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Anguilla High Court quashes Executive Council’s refusal to grant Alien Landholding Licence on basis of Legitimate Expectation

Keithley Lake & Associates’ Attorneys Mr. Kenneth G. Porter and Mr. D. Michael Bourne led by Mr. Saul Froomkin Q.C., achieved notable success when they represented La Baia Ltd. in an application for Judicial Review of the decision of the Executive Council (EXCO) to not grant La Baia Ltd. an Alien Landholding Licence. The basis of the application was that the decision was in breach of a legitimate expectation.

The factual history giving rise to the proceedings is such that in or around 1986, La Baia Ltd. (“La Baia”) purchased land in Anguilla (“the land”). However, in 2001 it was discovered that, unbeknownst to them, the land was transferred to a third party. La Baia accordingly instituted proceedings against said third party. The land therefore became the subject matter of litigation over a protracted period. Judgment was however, delivered in favour of La Baia before the High Court in 2006, the Court of Appeal in 2010 and finally, the Judicial Committee of the Privy Council in 2011.

More relevant to this case is the fact that La Baia had submitted an application for an Alien Land Holding Licence (ALHL) in order to hold the property under Anguilla law. However, the Government of Anguilla (“GOA”) issued correspondence to La Baia shortly after it purchased the land indicating that no licence would be issued until the beneficial owner (at the time) had fulfilled obligations which were imposed on him in relation to another project on other lands in Anguilla. These other lands were subsequently sold.

A further application for the ALHL was submitted more recently to the GOA. The Office of the Chief Minister assured La Baia, by way of a second letter, that there was no reason why its application for a licence would not be looked at favourably. La Baia had further discussions with the GOA and was assured by way of a third letter that there was nothing known which would preclude the granting of the ALHL, if the Court ruled in La Baia’s favour. Subsequent to the decision of the Privy Council, La Baia renewed its application for an ALHL expecting that it would be granted on the basis of the representations made in the various correspondences. In furtherance of its application, La Baia requested an interview with the GOA to discuss its application, as was the custom. However, despite its repeated requests, this opportunity was never forthcoming. In any event, to La Baia’s surprise, its application was refused by the GOA without any the reasons being disclosed, despite La Baia’s repeated requests.

La Baia accordingly instituted proceedings seeking Judicial Review of Government of Anguilla’s (Executive Council) decision. La Baia claimed an order of certiorari quashing Executive Council’s (“EXCO”) decision and a declaration that said decision was contrary to the rules of natural justice in that the Defendant failed to provide La Baia with reasons for its decision and/or that it breached La Baia’s legitimate expectation of being granted the ALHL.

During the course of the proceedings for Judicial Review, EXCO agreed to a certiorari to quash the decision not to give reasons for the refusal of the ALHL on the basis that such a failure was in breach of the rules of natural justice. The question for the High Court therefore turned on whether the conduct of EXCO, having regard to the various aforementioned correspondences, gave rise to a legitimate expectation on the part of La Baia that its application for an ALHL would be granted.

In rendering its decision, the High Court deduced the principles from the relevant authorities* which are to guide a court on the issue of legitimate expectation. The High Court intimated that the doctrine of legitimate expectation is grounded on the basic principle of fairness. Further, the protection of legitimate expectation is at the root of the constitutional principle of the rule of law, which requires regularity, predictability and certainty in the government’s dealings with the public. The High Court therefore in making its determination adopted the two-step-process outlined by the said authorities, namely determining firstly whether a legitimate expectation was created by the promises and/or representations made by the public body and secondly, whether the frustration of that expectation by the public body was justified as being in the public interest. On the second limb, the burden of proof shifts to the public body to prove such justification.

In the instant case, the Respondent argued that La Baia did not have a right to be granted an ALHL as the granting of same was discretionary. It was further argued that the letters did not and could not create a legitimate expectation but merely indicated that EXCO was prepared to give due consideration to the application. The High Court ruled however that while the first letter was insufficient, both the subsequent letters were indeed sufficient to create the legitimate expectation that La Baia would obtain an ALHL. In fact, the High Court stated that “it is difficult to see what else could have reasonably been understood by these representations”. The High Court, having determined that there was a legitimate expectation, would normally then have to decide whether EXCO was entitled to frustrate that expectation. The arguments by Counsel for EXCO were, however, limited to addressing and considering whether there was indeed a legitimate expectation in existence, as Counsel for the Respondent accepted that the latter issue regarding the entitlement to frustrate that expectation was moot. Accordingly, the Court ordered that EXCO’s decision to refuse to issue an ALHL was quashed on the grounds that there was a legitimate expectation created by EXCO that La Baia would be issued with such ALHL. The decision has been appealed by the Respondent; however a date for the hearing has not yet been set.

The judgment of the High Court is significant as it reminds the public of the important principle that an adjudicating body which conducts itself so as to create a legitimate expectation, must actually honour that expectation in order to be fair. It gives credence to the rhetoric that justice must not only be done but also be seen to be done. Furthermore, the concession of EXCO, in this case, that its failure to give reasons for its decision was a breach of natural justice, was an acknowledgment on its part of the need for transparency in the dealings of public bodies. The public having knowledge of the reasons for the decisions being rendered is the means by which it can be assured that such decisions are not unlawful and/or influenced by irrelevant and/or improper considerations.

*R v Board of Inland Revenue ex parte M.F.K. Underwriting Agencies Ltd. and others [1990] 1 ALL ER 91,110; The A-G of Hong Kong v Ng Yeun Shiu [1983] 2 ALL ER 346; R v North and East Devon Health Authority Ex parte Coughlan [2001] QB 213; Paponette and Others v A-G of Trinidad & Tobago [2012] UKPC 32