The Judicial Committee of the Privy Council Decisions

 


Ingraham & Ors v. Glinton & Anor (The Bahamas ) [2006] UKPC 40 (24 July 2006)

Privy Council Appeal No 53 of 2005

(1) The Right Honourable Hubert Ingraham MP

(Prime Minister of the Commonwealth of the Bahamas,

sued in his official and in a representative capacity)

(2) The Honourable Sir William Allen MP

(Minister of Finance, sued in his official

and in a representative capacity)

(3) The Compliance Commission

(4) The Inspector of Financial and Corporate Services

(5) The Attorney General of the Bahamas Appellants

v.

(1) Maurice O. Glinton

(2) Leandra A. Esfakis Respondents

FROM

THE COURT OF APPEAL

OF THE BAHAMAS

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JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL

Delivered the 24th July 2006

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Present at the hearing:-

Lord Rodger of Earlsferry

Lord Steyn

Lord Walker of Gestingthorpe

Lord Carswell

Lord Brown of Eaton-under-Heywood

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[Delivered by Lord Brown of Eaton-under-Heywood]

1. This is a most unusual appeal, unusual in the issue arising for the Board's determination and unusual too (perhaps unique) in the Board's decision to dispose of the appeal without an oral hearing, although with the benefit of the appellants' written argument, the respondents having chosen not to resist it.
2. The substantive issue arising is whether the Supreme Court of the Bahamas has jurisdiction to strike out proceedings brought by way of an application under article 28 of the Constitution of the Bahamas alleging a contravention of the Constitution on the basis that it discloses no reasonable cause of action. It is convenient to set out at once the material parts both of article 28 itself and also of Order 18 Rule 19(1)(a) of the Rules of the Supreme Court 1978, the rule under which the Bahamian courts' strike-out jurisdiction arises.
3. Article 28 of the constitution provides:

"(1) If any person alleges that any of the provisions of articles 16-27 (inclusive) of this Constitution has been . . . contravened in relation to him then, without prejudice to any other action with respect to the same subject matter which is lawfully available, that person may apply to the Supreme Court for redress;

(2) The Supreme Court shall have original jurisdiction (a) to hear and determine any application made by any person in pursuance of paragraph (1) of this article; and (b) . . . , and may make such orders, issue such writs and give such directions as it may consider appropriate . . ."

Order 18 Rule 19(1) provides:

"The Court may at any stage of the proceedings order to be struck out or amended any pleading or the indorsement of any writ in the action, or anything in any pleading or the indorsement on the ground that (a) it discloses no reasonable cause of action or defence, as the case may be; . . . "

4. The circumstances in which the issue arises here can be comparatively shortly stated. Following a G7 meeting in 1989 a Financial Action Task Force was established with responsibility amongst other things for making recommendations as to the labelling and blacklisting of jurisdictions "non-cooperative in the fight against money-laundering". In June 2000 the Task Force produced a report identifying "serious deficiencies in the counter money-laundering systems of the Commonwealth of the Bahamas", recording that "the counter money-laundering regime embodied in the legal, supervisory, and regulatory systems of the Bahamas suffer from serious systemic problems", and including the Bahamas in the list of uncooperative jurisdictions in relation to the prevention of money-laundering.
5. The following month the Prime Minister (the first appellant) publicly accepted "the legitimacy of a number of deficiencies identified" in the report and set in train the preparation and enactment of a raft of legislation, both primary and secondary, based on measures recommended by the Organisation for Economic Co-operation and Development. The legislation included: the Financial Intelligence Unit Act 2000, the Central Bank of Bahamas Act 2000, the Banks and Trust Companies Regulation Act 2000, the Proceeds of Crime Act 2000, the Financial Transactions Reporting Act 2000, the Financial and Corporate Service Providers Act 2000, the International Business Companies Act 2000, the Criminal Justice (International Co-operation) Act 2000, the Financial Intelligence (Transactions Reporting) Regulations 2000, and the Financial Intelligence (Transactions Reporting) Regulations 2001. Most of these provisions came into force on 29 December 2000.
6. The respondents are both barristers who strongly object to this legislation, particularly as it affects them. The first respondent in June 2001 registered under the Financial Transactions Reporting Act 2000 and in July 2001 applied for a licence under the Financial and Corporate Service Providers Act 2000, in each case under protest.
7. On 10 December 2001 the respondents issued a generally endorsed writ. Paragraphs 1 to 26 sought declarations, paragraphs 27 and 28 wide-ranging orders, and paragraph 29 "such orders, writs or directions pursuant to article 28 of the constitution" as might seem appropriate to the Court. The defendants to the writ were the Prime Minister, the Minister of Finance and the Attorney General, the Compliance Commission, and the Inspector of Financial and Corporate Services (together, "the appellants"). On 18 March 2002 the first respondent filed a lengthy affidavit in support.
8. By summons issued on 18 April 2002 the appellants sought an order under Order 18, Rule 19 that paragraphs 1 to 13 of the writ be struck out on the grounds that they disclosed no reasonable cause of action or were scandalous, frivolous and vexatious. The quotation of a single paragraph sufficiently gives the flavour of this group of paragraphs as a whole:

"(6) A declaration the Cabinet for the Bahamas comprised of the first and second defendants abdicated their collective responsibility for the direction and control of the government of the Bahamas and being under the influence of the said defendants, arrogated to themselves control of the parliament's legislative faculties and processes and so to effect procurement of the financial services measures under the guise of duly enacted legislation."

The appellants sought in addition to strike out certain paragraphs from the first respondent's affidavit.

9. On 30 May 2002, following a three-day hearing, Sir Burton Hall CJ acceded to the appellant's application to strike out paragraphs 1 to 13 of the writ (although not the challenged paragraphs of the affidavit). Having observed that "the courts are constrained to deal only with . . . legal issues and . . . can only provide legal solutions", the Chief Justice continued:

"The reliefs sought in paragraphs 1 through 13 of the indorsement – while they might be the subject of fervent discourses among scholars of political science, or argued between journalistic pundits or debated in parliamentary deliberations – are, none of them, legal reliefs which a court of law is empowered to grant."

The respondents appealed and, following a hearing on 1 September 2004, the Court of Appeal (The Rt Hon Mrs Justice Sawyer, President, Churaman and Osadebay JJA) allowed the appeal for reasons given on 10 March 2005. The Court stated that:

"The impugned paragraphs of the writ seek declarations that certain statutes dealing with the financial sector of the Bahamian economy were not passed by Parliament in the exercise of its undoubted power to enact legislation for the 'peace, order and good government' of the Bahamas and so were unconstitutional."

Having noted that the main issue on the appeal was whether the Chief Justice had jurisdiction under Order 18, Rule 19 to summarily strike out the disputed paragraphs, the Court correctly reminded itself that the strike-out power is to be exercised only in "plain and obvious" cases, and concluded:

"10. In our judgment this was not a plain and obvious case since there was at common law no 'cause of action' to challenge the constitutionality of legislation because the United Kingdom had no 'written' constitution as that term is generally understood and the British Parliament was 'supreme' in the exercise of its legislative jurisdiction.

11. The Bahamas, on the other hand, like many of the newer Commonwealth countries, has a written constitution which contains entrenched human rights provisions for persons and entities in the Bahamas. By article 28 of the Constitution, anyone who alleges that his human rights are being, or are likely to be infringed, has a right to apply to the Supreme Court for relief. Such an application, however worded, would not necessarily be a 'reasonable cause of action' at common law for the reason already stated. We therefore do not think that it would be open to a court of justice to strike out such a claim under Order 18 Rule 19 (1)(a).

. . .

13. In our view, while the impugned paragraphs of the plaintiff's statement of claim may not show a 'reasonable cause of action' at common law, the matter before the learned Chief Justice is a matter of constitutional interpretation in the light of the facts outlined in the statement of claim. . . .

14. Finally, it must be noted that there is no provision in the Constitution giving a court the power to summarily dismiss a claim for constitutional relief under its present provisions; no statute can therefore confer such a power."

10. Essentially, therefore, the Court decided that because at common law a constitutional challenge was not available, it cannot be a cause of action and ex hypothesi, therefore, cannot fall for consideration as to whether it is "reasonable" or not under Order 18 Rule 19(1)(a).
11. Their Lordships have difficulty with this reasoning. It could be said equally of actions for breach of statutory duty that they too do not arise at common law. But surely no one doubts that those causes of action are amenable to the courts' strike-out jurisdiction. Of course, the Court of Appeal was right to direct itself that claims should only be struck out in plain and obvious cases and, of course, courts should look with particular care at constitutional claims, constitutional rights emanating from a higher order law. But constitutional claims cannot be impervious to the strike-out jurisdiction and it would be most unfortunate if they were. It cannot be right that anyone issuing proceedings under article 28 of the Constitution is guaranteed a full hearing of his claim irrespective of how ill-founded, hopeless, abusive or vexatious it may be.
12. Take this very case. The Chief Justice was surely right to characterise the disputed paragraphs of the claim as he did. They were argumentative and political and quite incapable of giving rise to the legal declarations sought. The case for a strike-out was in their Lordships' view perfectly plain and obvious. If ever a claim were foredoomed to fail this was it. The Chief Justice might, indeed, be thought over-fastidious in not having struck out the disputed parts of the affidavit too.
13. In short, their Lordships conclude that Order 18 Rule 19(1)(a) applies to constitutional proceedings as to any others, that there is no need to look to the Constitution itself for specific power to summarily dismiss a claim for constitutional relief, and that the Chief Justice was right to have struck out the disputed paragraphs of this particular claim.
14. Their Lordships will accordingly humbly advise Her Majesty that this appeal be allowed. The parties may make written submissions as to costs within 14 days.