From the Bench: When security for costs becomes a human rights issue

‘Everyone has a right of access to court’ is a phrase that is often repeated like a mantra, under the assumption that this right is absolute.

While this right is today considered to form part of the right to a fair hearing (because there can be no hearing without being able to lodge a court case in the first place), it is not an unlimited right.

The state is deemed to have a wide margin to regulate access to court through measures serving a legitimate purpose, such as through the laws of civil procedure. Immediate examples that come to mind are restrictions on minors to bring a court case or the adherence to certain procedural formalities.

Procedural formalities pose a particular challenge, since a legitimate legal tool may result in undue oppression if applied too formally. A legitimate law may thus have unlawful effects in an individual case.

A good recent illustration of this was the recent judgment delivered by the European Court of Human Rights (ECHR) in Strasbourg in the names AJD Tuna Ltd v Malta. The case concerned the alleged violation of the right of access to court, enshrined in Article 6(1) of the European Convention on Human Rights  due to the excessively formalistic application, by the Maltese courts, of the laws regulating security for costs in civil appeal proceedings.

At the time the incident took place, Malta’s Code of Organisation and Civil Procedure (COCP) required the payment of a security for costs within 12 months from the date of notification of the amount to be deposited or, if the appeal is to be heard earlier, not later than two days before the date set for the hearing. Failure would result in the appeal being declared abandoned. It should be highlighted that following amendments in 2021, the law now requires payment to occur within three months from notification of the amount to be deposited.

AJD Tuna Ltd had lodged proceedings against the Director for Agriculture concerning the quote on bluefin tuna fishing. In 2015, it lost the case at first instance and appealed. Five years later, on 19 June 2020, the notice to pay the security for costs and the notice of the first appeal hearing were served on an employee of a sister company.

Due to this blunder, the company’s director only became aware of the documents late on Friday 26 June 2020. The hearing was set for Tuesday 30th June. Since the court registry was closed over the weekend and on Monday 29th (it being a public holiday), the company was unable to pay the deposit within the 2 days stipulated by law. Nevertheless, at the hearing its director informed the Court of Appeal that he could pay the deposit on the spot. Considering the circumstances and deeming the delay to pay to be the result of the company’s own negligence, the court refused and declared the appeal abandoned by applying the law to the letter.

This decision was confirmed by the courts of constitutional jurisdiction in proceedings initiated by the company. Subsequently, the company turned to the ECHR, where it alleged a violation of its right of access to court under Article 6 of the ECHR due to the excessively formalistic application of the law in its case. It noted in particular that in similar cases, the courts normally closed an eye and postponed the appeal for a few minutes to allow the security for costs to be paid in the court’s registry.

The ECHR had to assess whether there was a breach of this right due to the particularly strict construction of the procedural law in question. It underlined that, in principle, the law was sound because it served the legitimate aim of the good administration of justice. Indeed, the security for costs was required to be paid to ensure that appeals were not filed vexatiously, amongst other reasons. It also underlined the company’s mistake in not seeing the notification to pay earlier, despite it having reached its offices.

However, the ECHR held that there were specific circumstances in this case which could not be ignored. Notably, there had already been a five-year delay by the Maltese courts to appoint the first appeal hearing, which had already been found to have breached the company’s right to a fair hearing within reasonable time by the Constitutional Court.

Another relevant factor was that the intended time limit to pay the security for costs was 12 months, but in this case it was reduced to merely seven days ‘due to the sudden request for costs just two weeks before the hearing and the public holiday following the weekend’.

Finally, the company’s representative was present in court for the hearing and indicated his willingness to pay the deposit there and then, clearly showing his interest in the appeal and the availability of funds – a course of action often accepted by the Maltese courts before.

The ECHR therefore found that there had been a violation of Article 6(1) of the ECHR because the Maltese courts had applied the law to the letter with no regard to other relevant circumstances in this specific case, and thus delivered decisions that were disproportionate to the legitimate aim pursued by the law. The excessively formalistic application of the relevant rules by the courts ‘ceased to serve the aims of “legal certainty” and the “proper administration of justice” but rather formed a sort of barrier” preventing the company from having its appeal heard on the merits.

This case demonstrates how the right of access to court is not absolute and unlimited. Nevertheless, restrictions on this right must always serve a legitimate purpose and be proportionate to the aim they pursue. It indicates that courts should take full account of all the circumstances of the case to ensure that such restrictions are applied in a fair manner, particularly due to the drastic consequences of a case being thrown out. Otherwise, one runs the risk of turning a legitimate legal instrument into an illegitimate barrier, to borrow the ECtHR’s words, between the person and the courts

David Chetcuti Dimech is junior associate,  Azzopardi, Borg and Associates Advocates.