Perinpanathan, R (on the application of) v City of Westminster Magistrates Court & Anor (Rev 1)

Under section 64 of the Magistrates’ Courts Act 1980, a magistrates’ court has a broad discretion over both liability for costs and their amount. The provision creates no presumption that costs follow the event.

Where police or another public regulator reasonably brings first-instance proceedings in discharge of a public duty, and no CPR costs presumption applies, the usual starting point is no order as to costs, despite the private party’s success. The court must nevertheless consider all circumstances. Costs may be awarded for unreasonable or improper conduct, substantial hardship, or other sufficient reasons.

The police seized about £150,000 carried by the appellant’s daughter and later applied under section 298 of the Proceeds of Crime Act 2002 to forfeit it as cash intended for unlawful conduct. The magistrates dismissed the forfeiture application, ordered the return of the cash with interest, but made no order for the appellant’s costs because the application had been reasonably made.

The Divisional Court dismissed the appellant’s judicial-review claim: Perinpanathan, R (on the application of) v City of Westminster Magistrates Court [2009] EWHC 762 (Admin). The appeal concerned whether the magistrates had correctly applied the public-authority costs principles in City of Bradford Metropolitan District Council v Booth.

1. Appeal dismissed unanimously. Stanley Burnton LJ, with whom Maurice Kay LJ agreed, held that section 64(1) of the Magistrates’ Courts Act 1980 governs both the incidence and amount of costs. It contains no equivalent of the CPR presumption that costs follow the event. The court must make the order that is just and reasonable on all the circumstances.

2. The court followed the principle in City of Bradford Metropolitan District Council v Booth and the Court of Appeal’s approval of it in Baxendale-Walker v The Law Society. In proceedings brought at first instance by a public authority acting reasonably in the public interest, and to which the CPR costs regime does not apply, the starting point is normally no order for costs even if the private party succeeds. The principle is not an inflexible test. Costs may be awarded where the authority acted improperly, unreasonably or irresponsibly, where substantial hardship would otherwise result, or where other relevant circumstances justify that result.

3. The Master of the Rolls agreed. He stressed that the absence of a costs order can leave an innocent person unable to recover the cost of vindicating rights against the police. That consequence requires magistrates to scrutinise with care whether the police acted reasonably in seizing, detaining and pursuing forfeiture of the property.

4. The principle applied to a forfeiture application under section 298 of the Proceeds of Crime Act 2002. The police had reasonable grounds for the seizure, detention and commencement of proceedings. They could not retain the cash indefinitely and had no responsible alternative to applying for forfeiture. Their application failed because of evidence called at the hearing, not because their conduct was criticised. The appellant’s costs, about £9,000 compared with the cash at stake, did not establish undue financial prejudice. The magistrates were therefore entitled to make no order for costs.

• Court of Appeal (Civil Division): Appeal dismissed. The court upheld the refusal to order the Metropolitan Police Commissioner to pay the appellant’s costs.
• Divisional Court (Administrative Court): The appellant’s judicial-review claim was dismissed: [2009] EWHC 762 (Admin).
• City of Westminster Magistrates’ Court: The forfeiture application under section 298 of the Proceeds of Crime Act 2002 was dismissed and the cash ordered to be returned with interest. No order for costs was made.