QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
MR JUSTICE NICOL
| THE QUEEN ON THE APPLICATION OF
|- and -
|CITY OF WESTMINSTER MAGISTRATES' COURT (Sitting at West London Magistrates' Court)
|- and -
|MR HISHAM AL RAYES
MR JINESH PATEL
|First and Second Interested Parties
|- and -
|MR PETER GRAY
||Third Interested Party
Justin Fenwick QC and Andrew Bodnar (instructed by Bryan Cave LLP) for the First and Second Interested Parties
Adrian Darbishire QC (instructed by Peters & Peters) for the Third Interested Party
Hearing dates: 12 October, 2016
Crown Copyright ©
Lord Justice Gross :
" …it is satisfied that one party to criminal proceedings has incurred costs as a result of an unnecessary or improper act or omission by, or on behalf of another party to the proceedings. "
" (i) actually, reasonably and properly incurred, and
(ii) reasonable in amount…."
On an assessment of the amount of costs (r.45.2(7)), relevant factors include:
" (a) the conduct of all the parties;
(b) the particular complexity of the matter or the difficulty or novelty of the questions raised;
(c) the skill, effort, specialised knowledge and responsibility involved;
(d) the time spent on the case;"
Where an order is made for costs to be paid resulting from "unnecessary or improper act etc." (r.45.8), reasons must be given and the court must assess the amount itself: r.45.8 (7) and (8).
i) The Defendant (i.e., the magistrates' court) erred in concluding that there had been an unnecessary or improper act or omission on the part of the Claimant ("Ground I: Unnecessary or improper act or omission");
ii) The Defendant took into account irrelevant information by considering the comments of Sir David Steel ("Ground II: Irrelevant information");
iii) The Defendant failed to give the Claimant an adequate opportunity to respond to the claim for costs ("Ground III: An adequate opportunity to respond"); and
iv) The Defendant failed to take account of proportionality when assessing quantum ("Ground IV: The quantum of costs").
THE FACTUAL BACKGROUND
" The District Judge [i.e., DJ Ikram] has raised queries as to the motives of the Prosecutor [i.e., the Claimant] in bringing the request for summonses but not because the accusations he makes are ill-founded. It is unlikely therefore that the matter will be resolved for many weeks, and, if he were to issue summonses, we have little doubt that you would seek to challenge such a decision by way of judicial review whilst the conspiracy is continued against our client."
The letter proceeded to assert that the Claimant now had a much more developed evidential case, to which there was "no serious legal answer". Additionally, a further reason for the new approach was that they had received "further significant evidential material" since the 9th April, which they did not wish to disclose at that stage – as the enforcement agencies would be asked to make appropriate investigations.
" The case is part-heard. On the basis that the Applicant does not pursue the application and does not invite the issue of summons in this case and upon the Applicant not objecting to the matter being dismissed rather than marked 'withdrawn', I dismiss the application for summonses to be issued in this case."
"32. ….on 12 January 2015…..the Defendant [i.e., the Claimant in these proceedings] instigated a private prosecution against Mr Patel, who is a witness in this case, and Mr Al Rayes alleging a conspiracy to defraud on essentially the same grounds as the civil claim in the Queen's Bench Division; that is to say, the alleged misrepresentation which induced him to come to Dubai. The court in London is invited to proceed on the basis and this is of some note that the claim being advanced in these proceedings is fabricated. Against that background, the Defendant has applied for warrants of arrest of Mr Patel and Mr Al Rayes, an application being due to be heard before a district judge on 9 April.
33. The Defendant is represented by leading counsel. There is a very substantial Witness Statement from the Defendant which forms part of the papers. There is no indication of any funding difficulties or lack of assets, preventing the private prosecution from proceeding. The basis of the complaint is the suggestion that the claim here has been fabricated. This is pretty startling. No such allegation is made in the Defence to the effect that the claim is bogus and dishonest. To the contrary, the Defendant accepts in these proceedings that the Claimant has a good arguable case. It seems to me wholly inappropriate that there should be this collateral attack on its own admission." (Italics added.)
THE DECISION OF DJ IKRAM
"14. …the issue of bringing the matters to the attention of the law enforcement authorities was raised by this court at the very first hearing. He [i.e., the Claimant] chose, initially at least, not to ….bring the matters to the attention of the law enforcement authorities. I was told that there was urgency in bringing the applications before this court and yet, of his own volition, the Applicant changed course and did just that and withdrew the proceedings, deferring to them.
15. Whilst I am not, in any sense, bound by the views of Sir David Steel sitting as a Judge of the DIFC in Dubai, he has been over a period, dealing with various applications between the parties and he considered the applications before this court as 'wholly inappropriate' (judgment dated 24 March 2015).
16. The Applicant remains in custody in Dubai but has been legally represented throughout and launched these applications in the full knowledge that he may well be doing so from a prison cell. He has been legally represented throughout and able to make representations and responses through them."
" The Applicant had choices at the outset and he chose to seek the issue of summonses on a private prosecution whilst in custody in Dubai facing proceedings there. He did so knowing that he would have to conduct proceedings with the possibility that he would remain in custody there. He could have instead gone to law enforcement agencies but chose not to (though later changed his mind). I am of the clear view that it was wholly improper to launch these proceedings and that ….section 19 allows the making of an order against him as party."
" … faced the prospect of reputational damage and the possibility of warrants of arrest being issued against them. The consequences for them would have been serious. District Judge Roscoe directed that they be given notice of the proceedings and they, as they are entitled, have engaged and been a party in response."
" Bearing in mind 'equality of arms' and the consequences to the Respondents [i.e., the IPs], the bills for the Respondents do not seem at all remarkable bearing in mind they also include, of course, solicitors' costs, nor disproportionate to the costs borne by the Applicant to his own legal team. I am [of] the view that they are, in all the circumstances, reasonable.
25. I therefore order the Applicant pay the costs of £121,500 to the First and Second Respondents and the sum of £108,946.14 to the Third Respondent. "
GROUND I: UNNECESSARY OR IMPROPER ACT OR OMISSION
i) What does "improper" mean in the context of s.19 of the Act?
ii) In the light of the meaning we give to the word "improper" and on and only on the evidence before DJ Ikram, was the Judge entitled to make the finding of "impropriety"?
" ….the word 'improper' in this context does not necessarily connote some grave impropriety. Used, as it is, in conjunction with the word 'unnecessary', it is …intended to cover an act or omission which would not have occurred if the party concerned had conducted his case properly."
For my part, I am content to adopt the test as thus accepted by the parties.
" (i) When any court is considering a potential costs order against any party to criminal proceedings, it must clearly identify the statutory power(s) on which it is proposing to act; and thus the relevant threshold and discretionary criteria that will be applicable.
(ii) In respect of an application under section 19 of the 1985 Act, a threshold criterion is that there must be 'an unnecessary or improper act or omission' on the part of the paying party, i.e. an act or omission which would not have occurred if the party concerned had conducted his case properly or which could otherwise have been properly avoided.
(iii) In assessing whether this test is met, the court must take a broad view as to whether, in all the circumstances, the acts of the relevant party were unnecessary or improper.
(iv) Recourse to cases concerning wasted costs applications under section 19A or its civil equivalent, such as Ridehalgh's case  Ch 205, will not be helpful…..
(v) The section 19 procedure is essentially summary and so a detailed investigation into (e.g.) the decision-making process of the prosecution will generally be inappropriate.
(vi) Each case will be fact-dependent; but cases in which a section 19 application against a public prosecutor will be appropriate will be very rare, and generally restricted to those exceptional cases where the prosecution has acted in bad faith or made a clear and stark error as a result of which a defendant has incurred costs for which it is appropriate to compensate him. The court will be slow to find that such an error has occurred. Generally, a decision to prosecute or similar prosecutorial decision will only be an improper act by the prosecution for these purposes if, in all the circumstances, no reasonable prosecutor could have come to that decision."
" (a) Simply because a prosecution fails, even if the defendant is found to have no case to answer, does not of itself overcome the threshold criteria of s.19 (R v P, Evans).
(b) Improper conduct means an act or omission that would not have occurred if the party concerned had conducted his case properly (Denning).
(c) The test is one of impropriety, not merely unreasonableness… The conduct of the prosecution must be starkly improper such that no great investigation into the facts or decision-making process is necessary to establish it (Evans).
(d) Where the case fails as a matter of law, the prosecutor may be more open to a claim that the decision to charge was improper, but even then, that does not necessarily follow because 'no one has a monopoly of legal wisdom, and many legal points are properly arguable' (Evans).
(e) It is important that s.19 applications are not used to attack decisions to prosecute by way of a collateral challenge, and the courts must be ever vigilant to avoid any temptation to impose too high a burden or standard on a public prosecuting authority in respect of prosecution decisions (R v P, Evans).
(f) In consequence of the foregoing principles, the granting of a s.19 application will be 'very rare' and will be 'restricted to those exceptional cases where the prosecution has made a clear and stark error as a result of which a defendant has incurred costs for which it is appropriate to compensate him' (Evans)."
" There is no doubt that the right to bring private prosecutions is still firmly part of English law, and that the right can fairly be seen as a valuable protection against an oversight (or worse) on the part of the public prosecution authorities, as Lord Wilson JSC acknowledges at paras. 28 and 29, and Lord Mance JSC says at para. 115."
On this footing, the law should guard against inadvertently discouraging the bringing of private prosecutions because of a fear of adverse costs consequences.
" …. Advocates and solicitors who have conduct of private prosecutions must observe the highest standards of integrity, of regard for the public interest and duty to act as a Minister for Justice (as described by Farquharson J) in preference to the interests of the client who has instructed them to bring the prosecution. As Judge David QC, a most eminent criminal judge, rightly stated in R v George Maxwell (Developments) Ltd  2 All ER 99, in respect of a private prosecution:
'Traditionally Crown counsel owes a duty to the public and to the court to ensure that the proceeding is fair and in the overall public interest. The duty transcends the duty owed to the person or body that has instituted the proceedings and which prosecutes the indictment.'"
See too, the observations of Buxton LJ (giving the judgment of the Court) in R v Belmarsh Magistrates' Court, ex parte Watts  2 Cr App R 188, at p.200, as to private prosecutors being subject to the same obligations, as a minister of justice, as are the public prosecuting authorities.
" A private prosecutor will almost by definition have a personal interest in the outcome of a case."
As an important constitutional principle, public prosecutors enjoy a wide and independent prosecutorial discretion, including, under the Code for Crown Prosecutors, a focus on the public interest. They are not immune from scrutiny (see, for instance, the Victims Right to Review ("VRR") Scheme) but the Court will be astute to avoid the jurisdiction under s.19 of the Act being misused by becoming an appeal from a prosecutorial decision: see, R v P (supra), at . While the private prosecutor too must enjoy a wide measure of discretion and s.19 must not be abused so as to have a chilling effect, realistically there will likely be more room for questioning the initiation and conduct of a private prosecution. This is, perhaps, especially so where individuals, in effect, seek to prosecute or turn the tables on their accusers: R (Dizaei) v Westminster Magistrates' Court  EWHC 4039 Admin, esp. at ,  and  - where the contrast with the independence and detachment of a public prosecutor is particularly noteworthy. That said, when scrutinising private prosecutors, the principles set out in Evans and Cornish (both supra) will be applicable, mutatis mutandis. A private prosecutor will not be liable for costs merely because the prosecution fails or is withdrawn, still less because it is a private prosecution.
i) With respect to Mr Jones QC's submission to the contrary, on behalf of the Claimant, it was unnecessary for DJ Ikram to delve into the underlying merits of the allegations sought to be advanced in the abandoned application for a private prosecution.
ii) The Claimant was or must have been aware throughout of the difficulty of sustaining a private prosecution in this country while in custody in Dubai.
iii) No proper criticism can be made of DJ Ikram's reasons for the (30th September) Decision. The reasons may have been terse but this was in effect a judgment on costs following a summary process conducted (at the parties' request) without a hearing.
GROUND II: IRRELEVANT INFORMATION
GROUND III: AN ADEQUATE OPPORTUNITY TO RESPOND
GROUND IV: THE QUANTUM OF COSTS
" It will be for the court then to consider, in the light of the information that was before the court, the initial threshold question of whether it was right at all to make an order without detailed consideration of the amounts. If the court considers that it is right to do so, it will then have to consider…whether the costs awarded were proportionate."
" 107. The reality is plain. The Defendant [i.e., in effect, DJ Ikram] should have recognised the bills as fictitious, put forward by the interested parties in the belief that the criminal conduct and bullying disclosed by the conduct of the interested parties, would force him [i.e. the Claimant] to abandon his attempts to defend himself against the Dubai proceedings by making a comprehensive settlement taking into account any costs awarded by the Defendant.
115. It is clear from [the] analysis set out above, that the bills submitted on behalf of the Interested Parties are an exercise in creative fiction….. "
" …Apart from any concluded contract or estoppel, one party may be allowed to give evidence of what the other said or wrote in without prejudice negotiations if the exclusion of the evidence would act as a cloak for perjury, blackmail or other 'unambiguous impropriety'…."
In cases where the protection afforded by the rule had been "unequivocally abused" (at p.2449), the veil imposed by public policy "may have to be pulled aside". As elaborated upon by Rix LJ, in Savings & Investment Bank Ltd v Fincken  EWCA Civ 1630;  1 WLR 667, at :
" …that philosophy [i.e., underlying the without prejudice rule] is antagonistic to treating an admission in without prejudice negotiations as tantamount to an impropriety unless the privilege is itself abused. That …is what Robert Walker LJ meant in the Unilever case …when he repeatedly spoke in terms of the abuse of a privileged occasion, or of the abuse of the protection of the rule of privilege…. That is why Hoffmann LJ in Forster v Friedland 10 November 1992 emphasised that it was the use of the privileged occasion to make a threat in the nature of blackmail that, if unequivocally proved, unacceptable under the label of an unambiguous impropriety…… It is not the mere inconsistency between an admission and a pleaded case or a stated position, with the mere possibility that such a case or position, if persisted in, may lead to perjury, that loses the admitting party the protection of privilege…. It is the fact that the privilege is itself abused that does so. It is not an abuse of the privilege to tell the truth, even where the truth is contrary to one's case. That, after all, is what the without prejudice rule is all about, to encourage parties to speak frankly to one another in aid of reaching a settlement: and the public interest in that rule is very great and not to be sacrificed save in truly exceptional and needy circumstances."
No such circumstances were present in this case.
" i) If making a section 19 order, the court has to order that a specified amount is paid by one party to another party…This requires the judge to assess the costs to be paid…
ii) Unless the judge considers it appropriate to depart from the general rule (and gives reasons for doing so), the assessment must be of an amount that reasonably compensates the receiving party for costs 'actually, reasonably and properly incurred' as a result of the unnecessary or improper act or omission identified, and 'reasonable in amount', in this context, 'reasonableness' incorporating a degree of proportionality……
iii) The statutory scheme envisages a summary assessment, adopting a broad-brush approach. Unlike a summary assessment of costs in civil proceedings, there is no fixed procedure; and the judge may adopt any procedure that gives all relevant parties a fair opportunity to make representations.
iv) The judge must satisfy himself that the amounts claimed do not offend the indemnity principle….
v) In making the assessment, the judge must take into account all relevant factors….
vii) In making the assessment, the judge has a very wide discretion. There is no appeal: his determination will only be subject to challenge on public law grounds.
viii) The judge is required to give reasons for his decision; but in the context of the fact that he is making a broad-brush summary assessment. His reasons need therefore cover only the main issues between the parties. The judge does not explain why he has come to the precise figure to which he has come – let alone descend to the consideration of individual items that would be appropriate in an assessment by a taxing authority – so long as the parties can understand broadly why he considers that figure reasonably to compensate the receiving party for costs reasonably incurred as a result of the identified unnecessary or improper act(s) or omission(s). There is simply no requirement that a receiving party should give the detail required on a detailed assessment, and the judge should not be drawn into performing anything akin to a detailed assessment…. "
Mr Justice Nicol: