Out-Law News 3 min. read

'Broader interest of justice' can trump parties' duty of candour in judicial review cases, says Privy Council

Courts should not dismiss an application for judicial review solely on the grounds that one party has not complied with its duty to disclose all necessary facts and issues if doing so would not be in the interests of justice, one of the UK's highest courts has ruled.

The Judicial Committee of the Privy Council ('Privy Council'), which acts as the highest appeal court for several independent Commonwealth countries, said that bookmaker Peerless Ltd had a "sufficiently strongly arguable case" in its claim against the Gambling Regulatory Authority (GRA) of Mauritius. The Supreme Court of Mauritius had refused its application for judicial review because Peerless had not complied with its duty of candour and had failed to disclose certain facts.

Litigation expert Craig Connal QC of Pinsent Masons, the law firm behind Out-Law.com, said that the case provided a rare example of an opportunity for judges who sit at the highest level in the UK to comment on practical issues in relation to judicial review.

"The judgment reiterates and reinforces the importance of candour and the possible consequences of failing to comply with that duty - but with a nod to the broader interests of justice so that a particular result should not be assumed to apply automatically," he said.

"The duty of candour applies throughout judicial review pleadings, and applies most rigorously in proceedings at which only one party is present where 'the court must rely on the moving party's good faith in presenting his case fully, honestly and accurately'. The Privy Council endorsed the view that a rule that orders obtained in breach of this stricture will be discharged not only deprives the 'wrongdoer' of the improperly obtained advantage, but also serves as a deterrent to others," he said.

"But – and there is always a but – the court Privy Council stressed that judges must retain sight of 'the need to ensure that justice is done…… Disregarding the merits of the claim may result in injustice'. Considerations might be somewhat different if both parties are present at the hearing. where there should be no rush to dismiss the claim," he said.

Peerless had challenged the GRA's decision to suspend and then not renew its licence to conduct fixed odds betting on football matches played abroad. It was first granted the licence in 2008, subject to a number of standard conditions. These included a requirement to use software of international standard and approved by an international institution, and a requirement to pay unclaimed winnings into a 'National Solidarity Fund' within a certain time period. The company did not take steps to comply with these conditions until the GRA began proceedings to suspend the licence in 2010.

The GRA last renewed the company's licence in 2010. On this occasion, it did not send Peerless a copy of the licence conditions which had been updated that year with new warnings against non-compliance. The GRA suspended the licence without notice in 2011 for "failing to pay unclaimed winnings to the NSF". Peerless wrote to the GRA challenging this decision on the grounds that it was in the process of addressing the issues, and that the regulator should have acted under less draconian legislation which did not require immediate suspension.

Peerless then attempted to renew its licence in 2011, but the GRA returned the cheque without explanation. The bookmaker then applied for judicial review. However, the courts in Mauritius refused its application as its evidence was "untidy and unsatisfactory" if not "positively misleading". Because the application was dismissed for lack of candour, the court did not consider whether there was any real legal merit in any of Peerless' grounds of legal challenge.

The Privy Council agreed that the conduct of Peerless and its lawyers was "lamentable and justifiably open to severe criticism". However, it said that the courts "must not lose sight of the need to ensure that justice is done". "An overly rigid application of the principle may result in unfairness to a party depending on all the circumstances," it said in its judgment.

"A refusal to grant leave to apply for judicial review is a final and terminating decision which precludes a party from having the merits of his case considered at a substantive hearing," said Sir Paul Girvan on behalf of the court. "The power to terminate proceedings without any hearing on the merits is one which should be exercised with considerable caution and in a proportionate way. In its armoury of powers the court has other less draconian ways of marking its disapproval of the conduct of a party and its legal advisers."

The Privy Council returned the case to the courts in Mauritius for a further hearing, but let a costs order against Peerless stand.

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