knowledge 21 March 2016 |

Who Should You Sue When You Disagree with a Tribunal’s Decision and the Cost of Getting it Wrong

There are important policy reasons why a public body should be immune from the costs of a legal challenge where the public body genuinely attempted to adjudicate between competing claims in a dispute within that body’s remit.

A litigant challenging a public body’s decision needs to understand whether that decision was essentially administrative or adjudicative and who the litigant’s proper opponent in the challenge should be? Is it another party to the proceedings before the public body or is it the public body itself? The wrong choice here can have significant costs consequences.

This issue was recently considered by the Court of Appeal in Walsh v Property Registration Authority.¹ There, the notice party had applied on affidavit to the Authority² for registration of certain lands, of which Mr Walsh had been the registered owner since 1986, claiming adverse possession (“squatter’s title”). The Authority notified Mr Walsh in January 2013 of the adverse possession application and warned that the notice party would be registered unless Mr Walsh showed good cause to the contrary within 21 days. Mr Walsh’s solicitors replied seven days later, objecting to the proposed registration and denying the notice party’s claim. The solicitors also sought a copy of the notice party’s affidavit, to prepare a full response.

The Authority sent a copy of the affidavit in February 2013 and stated that if Mr Walsh maintained his objection, his replying affidavit substantiating his objection should be delivered within one month. Mr Walsh’s solicitors replied in April 2013 stating that his affidavit would be delivered the following week, and requested confirmation that no decision would be made before then. However, the Authority had already registered the notice party as owner in March 2013, apparently on the basis that it could and should register the notice party where no replying affidavit had been received within the time stipulated.

Mr Walsh’s solicitors wrote to the Authority threatening judicial review if the notice party’s registration was not vacated. The Authority declined, noting that Mr Walsh had not sought additional time to deliver his replying affidavit. Judicial review proceedings were begun. The notice party took no part in the proceedings. Ultimately, the High Court quashed the notice party’s registration by consent. Mr Walsh was awarded costs against the Authority. The Authority appealed.

On appeal, the Authority claimed that when carrying out the registration it was not performing an administrative function (where it should be responsible for the consequence of an error) but was performing an adjudicative function, as it was legally required to decide between competing claims, based on the competing parties’ evidence. 

Judicial immunity from costs orders

It is well-established that a judge cannot be liable for costs of a successful legal challenge to the judge’s decision, unless the judge is shown to have acted with impropriety or in bad faith.³ The Authority sought to invoke a similar immunity.

A judge only risks becoming a mark for costs by joining the fray as a litigant to defend his or her decision. Because a judge should be disinterested in the outcome of the case, and therefore of any appeal or challenge to the decision, there is usually no reason to join the fray. The other party to the case is the natural and proper opponent (legitimus contradictor). However, if the challenge attacks the judge’s integrity, by alleging impropriety or bad faith, the judge can participate to defend his or her reputation and constitutional rights. Case law holds that a judge should not be named as a respondent in judicial review unless impropriety or bad faith is alleged, even if the proper respondent does not contest the challenge and/or is unable to meet any costs order which might be made.⁴ 

Decision of the court

The Court of Appeal noted recent authority⁵ that statutory bodies discharging adjudicative functions may enjoy de facto costs immunity where the deciding body does not participate in a challenge to the decision’s validity. However, the court expressed reservations about the extent of this immunity, saying that “…the case for an institutional immunity in respect of the exercise of quasi-judicial powers is less clear-cut and obvious than in the case of a personal immunity from costs for persons discharging judicial powers… if there were indeed such an institutional immunity on the part of administrative bodies exercising adjudicatory powers of this kind, ….. it might be thought that the case for such an immunity would require to be convincingly established.”

The court concluded that the Authority could not claim costs immunity. It did not contest the judicial review, but this was presumably because it could not stand over procedures whereby it registered the notice party’s claim despite being aware that Mr Walsh contested it. Therefore, the registration was quashed because of procedural unfairness, a classic circumstance in which the tribunal itself, and not the other party, is a proper respondent in judicial review. The Authority did not, in fact, adjudicate between Mr Walsh’s and the notice party’s competing claims and could not advance a costs immunity claim because it might otherwise have proceeded to exercise adjudicative powers.

Comment

The risk of a costs immunity claim should inform an assessment by any potential litigant of how its legal challenge to a public body’s decision should be configured. The risk of losing any available immunity is also a strong warning to a public body, which has genuinely exercised adjudicative powers, against active participation in any legal challenge to the merits of its decision.