Costs, State Immunity & Proceeds of Crime

In the important case of In re Tantular [2019] JCA 207 it will be recalled that the Court of Appeal of Jersey ruled that a saisie judiciaire against “realizable property” made under Proceeds of Crime (Jersey) legislation did not prevent a mortgagee assigning its own interest over that property to a third party. The Attorney General then applied on two occasions to stay the Court of Appeal’s declaration pending an application to the Privy Council. Such applications were rejected in judgments [2019] JCA 222 & 245. The Court of Appeal has now issued its fourth judgment [2020] JCA 013 in respect of the costs of this appeal which similarly will be of interest.

Advocate Timothy Hanson acted for the Appellants in this appeal, working with Jeremy Cousins QC of Radcliffe Chambers and instructed by Acies Law, Singapore.

Change in the law was not retrospective

The Attorney General had argued that he was immune from being ordered to pay any costs because legislation had been introduced part way through proceedings preventing a Court from ordering costs against the Attorney General in the absence of bad faith. (The International Co-Operation (Protection From Liability) (Jersey) Law 2018 which came into force in June 2019.) In awarding costs against the Attorney General however, the Court of Appeal  agreed with the arguments of the Appellants that this legislation was not intended to be retrospective and affect the rights of parties in existing proceedings.

Position of foreign government

The Appellants further sought costs against the Indonesian Government that had instigated the proceedings; had been “represented” by the Attorney General under the terms of the statute and, further, expected to share in the ultimate seizure of any monies. In rejecting the defence of state immunity, the Court of Appeal ruled that the foreign government had submitted to the jurisdiction of the Jersey Courts and was liable along with the Attorney General to payment of such costs.

Comment

Prior to the International Co-Operation (Protection From Liability) (Jersey) Law 2018, the Jersey courts occasionally made orders for costs in proceeds of crime cases against the Attorney General in whose name such proceedings were brought, albeit pursuant to a letter of request from a foreign government.  (See for example Kaplan (2009); Tantular (2015); Rosenlund (2016.) In the latter case, the proceedings were struck out as being hopeless.)

Such a power as to costs is important, not least where injustice may otherwise result. The risk of an adverse order for costs is also likely to discourage oppressive behaviour. This is, it should be noted, an area of law that is already acknowledged by the courts to be draconian and, one may add, highly politicised.

Naturally, it is important for the authorities in Jersey to be co-operative, to be tough and, importantly, to be seen to be tough in this particular area. However, in such a complex vortex, experience demonstrates that the Courts need to retain a power to award costs against all the parties that appear before it.

The threshold for costs against the Attorney General is, however, set by the 2018 Law at “bad faith” which is obviously a very high hurdle to overcome, even if interpreted as not requiring proof of dishonesty. Such an approach had, however, not found favour with the Royal Court in Rosenlund but has now been enshrined in statute. Further, given the acceptance that the Attorney General acts as “a Minister of Justice” (In re O’Brien 2003) far higher expectations are clearly envisaged, yet the 2018 Law appears to undermine such notions.

The particular proponents of the 2018 Law are not altogether clear from the history of this statute. Given that existing treaty obligations make clear that the burden of costs can be negotiated between the Attorney General and the foreign government (see The Palermo Convention at Article18, para.28), it is surprising that allowance is simply not made for costs in such an agreement. There was no need – it is submitted -for a statute to interfere with the basic powers of the Court to award costs.

In short, it is submitted that the 2018 Law is an unsatisfactory piece of legislation for which there is no contrary argument considered against its reception. The 2018 Projet (that discusses the then proposed provisions) would have been compiled in consultation with the Attorney General, for whom the provisions seek to shield. Having referred to the desire to provide assistance to other jurisdictions, the Projet states that this “should not be constrained by considerations regarding the risk to public funds in Jersey arising from claims for costs, damages, or consequential losses.” The fact that cases had gone wrong in the past; that injustice might result under these new provisions, or that the Royal Court had rejected the approach now being advocated, are not mentioned in this remarkably short document.

The issue is inadequately swept up at the end of the Projet as being whether a liability to costs will restrain an abuse of power or hinder the beneficial use of regulatory powers. The relevant considerations do not, in fact, amount to such a stark choice, but in any event this is simply left as “a matter of judgment for the local legislature” with no contrary guidance proffered.

For new cases where this Law does apply, the recent judgment of the Court of Appeal will mean at least that there will (in appropriate circumstances) now be the possibility of an order for costs against the foreign government responsible for the proceedings.  The decision of the Court of Appeal is, therefore, greatly to be welcomed.