In the recent case of Peerless Limited v Gambling Regulatory Authority and others  UKPC 29, referred from the Supreme Court of Mauritius (“the Supreme Court”) to the Privy Council, it was established that the Supreme Court had erred in not engaging with the merits of the claim where an applicant had seriously failed to comply with the duty of candour.
1. Key points
- The Privy Council put more weight on the risk that disregarding the merits of a claim may result in injustice than on penalising the applicant for not adhering to the duty of candour by refusing leave.
- Instead courts were encouraged to penalise such applicants by awarding costs to the respondent, even where the applicant is successful.
Peerless Limited, a Mauritius bookmaker (“the Appellant”), brought proceedings against the Gambling Regulatory Authority (“the Respondent”), which is charged with the regulation and control of gambling activities in Mauritius. Its objectives include ensuring that gambling is conducted in a fair and transparent manner. The Appellant was the holder of a licence granted by the Respondent. The Appellant’s licence was suspended and subsequently not renewed; no reasons were proffered by the Respondent for these decisions. The Appellant brought judicial review proceedings against the Respondent to challenge the decisions.
This appeal before the Privy Council arose following the judgment of the Supreme Court refusing the Appellant leave to apply for judicial review. The Supreme Court refused leave based on the failure by the Appellant to make full and frank disclosure of facts, the misleading statements made in the Appellant’s affidavits and the Appellant’s lack of candour.
3. Privy Council's decision
Sir Paul Girvan, giving the judgment of the Privy Council, criticised the conduct of the Appellant and its legal advisers. He stated that the Appellant’s evidence “was not merely presented to the Supreme Court in an untidy and unsatisfactory manner but it was at times positively misleading, whether through mistake and error or through deliberate design.” However, the Privy Council found that while the duty of candour applies throughout the proceedings, the court must not lose sight of the need to ensure that justice is done. An overly rigid application of the duty of candour may result in unfairness. The duty of candour in judicial review proceedings requires the parties to set out fully and fairly in their evidence all matters that are relevant to the decision under challenge or any issue arising in the proceedings.
The Privy Council noted that a refusal to grant leave to apply for judicial review is a final decision, which precludes a party from having the merits of his case considered at a substantive hearing. Disregarding the merits of a claim may result in injustice. The Privy Council suggested that 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 Supreme Court had other less draconian ways of marking its disapproval of the conduct of a party and its legal advisers, for instance by making costs orders against the Appellant.
The Privy Council noted that the Supreme Court could have had regard to the lack of candour when exercising its overall discretion in relation to the question of whether leave should be granted on the merits of the case (citing the approach of Harrison J in R v Wirral Metropolitan Borough Council, Ex p Bell (1994) 27 HLR 234). Adopting this approach itself the Privy Council considered the Appellant's substantive arguments on the merits of the application for leave. The Appellant argued that there was an absence of any reasons to explain and justify the Respondent's decision to suspend the licence and not to renew the licence. The Privy Council found that the importance of the decision in question to the individual may be such that the individual cannot be left to receive an unreasoned decision. One of the objectives of the Respondent is to ensure transparency in the gambling industry in Mauritius and the Privy Council suggested that transparency of process calls for reasons to be given for decisions.
Weighing in the scales the lack of candour, the Privy Council concluded that, notwithstanding the Appellant’s conduct, there was a sufficiently strongly arguable case to call for the grant of leave to apply for judicial review on the issue of the absence of reasons. The Privy Council thus allowed the appeal, set aside the order of the Supreme Court and granted leave to apply for judicial review.
However, the Privy Council penalised the Appellant by not interfering with the Supreme Court's decision to award costs in favour of the Respondent.
It should first be noted that this case is not in and of itself binding for cases brought in the courts of England and Wales. However, it cites and follows principles established in English cases. Further, it serves as persuasive precedent, as the Privy Council is, in part, comprised of members of the Supreme Court of the United Kingdom.
The case illustrates the general reluctance to disregard the merits of a claim even in the face of an applicant's gross lack of candour. On the Privy Council's suggested approach of folding the question of the lack of candour into its consideration of whether leave should be granted on the merits of the case, an erroneous applicant will be afforded a generous opportunity to bring judicial review proceedings. However, the ruling on costs in favour of the Respondent even where the appeal was allowed and leave for judicial review was granted demonstrated that applicants should adhere to the duty of candour. Otherwise, they may face a significant costs burden even in a successful claim.