceed and that its claim would therefore be stifled.

Although it appeared that RDA’s supporters included local residents and others who had an interest to oppose the development and who might be able to put RDA in funds to provide security for costs so as to enable it to proceed with the claim, RDA provided no information about them, their interest in the proceedings and their means, such as could support a conclusion that the claim would be stifled. RDA had failed to discharge the burden on it of showing that its claim would be stifled.

As to RDA’s further submission that there was a troubling trend in the case law of the local courts to order that security for costs should be provided in circumstances where that had had the effect that valid claims for judicial review in the environmental field were stifled, the authorities did not bear out that complaint.

The mere fact that in some cases, after an order for security for costs was made, a claim was not pursued did not show that the courts failed to apply the proper approach. A party might have various reasons for deciding not to proceed with a claim, including simply that it did not wish to run the risk of an adverse costs order even though it could afford to pay it.

RDA submitted, second, that the Court of Appeal erred by requiring security for costs be provided notwithstanding that the judicial review challenge was a public interest claim and raised issues of general public importance which the public interest required to be resolved.

However, in circumstances where RDA was a company set up to pursue claims such as the present one in the interests of local residents and supporters, and where it implicitly maintained at least in part that it had standing to sue on the basis of their interests, RDA could not show that the claim was a public interest challenge in the relevant sense. RDA existed to promote private interests, at least in part, and its own interest could not realistically be separated out from those of its supporters.

Further, RDA’s lack of candour in its evidence about its supporters also led to the inference that its interests could not be regarded as distinct from theirs. In all the circumstances, it was just that an order for security for the government respondents’ costs should be made.

Finally, RDA submitted that the developers were not entitled to security for costs when their interests and those of the government respondents were identical.

In order to justify an order for security for costs being made in their favour, it was incumbent on the developers to show that a costs order in their favour was likely to be made if the judicial review claim was ultimately dismissed. That meant establishing that there was a separate issue on which they were entitled to be heard, which would not be covered by the government respondents, or that they had an interest that required separate representation, and that that was likely to justify an order for a second set of costs.

The court was being asked to pre-judge the matter of costs at an early stage of the proceedings. That inevitably involved a degree of speculation and made it difficult for the developers to establish the necessary likelihood of a costs order in their favour. An order requiring a claimant to provide security for a developer’s costs (that was, a second set of costs) risked deterring the claimant from proceeding with its claim and hence was an impediment to gaining access to the court.

A court should only be willing to introduce that additional impediment for a properly arguable claim if it was confident that it would be just and appropriate to make an award of costs in the developer’s favour at the end of the proceedings, if the claim failed. The test was more demanding than that applicable in relation to an order for security for the costs of the public authority which was the primary defendant.

The developers were unable at the present stage to identify a relevant separate interest. All that they could say was that such an interest might emerge during the course of the proceedings. That was not a sufficient basis for an order for security being made at the present stage.

The case involved a relatively straightforward judicial review claim, directed at the government respondents alone, in which RDA relied on well-established principles and there was unlikely to be much which the developers could usefully add either by way of submissions or evidence.

If RDA was successful in its judicial review and the government respondents had to carry out a further consultation exercise then, in so far as the developers’ were dissatisfied with the conduct of the consultation exercise, they would be entitled to seek to bring their own judicial review challenge.

The developers were essentially seeking security from RDA for the costs of protecting their position should it prove necessary to do so, even though the defendants if the developers did need to take action would be the government respondents. So in effect the developers were seeking a pre-emptive insurance policy against that possibility, the cost to be borne by the wrong person.

Accordingly, the order for security of costs in relation to the developers should be set aside.

Solicitors: Sheridans; Charles Russell Speechlys LLP; Sinclair Gibson LLP.

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