Perinpanathan v City of Westminster Magistrates Court

Under section 64 of the Magistrates' Courts Act 1980, costs in magistrates' court proceedings are discretionary. The court may consider whether a public authority acted honestly, reasonably, properly and on grounds that reasonably appeared sound. It may also weigh the financial prejudice to the successful party and the public interest in enabling public authorities to make and stand by sound decisions. Those principles apply, by analogy, to properly brought cash-forfeiture proceedings under the Proceeds of Crime Act 2002. They do not create a rigid test, and an applicant has no immunity from costs. Where proceedings are brought inappropriately or without an honest, reasonable and properly grounded basis, an adverse costs order remains available.

Cash seized from a 15-year-old girl at Heathrow was the subject of forfeiture proceedings under the Proceeds of Crime Act 2002. The Westminster magistrates declined to order forfeiture because the interested parties had not proved, on the balance of probabilities, that the cash was intended for unlawful conduct. They nevertheless made no order for costs, considering that the application had been reasonably brought.

The claimant sought judicial review of that costs decision. The central issue was whether the principles in City of Bradford Metropolitan District Council v Booth, concerning costs where a public authority’s administrative decision is successfully challenged, applied to failed cash-forfeiture proceedings.

1. The judicial review application was dismissed. The magistrates had not erred in law and were entitled to make no order for costs.

2. Section 64 of the Magistrates' Courts Act 1980 confers a broad discretion to make such costs order as the court considers just and reasonable. The principles in City of Bradford Metropolitan District Council v Booth are factors to be considered under that statutory discretion, not a legal test which determines the result.

3. The distinction between administrative decisions, such as licensing decisions, and forfeiture proceedings is limited for costs purposes. In both situations the police may have a public duty to act on an honest, reasonable and properly grounded assessment. The public interest may require an application for forfeiture where the evidence makes unlawful use more probable than not. Fear of an adverse costs order should not deter such applications.

4. The analogy does not give the police carte blanche. If forfeiture proceedings are brought without honesty, reasonableness, propriety or apparently sound grounds, the court should not hesitate to order costs against the applicant.

5. The authorities on costs in criminal proceedings and Grimes v Crown Prosecution Service did not require a different result. Grimes concerned a different general costs rule under CPR 44.3, whereas the present case was governed by section 64.

6. On the facts, the unusual circumstances surrounding the substantial cash shipment, the unexplained destination, the apparent absence of profit, the Sri Lankan terrorism context and the suspected terrorist connection of a person associated with the money gave proper grounds for the application. The magistrates’ decision was therefore within their discretion.

• Westminster Magistrates' Court: refused forfeiture of the cash and made no order for costs.
• High Court (Administrative Court): dismissed the judicial review application and upheld the magistrates' costs decision.