Electoral Commission, R (on the application of) v City of Westminster Magistrates Court & Anor

For donations to registered political parties, the statutory test is whether an individual was registered in an electoral register when the donation was received. Where an impermissible donation is accepted and not returned within 30 days, the ordinary consequence of an application under s.58(2) is forfeiture of an amount equal to its value. The discretion is narrow. It is not displaced by the donor’s non-foreign status, prior entitlement or belief that registration existed, the party’s lack of knowledge, limited resources or financial difficulties. Limited discretion may remain where circumstances beyond the party’s control prevent timely enquiries, an inaccurate register misleads it, or the donation is returned before forfeiture is sought.

The Electoral Commission sought forfeiture of donations made to the United Kingdom Independence Party by Alan Bown during a period when he was not registered on an electoral register. The party did not return the donations within the statutory period.

The Senior District Judge ordered forfeiture only of donations received after the party became aware of the registration problem. The Administrative Court quashed that decision and remitted the application, but the Electoral Commission appealed the judge’s conclusions on the proper construction of s.58(2) of the Political Parties, Elections and Referendums Act 2000. The central issue was the scope of the magistrates’ discretion to order forfeiture.

Sir Paul Kennedy gave the judgment of the court. Lord Justice Goldring and Lord Justice Waller agreed.

1. Statutory purpose. The discretion under s.58(2) had to be construed in the context of the policy and objects of the Political Parties, Elections and Referendums Act 2000. Applying Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997 and R v Tower Hamlets LBC ex parte Chetnik Developments Ltd [1988] 1 AC 858, it could be exercised only for reasons relevant to the statutory purpose.
2. Ordinary consequence. Sections 54 and 56 created a clear registration-based test. Once a party had accepted a donation from an impermissible donor and failed to return it within 30 days, the normal consequence of an application under s.58(2) was forfeiture of an amount equal to the donation’s value. The discretion was narrow, although not wholly automatic.
3. Irrelevant considerations. The court rejected reliance on the donor’s non-foreign status, previous registration, entitlement to register or belief that he was registered. Parliament had deliberately rejected those alternatives. Innocent or inadvertent acceptance did not prevent forfeiture. A party’s limited resources, inability to pay, use of the funds for ordinary political purposes, possible insolvency or alleged chilling effect on political activity likewise did not justify retaining the benefit of an unlawful donation.
4. Possible limits. Discretion might assist where circumstances beyond the party’s control prevented timely enquiries, an inaccurate electoral-register entry misled the party, or the donation or its value had been returned before forfeiture was sought. The latter circumstance avoided double recovery.
5. The Senior District Judge had misconstrued the Act, had not validly exercised the s.58(2) discretion and had given inadequate reasons. The decision was therefore irrational. The quashing order was upheld. The Court of Appeal substituted the relevant operative paragraphs and remitted the application to the City of Westminster Magistrates’ Court for reconsideration in accordance with its judgment.

• High Court of Justice, Queen’s Bench Division, Administrative Court: Walker J quashed the Senior District Judge’s forfeiture decision and remitted the application for reconsideration, making no order as to costs. The quashing order was not challenged.
• Court of Appeal (Civil Division): The appeal succeeded on the proper construction and application of s.58(2). The operative remittal order was varied, and the application was remitted to the City of Westminster Magistrates’ Court.