Dalston Project Limited & Ors. v Secretary of State for Transport

In proceedings under section 38(2) of the Sanctions and Anti-Money Laundering Act 2018, the court may in principle award damages for conversion as well as damages under section 8 of the Human Rights Act 1998. Section 38(5) permits any relief available in judicial review proceedings, including damages authorised by section 31(4) of the Senior Courts Act 1981. The modified Part 8 procedure does not remove that statutory power. The court may determine the legality of the sanctions decision and pure legal issues first, giving further directions for factual issues concerning causation and quantification.

The claimants challenged decisions detaining the superyacht Phi under regulations 57C(1) and 57D(1)(a) of the Russia (Sanctions) (EU Exit) Regulations 2019. Their proceedings were brought under section 38(2) of the Sanctions and Anti-Money Laundering Act 2018 and sought an order setting aside the detention decision, damages under the Human Rights Act 1998, and damages in conversion.

The parties agreed directions towards a substantive hearing. The dispute was whether the conversion claim could be determined within the section 38 proceedings, and whether the July hearing should address entitlement to damages in principle.

1. Conversion damages within section 38 proceedings. The court held that section 38(5) of the Sanctions and Anti-Money Laundering Act 2018 clearly permits the court, if it sets aside the challenged decision, to grant any order or relief available in judicial review proceedings. Section 31(4) of the Senior Courts Act 1981 includes damages arising from the matter to which the application relates. That relief may include damages for conversion in an appropriate case.
2. The absence from CPR Part 79 of an express equivalent to CPR 54.3(2) cannot negate a power conferred by primary legislation. Section 39(2) of Sanctions and Anti-Money Laundering Act 2018 also confirms that damages may be awarded under the statutory scheme. The reasoning in Bank Mellat v HM Treasury (No. 5), [2016] EWCA Civ 452, was consistent with that conclusion.
3. There was no principled distinction between damages under section 8 of the Human Rights Act 1998 and common-law tort damages. Both are distinct causes of action, and both may be claimed in judicial review proceedings where section 31(4) is satisfied. Section 38(5) produces the same result in proceedings under section 38(2) of SAMLA.
4. The modified Part 8 procedure may be unsuitable for substantial factual disputes, but this creates no jurisdictional difficulty. The court should determine legality and pure issues of law first. It may then give directions for factual issues on causation and quantification, including continuation under CPR 8.1(4) or transfer under Part 30.

Directions were ordered so that the July 2023 hearing would determine pure legal issues concerning entitlement to damages under the HRA and in conversion. Further directions would follow for any issues of fact.