The “Arguable Case” Standard and the Duty of Candour: National Bank of Anguilla (Private Banking and Trust) Ltd (in Administration) v. Chief Minister of Anguilla, [2025] UKPC 14

There are some interesting nuggets in the recent Privy Council decision in National Bank of Anguilla (Private Banking and Trust) Ltd (in Administration) v. Chief Minister of Anguilla, [2025] UKPC 14 one on the meaning of the arguable case standard for judicial review and one on the duty of candour. The case arose from a financial crisis in Anguilla. Lord Reed and Lady Rose explain the factual background:

In 2013, the National Bank and the Caribbean Bank (together “the parent banks”) were in serious difficulty because of the financial crisis in Anguilla. The fourth respondent, the Eastern Caribbean Central Bank (“the ECCB”), intervened to place the parent banks under a conservatorship. Thereafter, the day-to-day operations of the parent banks were carried out by people appointed by the ECCB’s monetary council, of which the first respondent, the Chief Minister of Anguilla, was and remains a member. Over the following three years between 2013 and 2016, a rescue package was devised by the Government of Anguilla (“the government”) together with the ECCB and those working in the parent banks. In outline, the rescue package, known as the resolution plan, involved transferring accounts held by customers in the parent banks over to a newly incorporated bank called the National Commercial Bank of Anguilla (“the new bank”) which was wholly owned by the government. This transfer was, however, limited to the parent banks’ liability for the first $2.8 million in each deposit account. If the customer had more than $2.8 million in their account with either the National Bank or the Caribbean Bank, the liability for the excess was placed in a depositor protection trust (“DPT”). The effect of that was that the balance in the customer’s account in excess of $2.8 million would gradually be paid off (with interest) over a ten year period, largely using money allocated to the DPTs by the government. A suite of legislation was enacted by the House of Assembly and assented to by Her Excellency the then Governor in preparation for the implementation of the resolution plan (at para. 2).

But the appellants’ accounts were never transferred, either to the new banks or the depositor protection trust. Understandably, they sought judicial review, albeit only after a long, fruitless effort to obtain information about why their accounts had not be transferred. First, however, they had to seek permission to bring a judicial review claim. This was unsuccessful, in large part because of the reticence on the part of the government to share relevant information.

The Privy Council advised that the appeal should be allowed. There are two interesting points.

First, the determination of whether there is an arguable case is a question of law, reviewable for correctness. It is not an exercise of discretion subject to deference on appellate review.

The arguable case test was described in Attorney General of Trinidad and Tobago v Ayers-Caesar [2019] UKPC 44, at para. 2:

The test to be applied is the usual test for the grant of leave for judicial review. The threshold for the grant of leave to apply for judicial review is low. The Board is concerned only to examine whether [the applicant for judicial review] has an arguable ground for judicial review which has a realistic prospect of success: see governing principle (4) identified in Sharma v Brown-Antoine [2006] UKPC 57; [2007] 1 WLR 780, para 14. Wider questions of the public interest may have some bearing on whether leave should be granted, but the Board considers that if a court were confident at the leave stage that the legal position was entirely clear and to the effect that the claim could not succeed, it would usually be appropriate for the court to dispose of the matter at that stage.

This test is used in many jurisdictions where permission or leave is required to appeal or judicially review administrative decisions.

Determining whether this test has been met is legal in nature and, as a result, no deference is due to the first-instance judge. It is a question on which the appellate court can step into the shoes of the judge (Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3, [2012] 1 S.C.R. 23, at para. 247):

Deciding whether there is an arguable ground for judicial review is not an exercise of discretion. Accordingly, when the judge in the present proceedings refused leave to apply for judicial review on the ground that there was no arguable ground for judicial review with a realistic prospect of success (or, as he put it, possibly pitching the test somewhat higher, “a good arguable case with a reasonable prospect of success”), he was not exercising a discretion. It follows that, on the appeal against his decision, the Court of Appeal was not reviewing an exercise of discretion. It should not, therefore, have confined itself to the limited grounds on which the exercise of discretion might be reviewed on appeal, but should have considered whether the judge had erred in concluding that there was no arguable ground for judicial review. If it concluded that he had, it should then have re-considered the matter for itself. In approaching the appeal as a review of the exercise of discretion, the Court of Appeal accordingly erred in law. It is therefore necessary for the Board to consider the question anew (at para. 84).

Second, the government had failed to respect its duty of candour. Lord Reed and Lady Rose restated the general principles relating to candour in judicial review proceedings:

Judicial review proceedings are not conducted in the same way as ordinary disputes between private parties concerned to protect their competing interests. The supervisory jurisdiction is designed to protect the public interest in the lawful use of the powers conferred under public law, as well as the private interests of those who may be affected by the abuse of those powers. It is intended to secure the constitutional value of the rule of law, to which public authorities, and the other parties to judicial review proceedings, are or should be committed. In consequence, the parties to such proceedings are expected to ensure that the court is in possession of all the information which it requires to decide the case correctly. This places a particular obligation upon parties in situations where it is not possible for the court to assess the merits of an issue that has been raised unless the parties in question (usually the public authority against whom the claim is brought, but potentially another party to the proceedings) furnish the court with information which they alone are in a position to provide.

This obligation, usually described as the duty of candour, is well established. For example, in Bahamas Hotel Maintenance & Allied Workers Union v Bahamas Hotel Catering & Allied Workers Union [2011] UKPC 4, Lord Walker, giving the judgment of the Board, said at para 23 that judicial review proceedings “are meant to be conducted with cooperation and candour”. In Graham v Police Service Commission [2011] UKPC 46, Sir John Laws said at para 18 that it “is well established that a public authority, impleaded as respondent in judicial review proceedings, owes a duty of candour to disclose materials which are reasonably required for the court to arrive at an accurate decision”. More recently, in Pyaneandee v Leen [2024] UKPC 27, Lady Simler said at paras 42 and 47 (quoting Laws LJ in R (Quark Fishing Ltd) v Secretary of State for Foreign and Commonwealth Affairs [2002] EWCA Civ 1409, para 50) that a respondent to a judicial review claim is under “a very high duty … to assist the court with full and accurate explanations of all the facts relevant to the issue the court must decide”. Breach of the duty may (but will not necessarily) lead to the court drawing inferences which are adverse to the party in breach (R v Civil Service Appeal Board, Ex p Cunningham [1992] ICR 816, 822–824), as well as to the grant of orders for disclosure, or orders for costs to mark the court’s disapproval of the conduct of the party concerned (at paras. 89-90).

Critically, a lack of candour is relevant in determining whether permission ought to have been granted (at para. 93, citing Treasury Holdings v National Asset Management Agency [2012] IEHC 66). Here, the lack of candour (at paras. 94-101) assisted the Privy Council in coming to the conclusion that leave ought to have been granted because an arguable case for judicial review had been established. The lesson for decision-makers under the authority of the Privy Council and UK Supreme Court is: be candid. The lesson for the rest of us is that candour on the government’s part facilitates judicial review and helps to secure the rule of law (see further here).

This content has been updated on April 25, 2025 at 15:39.