Neutral Citation Number: [2010] EWCA Civ 40
Case No: C1/2009/0717
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN’S BENCH DIVISION
DIVISIONAL COURT 
LORD JUSTICE GOLDRING and MR JUSTICE SWEENEY
[2009] EWHC 762 (Admin)
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 04/02/2010
Before :

THE MASTER OF THE ROLLS	
LORD JUSTICE MAURICE KAY
and
LORD JUSTICE STANLEY BURNTON
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Between :

	THE QUEEN ON THE APPLICATION OF AMARAVATHI PERINPANATHAN	Appellant	
	- and -		
	CITY OF WESTMINSTER MAGISTRATES COURT (1)
and
THE METROPOLITAN POLICE COMMISSIONER (2)	

Respondents	

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- - - - - - - - - - - - - - - - - - - - -

Hugo Keith QC and Nicholas Yeo (instructed by Blackstones Solicitors) for the Appellant
Sir Geoffrey Nice QC and Russell Fortt (instructed by Metropolitan Police Legal Services) for the Second Respondent
The First Respondent did not appear and was not represented.

Hearing date: 9 December 2009
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Judgment

Stanley Burnton LJ : 
Introduction
1.	This is an appeal against the decision of a Divisional Court of the Queen’s Bench Division (Goldring LJ and Sweeney J) dismissing the Appellant’s claim for judicial review of the decision of the City of Westminster Magistrates’ Court refusing to make an order against the Metropolitan Police Commissioner for payment of her costs of her successfully defending proceedings brought by the Commissioner under section 298 of the Proceeds of Crime Act 2002 (“POCA”) for the confiscation of cash of some £150,000 belonging to her. The Appellant challenges both the correctness of the decision of the Divisional Court in City of Bradford Metropolitan District Council v Booth, CO/3219/99 and, if the principle enunciated by Lord Bingham LCJ in that case is good law, its application to proceedings under section 298 and in particular the present case.
The facts in summary
2.	On 25th April 2006 Mrs Perinpanathan’s daughter, who was 15, was stopped at Heathrow Airport. She was carrying some £150,000 in cash. The cash was detained by the police on the basis that there were reasonable grounds to suspect it was intended for use in unlawful conduct, namely terrorism. 
3.	Other facts of the case can be taken from Goldring LJ’s judgment in the Divisional Court:
4.	The daughter had some £153,000 in Sterling and dollars. The claimant went to Heathrow to meet her daughter from the flight. The daughter was interviewed on the day of arrest. She made a number of what are described as “material assertions”. The claimant had given her the money at the airport on 23rd April 2006 which she then took to Singapore on a flight that day. She stated that her mother, the claimant, ran a foreign exchange business. When asked whether she travelled alone to Singapore she confirmed that she had. She did not mention there had been any intention that she would be accompanied. She was asked whether she had touched the cash when it was packed and confirmed that she had not dealt with it. She said that she was going to meet her uncle in Singapore. He was going there from Sri Lanka, where she was going to stay for two days before returning to the United Kingdom. She was to give the money to her uncle for the use of a foreign exchange company called Aramex International. In the event that her uncle did not show up at the airport, she was to meet a friend of her uncle called Mr Habib. She did not know what Mr Habib looked like. When she arrived in Singapore she was refused entry because her passport was not valid for the requisite six months.
5.	The claimant was also interviewed. She said, among other things, that she had been self‑employed, dealing in money exchange since 1986. She had packed her daughter’s bag with the money which was taken to Singapore and had placed in the bag documents showing that the money had come from three money service bureaus. She appeared to state that her daughter had collected some of the cash on the previous Saturday. She thought that her daughter’s airline ticket cost £479. She stated that the money was being transferred on behalf of three different money service bureaus, namely: £27,358 on behalf of the Anglo‑Asian Mini Mart UK; £46,000.14 on behalf of Abby Exchange Limited (AEL); and the remainder from a man named Manivan, who ran a bureau called Mummys. All the money had been collected from the money bureaus in Sterling. She had changed some of it into Euros and dollars due to the fact that she did not have enough cash flow. 
6.	The claimant said that she had originally expected her daughter to travel to Singapore with a friend named Ruben Krischner, but this arrangement did not proceed because they arrived a bit late at the airport and the ticket was too expensive. The claimant said she was unable to travel to Singapore herself. She had previously transferred funds using a company called Linkafax, but around three weeks before the money was seized that company had stopped transferring money. She had not used a bank transfer because of the charges that would be incurred in doing so. The seized cash was to be passed to a company called Aramex International in Singapore. It was to be exchanged for Indian or Sri Lankan rupees. The cash would be sent to India or Sri Lanka for transmission to the intended recipients. It was to be exchanged in Singapore because the exchange rate was better in that country.
7.	In a subsequent interview, the claimant said that she charged £100 to her customers, on top of the other charges which she incurred of £250. Her profit margin, it seems, would therefore be between £100 and £200.
8.	In June 2006 two of the money transfer businesses mentioned by the claimant provided records, including details of the original senders of the money and the intended recipients of the cash. Subsequently, so did the third.
9.	The police obtained various statements. They included statements from the owner of Mummys, the owner of one of the other bureaus, AAMM, indeed the owners of all three money exchange bureaus. There was also a statement from the First Secretary of the Sri Lankan High Commission in London. It provided a list of authorised currency dealers in Sri Lanka. It confirmed that it is a criminal offence in Sri Lanka to act without authorisation as a foreign exchange dealer or money remitter, and that any person arriving in Sri Lanka with the equivalent of 10,000 US dollars is required to declare this fact to the authorities. Neither the claimant nor Aramex appeared on the list, although there was a company called Armex Money Changers on the list.
10.	There was a statement from somebody called Durrani, the Managing Director of Link FX, who confirmed that his company had regularly transferred funds to Aramex on behalf of the claimant. He said that the claimant was a long standing customer who transferred about £10 million every year. He confirmed that he had received legal advice from his lawyers to cease transactions which were destined for Sri Lanka and had told the claimant of this in April 2006. He said that he would have charged £382.50 to change the £153,000.
11.	The police also relied upon a paper which spoke, among other things, of the funding methods of the LTTE group in Sri Lanka. Those methods included intimidation of Sri Lankans living in the United Kingdom.
12.	There was also a statement by a police officer to the effect that the owner of Mummys had been stopped in November 2003. He was with his brother. His brother told the police officers who had stopped them that he had fought for the Tamil Tigers but now feared them because he had left their organisation.
13.	The claimant’s evidence was served in advance. It consisted of a single document, namely a statement. There was also, prior to the hearing, evidence which analysed the documents provided by Mummys, the money transfer business which it was alleged provided the majority of the seized cash.
14.	As this is not a case stated, the court does not have detailed reasons for the Magistrates’ decisions. However, both parties agree that there are clear indications of their reasoning as far as costs are concerned. Mr Mullins, who was counsel for the second interested party, made a note to this effect: 
“We have had a two day hearing. We have listened very carefully. Mr Durrani was very useful as a witness as he was able to give us the structure of the money changing business. We were asked by the prosecution (sic) to infer that money was destined for LTTE. We find no direct evidence of a link and so draw no such inference. Application dismissed and money to be returned forthwith with interest. 
No order for costs on the basis that the application was reasonably made.”
15.	The legal advisor’s notes, such as they are, indicate that the court had drawn to its attention the case of City of Bradford Metropolitan District Council v Booth, CO/3219/99. The note of the legal advisor stated that “18 months, police still had money. We say costs should follow the event”, and the justices ruled that “No costs awarded. Case properly brought by the police”.
4.	There are additional facts set out in the skeleton argument of the Respondent, which make it even clearer why the police formed their suspicion that the cash that was seized had been intended for unlawful purposes, namely for transfer to and use by the Liberation Tigers of Tamil Eelam (the LTTE, also known as the Tamil Tigers, a terrorist organisation named as such by the EU and proscribed under the Terrorism Acts 2000 and 2006).
5.	What is sufficient for the purposes of this appeal is that the Appellant does not challenge the finding of the magistrates that the police had reasonable grounds for their suspicion when they seized the cash that it had been intended for use in unlawful conduct, and that they had reasonable grounds to believe that the cash had been intended for such use when they made their application for its forfeiture under section 298 of POCA. It is perhaps significant that the Appellant did not at any time apply for the release of the cash under section 297, under which she would have been entitled to its release if she could have shown that there were no reasonable grounds for the police’s suspicion.
6.	I would nonetheless add that in a case such as the present the appropriate procedure to challenge the decision of the magistrates was by an appeal by case stated, rather than by judicial review. The case stated should have provided the Court with the detailed findings of fact of the magistrates and their more detailed reasons for their decision on costs. The Appellant’s own skeleton argument states that it was the oral evidence of a Mr Durrani that persuaded the justices that the cash had been intended for lawful use.
The applicable statutory provisions
7.	The relevant provisions of POCA are contained in Part 5. Sections 240 and 241 are so far as relevant as follows:
240. General purpose of this Part 
 (1) This Part has effect for the purposes of ‑‑ 
 (a) ….
 (b) enabling cash which is, or represents, property obtained through unlawful conduct, or which is intended to be used in unlawful conduct, to be forfeited in civil proceedings before a magistrates’ court or (in Scotland) the sheriff. 
(2) The powers conferred by this Part are exercisable in relation to any property (including cash) whether or not any proceedings have been brought for an offence in connection with the property. 
241. ‘Unlawful conduct’ 
 (1) Conduct occurring in any part of the United Kingdom is unlawful conduct if it is unlawful under the criminal law of that part. 
 (2) Conduct which ‑‑ 
 (a) occurs in a country outside the United Kingdom and is unlawful under the criminal law of that country, and 
 (b) if it occurred in a part of the United Kingdom, would be unlawful under the criminal law of that part 
is also unlawful conduct. 
 (3) The court or sheriff must decide on a balance of probabilities whether it is proved ‑‑ 
 (a) that any matters alleged to constitute unlawful conduct have occurred, or 
 (b) that any person intended to use any cash in unlawful conduct. 
8.	The seizure of cash is the subject of section 294 and following sections:
294. Seizure of cash 
 (1) A customs officer or constable may seize any cash if he has reasonable grounds for suspecting that it is ‑‑ 
 (a) recoverable property, or 
 (b) intended by any person for use in unlawful conduct. 
 (2) …
(3) …
295. Detention of seized cash 
 (1) While the customs officer or constable continues to have reasonable grounds for his suspicion, cash seized under section 294 may be detained initially for a period of 48 hours. 
 (2) The period for which the cash or any part of it may be detained may be extended by an order made by a magistrates’ court or (in Scotland) the sheriff; but the order may not authorise the detention of any of the cash ‑‑ 
 (a) beyond the end of the period of three months beginning with the date of the order, 
 (b) in the case of any further order under this section, beyond the end of the period of two years beginning with the date of the first order. 
 (3) A Justice of the Peace may also exercise the power of a magistrates’ court to make the first order under subsection (2) extending the period. 
 (4) An application for an order under subsection (2)‑‑ 
 (a) in relation to England and Wales and Northern Ireland, may be made by the Commissioners of Customs and Excise or a constable, 
 (b) in relation to Scotland, may be made by the Scottish Ministers in connection with their functions under section 298 or by a procurator fiscal 
and the court, sheriff or justice may make the order if satisfied, in relation to any cash to be further detained, that either of the following conditions is met. 
 (5) The first condition is that there are reasonable grounds for suspecting that the cash is recoverable property and that either -
 (a) its continued detention is justified while its derivation is further investigated or consideration is given to bringing (in the United Kingdom or elsewhere) proceedings against any person for an offence with which the cash is connected, or 
 (b) proceedings against any person for an offence with which the cash is connected have been started and have not been concluded. 
 (6) The second condition is that there are reasonable grounds for suspecting that the cash is intended to be used in unlawful conduct and that either - 
 (a) its continued detention is justified while its intended use is further investigated or consideration is given to bringing (in the United Kingdom or elsewhere) proceedings against any person for an offence with which the cash is connected, or 
 (b) proceedings against any person for an offence with which the cash is connected have been started and have not been concluded. 
 (7) …
 (8) An order under subsection (2) must provide for notice to be given to persons affected by it . . . 
297 Release of detained cash 
(1) This section applies while any cash is detained under section 295. 
(2) A magistrates’ court or (in Scotland) the sheriff may direct the release of the whole or any part of the cash if the following condition is met. 
(3) The condition is that the court or sheriff is satisfied, on an application by the person from whom the cash was seized, that the conditions in section 295 for the detention of the cash are no longer met in relation to the cash to be released. 
(4) A customs officer, constable or (in Scotland) procurator fiscal may, after notifying the magistrates’ court, sheriff or justice under whose order cash is being detained, release the whole or any part of it if satisfied that the detention of the cash to be released is no longer justified. 
298. Forfeiture 
 (1) While cash is detained under section 295, an application for the forfeiture of the whole or any part of it may be made ‑‑ 
 (a) to a Magistrates’ Court by the Commissioners of Customs and Excise or a constable, 
 (b) (in Scotland) to the sheriff by the Scottish Ministers. 
 (2) The court or sheriff may order the forfeiture of the cash or any part of it if satisfied that the cash or part ‑‑ 
 (a) is recoverable property, or
 (b) is intended by any person for use in unlawful conduct. 
 (3) But in the case of recoverable property which belongs to joint tenants, one of whom is an excepted joint owner, the order may not apply to so much of it as the court thinks is attributable to the excepted joint owner’s share. 
 (4) Where an application for the forfeiture of any cash is made under this section, the cash is to be detained (and may not be released under any power conferred by this Chapter) until any proceedings in pursuance of the application (including any proceedings on appeal) are concluded. 
9.	It is to be noted that there is a limit to the duration of the detention of cash under section 295. At some time, therefore, the police must either make an application for its forfeiture under section 298 or return it to the person who, in the absence of an order under section 295 or section 298, is entitled to it.
10.	Section 302 of POCA also has some relevance:
302. Compensation 
 (1) If no forfeiture order is made in respect of any cash detained under this Chapter, the person to whom the cash belongs or from whom it was seized may make an application to the magistrates’ court or (in Scotland) the sheriff for compensation.
(2) If, for any period beginning with the first opportunity to place the cash in an interest-bearing account after the initial detention of the cash for 48 hours, the cash was not held in an interest-bearing account while detained, the court or sheriff may order an amount of compensation to be paid to the applicant. 
(3) The amount of compensation to be paid under subsection (2) is the amount the court or sheriff thinks would have been earned in interest in the period in question if the cash had been held in an interest-bearing account. 
(4) If the court or sheriff is satisfied that, taking account of any interest to be paid under section 296 or any amount to be paid under subsection (2), the applicant has suffered loss as a result of the detention of the cash and that the circumstances are exceptional, the court or sheriff may order compensation (or additional compensation) to be paid to him. 
(5) The amount of compensation to be paid under subsection (4) is the amount the court or sheriff thinks reasonable, having regard to the loss suffered and any other relevant circumstances. 
…
The italics in subsection (4) are mine.
11.	The Magistrates’ Courts (Detention and Forfeiture of Cash) Rules 2002 provides that an application for forfeiture is to proceed by way of complaint. Rule 11(2) is as follows:
Subject to the foregoing provisions of these Rules, proceedings on such an application shall be regulated in the same manner as proceedings on a complaint, and accordingly for the purposes of these Rules, the application shall be deemed to be a complaint, the applicant the complainant, the respondents to be defendants ….
12.	It follows that the power of the magistrates’ court to make an order for costs in relation to proceedings under section 298 of POCA is that conferred by section 64 of the Magistrates’ Court Act 1980:
Power to award costs and enforcement of costs 
 (1) On the hearing of a complaint, a Magistrates’ Court shall have power in its discretion to make such order as to costs ‑‑ 
 (a) on making the order for which the complaint is made, to be paid by the defendant to the complainant; 
 (b) on dismissing the complaint, to be paid by the complainant to the defendant, 
as it thinks just and reasonable . . . 
(2) The amount of any sum ordered to be paid under subsection (1) above shall be specified in the order, or order of dismissal, as the case may be.
….
(5) The preceding provisions of this section shall have effect subject to any other Act enabling a magistrates’ court to order a successful party to pay the other party’s costs.
The principle in City of Bradford v Booth
13.	City of Bradford v Booth was a decision of the Divisional Court on an appeal by way of case stated from a decision of justices to award costs against a local authority. The respondent, who was the beneficiary of the costs order made by the justices, did not appear. 
14.	Lord Bingham LCJ, with whose judgment Silber J agreed, said:
1. The issue in this appeal by case stated is whether justices erred in the exercise of their discretion by awarding costs against a local authority on a successful complaint against a vehicle licensing decision of the local authority when the local authority had not, in making the decision appealed against, acted unreasonably or in bad faith.
15.	Lord Bingham set out the facts of the case, the parties’ contentions and certain authorities, and continued:
22. It seems to me that the justices in this case misdirected themselves, first, in relying on a principle that costs should follow the event, that misdirection being compounded by their view that the reference in section 64 to the order being just and reasonable applied to quantum only. On the other hand, in my judgment the submissions made by Mr Blair‑Gould on behalf of the local authority go too far the other way since to give effect to the principle for which he contends would deprive the justices of any discretion to view the case in the round which is in my judgment what section 64 intends.
23. I would accordingly hold that the proper approach to questions of this kind can for convenience be summarised is three propositions:
1. Section 64(1) confers a discretion upon a magistrates’ court to make such order as to costs as it thinks just and reasonable. That provision applies both to the quantum of the costs (if any) to be paid, but also as to the party (if any) which should pay them. 
2. What the court will think just and reasonable will depend on all the relevant facts and circumstances of the case before the court. The court may think it just and reasonable that costs should follow the event, but need not think so in all cases covered by the subsection. 
3. Where a complainant has successfully challenged before justices an administrative decision made by a police or regulatory authority acting honestly, reasonably, properly and on grounds that reasonably appeared to be sound, in exercise of its public duty, the court should consider, in addition to any other relevant fact or circumstances, both (i) the financial prejudice to the particular complainant in the particular circumstances if an order for costs is not made in his favour; and (ii) the need to encourage public authorities to make and stand by honest, reasonable and apparently sound administrative decisions made in the public interest without fear of exposure to undue financial prejudice if the decision is successfully challenged. 
The principal contentions of the parties
16.	City of Bradford v Booth was of course binding on the Divisional Court in the present case, absent a subsequent decision of the Divisional Court, the Court of Appeal or the House of Lords (now the Supreme Court) overruling or inconsistent with it. It is not, however, binding on this Court. 
17.	In these circumstances, on behalf of the Appellant, Mr Hugo Keith QC made the following submissions.
(1)	The propositions set out by Lord Bingham LCJ in paragraph 23 of his judgment do not and should not represent the correct approach to orders for costs in proceedings such as those that were the subject of that case. 
(2)	Section 64 is concerned with the quantum of costs, if any, to be paid to a party, not the allocation of liability for costs.
(3)	Alternatively, on its true construction, section 64 gives a “steer” to the court, indicating that the normal order for costs is one in favour of the successful party.
(4)	In his judgment in the City of Bradford case Lord Bingham LCJ referred only to authorities in alcohol licensing cases. In those cases, the court had applied differently worded, and in Mr Keith’s submission wider, statutory provisions than section 64. Lord Bingham had failed to take the legislative difference into account.
(5)	It is irrational for a different costs principle to apply in civil proceedings in the magistrates’ court in proceedings involving public authorities from the rule applied in the County Court and the High Court. In those courts, the fact that a public authority acted reasonably does not justify a refusal to make an order for costs against it.
(6)	In the present case, the police were not acting in a neutral capacity, as they do in licensing cases, seeking to put relevant facts before the magistrates. They were themselves a full party to the proceedings. They had the burden of proving that the cash had been intended to be used for an unlawful purpose; they had failed to establish that. As the successful party to the litigation, absent a sufficient reason why the innocent Appellant should be deprived of her costs, she was entitled to an order for costs against the police.
18.	For the Respondent, Sir Geoffrey Nice QC did not (indeed, could not) dispute that in the Bradford case Lord Bingham had referred only to authorities in cases of liquor licensing. However, he submitted that there was no relevant difference between the applicable legislative provisions in those cases and section 64. The authorities in proceedings subject to the CPR have to be considered in the light of CPR Part 44.3(2), which requires good reason to depart from an order that costs follow the event. He contended that, since the police had acted in accordance with their public duty, the magistrates had been entitled, if not bound, to refuse to make an order for costs against them in favour of the Appellant notwithstanding her success in her application.
Discussion
19.	The starting point must be a consideration of section 64 and of the statutory provisions applicable in alcohol licensing and other cases. In my judgment, section 64 is concerned with both liability for costs and their amount. The only statutory restriction on the power of the magistrates is that they cannot make an order for costs against a successful party. This restriction explains its wording. It does not provide any “steer” or indication to the court that costs should follow the event, although in cases between private individuals that is likely to be the order failing good reason to deprive a successful party of some or all of his costs.
20.	The applicable statutory provision in the liquor licensing cases was section 193B(1) of the Licensing Act 1964:
On the hearing of any application under this Act relating to licensed premises or a seamen’s canteen, the licensing justices may make such order as they think just and reasonable for the payment of costs to the applicant by any person opposing the application or by the applicant to any such person.
21.	As indicated above, Mr Keith sought to distinguish this provision from section 64. Given my view of the effect of section 64, the only relevant difference is that section 64 precludes an order requiring a successful party to pay the costs of an unsuccessful party. The principle laid down in those cases is therefore relevant in the present context.
22.	The authorities to which Lord Bingham referred were R v Totnes Licensing Justices, ex p Chief Constable of Devon and Cornwall (1990) 156 JP 587, The Times, 28 May 1990, R v Merthyr Tydfil Crown Court, ex parte Chief Constable Dyfed Powys Police (unreported, 9 November 1998) and the judgment of the Divisional Court in Chief Constable of Derbyshire v Goodman and Newton (DC, unreported, 2 April 1998).
23.	In Totnes Roch J had quashed a decision of licensing justices to make an order for costs against the police in favour of a successful licensee the renewal of whose licence had been the subject of objection by the police. Roch J said:
In my judgment it was wrong for the justices to treat this matter as civil proceedings between two private litigants and to ignore the factor urged upon them by the solicitor appearing for the police authority, namely, that the police have a function which they are required to perform. They are required to supervise the proper conduct of the licensed premises and to object in those cases where there are good grounds for objecting to the renewal of the licence. That that is the police’s function is clearly demonstrated by the provisions in the Licensing Act which give the police power to enter licensed premises whether at the invitation of the licensee or not. 
In addition, in my view, the police authority must also bring to the attention of the licensing justices matters of which the police know and which can fairly and properly be said to amount to misconduct by the licensee or those for whom he is responsible ....
24.	That judgment was followed by Lightman J in the Merthyr Tydfil case, another alcohol licensing case. The same principle was applied by the Divisional Court in Goodman and Newton, in which the respondents had successfully appealed to the Crown Court against the revocation of their firearms licences. In that case, the applicable provision was rule 12(2) of the Crown Court Rules 1982, which conferred power of the Crown Court to “make such order for costs as it thinks just”. May LJ said:
It is of course important to say that decisions as to costs are discretionary and that any court or tribunal exercising such discretion is obliged to take into account all relevant circumstances. One such relevant circumstance was that this was indeed a police authority performing a statutory licensing function. This will not be determinative of all cases, but it is important that the tribunal takes into account that, generally speaking, a cost order adverse to such an authority would not be made unless there was some good reason for doing so, which was more than the fact that the other party to the contest had succeeded.
….
In my view, this is a borderline case so far as costs are concerned. I can certainly see some force in [counsel’s] submissions, but exercising afresh, as in my view we are entitled to do, the discretion which Judge Morrison exercised, I consider on balance that this is not a case where costs ought to have been ordered against the Chief Constable. He acted, as the judge held, in complete good faith and, in those circumstances, the costs order ought not to have been made against him.
25.	It seems to me, therefore, that despite the differences in statutory provision, these authorities fully justified the conclusion of Lord Bingham LCJ in the Bradford case.
26.	Furthermore, licensing is not the only context in which a similar principle has been considered to be applicable.  The context of R v Uxbridge Justices, ex p Commissioner of Police of the Metropolis [1981] 1 QB 829 was closer to the present. The applicant had been arrested and sentenced to 18 months’ imprisonment for handling stolen currency notes from travellers at an airport. In the course of investigating the offences the police came into possession of, and held, money in the form of currency notes which they had found in his house. The applicant claimed that the money belonged to him. While he was in prison he applied to justices for the delivery of the money to him pursuant to section 1 (1) of the Police (Property) Act 1897 and a summons in the form of a complaint was issued addressed to the Commissioner of Police of the Metropolis for attendance to answer the complaint. The police did not oppose the application at the hearing. The justices ordered the return of the money to the applicant and awarded him £350 costs. The police sought judicial review of the order for costs on the sole ground that the procedure by way of complaint had not been appropriate or available. They did not seek to impugn the exercise by the justices of their discretion as to costs if they had one. Nonetheless, the Court of Appeal commented on the order for costs that had been made. Lord Denning MR said, at 836:
I must say that I am most surprised by the order of the justices. The police had done nothing wrong at all. They had taken possession of these currency notes - absolutely properly - because they were reasonably suspected by them to have been stolen. They retained them pending trial equally properly. They were absolutely right not to deliver them without a court order. If they had given them up to Mr. Prasad and the true owners had turned up afterwards, the police would have been liable in damages to the true owners. Only by a court order would they be protected. Viewed in the eyes of the civil law, the police were bailees of the goods. Their custody was like that of a sheriff - custodia legis. Faced with a claimant, the sheriff is entitled to inter-plead and to get his costs as a first charge so long as he acts properly, but he is never bound to pay any costs. So also when the police have goods in custodia legis, and act perfectly properly in regard to them, they should not be ordered to pay costs.
Lord Denning would have held that the justices had no jurisdiction to award costs, but Sir George Baker and Sir Stanley Rees disagreed. However, both commented on the award of costs by the justices. Sir Stanley Rees said:
The proceedings before us do not include any issue or argument as to the propriety of the exercise of the discretion of the justices to make the order for costs which they did in favour of the complainant. Nevertheless, I share the considerable degree of unease in regard to the order for costs which is evident in the judgments delivered by Lord Denning M.R. in this court and in the judgments delivered in the Divisional Court by Donaldson L.J. and Kilner Brown J. [1981] 1 W.L.R. 112. If, as I am satisfied is the case, the justices are empowered to make an order for costs in proceedings by complaint and summons under the Police (Property) Act 1897 where there is a complainant and a defendant, their discretion must be exercised having regard to the exceptional and perhaps unique nature of the order sought and to the respective roles of the parties concerned. In a case in which the police have clearly indicated that they do not oppose the making of the order sought and are merely attending before the justices to confirm their attitude and to ensure that an appropriate order is made before the property is delivered to the complainant, it would indeed be difficult to justify any order for costs against the police. Even in a case in which the police do not consent to the order sought by the claimant or claimants but attend the hearing and the justices are satisfied that it was reasonable for them to do so in order to assist the court to assess the validity of the claim or claims made to the ownership of the property, it would be proper for no order for costs to be made against the police, even if the order for delivery of the property sought by a claimant were made. In short, in my judgment, the proper approach to an application for costs in such proceedings should most certainly not be on the basis that costs should simply follow the event, but rather that the discretion to award them should be sparingly exercised, having regard to the exceptional nature of the role of the police as custodians of the property in issue, who require an order of the court to protect them before the delivery up of the property to a claimant.
Sir George Baker said, at 844:
I have had the advantage of reading the judgment about to be delivered by Sir Stanley Rees and wish to say that I entirely agree with him about the undesirability of justices making orders for costs in cases like the present.
27.	In Mercer v Oldham [1984] Crim LR 232, the respondent had successfully applied to the magistrates’ court, by way of complaint, for the return of his car, which he had lent to his brother-in-law, who had used it in a burglary, following its confiscation following the brother-in-law’s conviction. The magistrates found that the respondent had not known of his brother-in-law’s intentions, and ordered the police to return the car to the respondent. They  also found that the police had taken no steps to ascertain the respondent’s state of knowledge, and they ordered the police to pay his costs. The police appealed by case stated against the order for costs. The appeal was dismissed, in my view on the basis that the conduct of the police justified the order. According to the brief report of the judgment of the Divisional Court, in the course of judgment the Court said:
In matters of this kind, it was of the utmost assistance to the justices that the police should be present at court, both to indicate whether or not they objected to the order being made, and to test the evidence of a claimant. In such circumstances, the justices would normally make no order for costs. But they did have a discretion, and if they considered that the police had gone beyond the usual rule merely assisting the justices, and actively opposed the order, then there was no reason why the justices should not, in the exercise of their discretion, order the police to pay costs. That was clearly what happened in the present case.
28.	The principle in the Bradford case has been consistently applied by the Divisional Court in licensing cases: see, e.g., R (Wilf Gilbert (Staffs) Ltd v Stafford Crown Court (unreported, 22 February 1999) (licensing of betting offices) and R (Cambridge City Council) v Alex Nestling Ltd [2006] EWHC 1374 (Admin) (liquor licensing). In Manchester City Council v Manchester Crown Court [2009] EWHC 1866 Burton J applied the principle to proceedings in which the local authority had unsuccessfully sought an anti-social behaviour order, on the basis that the application had been properly made but failed because of progress subsequently made by the respondents. Perhaps more importantly, the principle enunciated by Lord Bingham LCJ in the Bedford case was approved by this Court in Baxendale-Walker v the Law Society [2007] EWCA Civ 233 [2008] 1 WLR 426. That case concerned not licensing but the disciplinary functions of the Law Society. The Law Society had instigated disciplinary proceedings against the solicitor in the Solicitors’ Disciplinary Tribunal. One of the two allegations of conduct unbefitting a solicitor was not proved but the second was admitted and the tribunal found the solicitor guilty of unbefitting conduct and suspended him from practice for three years. Pursuant to section 47(2) of the Solicitors Act 19741 , the tribunal made an order that the Law Society pay 30% of the solicitor’s costs of the proceedings, on the basis that the first allegation had not been proved and a greater proportion of the solicitor’s costs had been incurred in defending that allegation. The solicitor appealed to the Divisional Court of the Queen’s Bench Division against the sentence of suspension from practice and the Law Society cross-appealed against the order for costs. The Divisional Court dismissed the solicitor’s appeal but allowed the Law Society’s cross-appeal and ordered the solicitor to pay 60% of the Law Society’s costs, holding that the principles relating to costs in proceedings brought in the public interest in exercise of regulatory functions differed from those which applied to ordinary civil litigation. The solicitor’s appeal to the Court of Appeal was dismissed. Sir Igor Judge P gave the judgment of the Court. Referring to the decision under appeal, he said:
29 The tribunal’s decision was based on the conclusion that the first allegation made against the solicitor by the Law Society was not established, and that a greater proportion of his own costs arose from his defence to this allegation. The order was not made on the basis that the Law Society had abused the process or proceeded against the solicitor for improper motives. These grounds of complaint made by the solicitor were rejected by the tribunal. The tribunal’s reasoning was not detailed. It merely acknowledged that the solicitor: 
“had been successful in his defence of the first allegation and in such circumstances it would not be right that [Mr Baxendale-Walker] pay the Law Society’s costs. It would be right that the Law Society pay a proportion of Mr Baxendale-Walker’s costs.”
This was fixed at 30%. The Divisional Court concluded that the costs order was unjustified. Moses LJ approached the problem on the basis that it was not in dispute that in bringing the proceedings against the solicitor the Law Society was acting as a disciplinary body, or regulator, taking proceedings in the public interest in the exercise of its public function. Accordingly, he concluded that the principles relating to costs differed from those which applied in ordinary civil litigation. He continued [2006] 3 All ER 675, para 43: 
“Absent dishonesty or a lack of good faith, a costs order should not be made against such a regulator unless there is good reason to do so. That reason must be more than that the other party had succeeded. In considering an award of costs against a public regulator the court must consider on the one hand the financial prejudice to the particular complainant, weighed against the need to encourage public bodies to exercise their public function of making reasonable and sound decisions without fear of exposure to undue financial prejudice, if the decision is successfully challenged.”
30 These principles were said to derive from a number of decisions summarised by Jackson J in  R (Gorlov) v Institute of Chartered Accountants in England and Wales  [2001] ACD 393, paras 30-35, and three principles distilled by Lord Bingham of Cornhill CJ in  City of Bradford Metropolitan District Council v Booth  [2000] COD 338.
The Court referred to the contentions advanced on behalf of the solicitor, and continued:
39 In our judgment Jackson J was right to equate the responsibilities of the institute in  Gorlov’s  case [2001] ACD 393 with the regulatory actions of the licensing authority in Booth’s  case [2000] COD 338. As Bolton’s  case [1994] 1 WLR 512 demonstrates, identical, or virtually identical, considerations apply when the Law Society is advancing the public interest and ensuring that cases of possible professional misconduct are properly investigated and, if appropriate, made the subject of formal complaint before the tribunal. Unless the complaint is improperly brought, or, for example, proceeds as it did in Gorlov’s  case [2001] ACD 393, as a “shambles from start to finish”, when the Law Society is discharging its responsibilities as a regulator of the profession, an order for costs should not ordinarily be made against it on the basis that costs follow the event. The “event” is simply one factor for consideration. It is not a starting point. There is no assumption that an order for costs in favour of a solicitor who has successfully defeated an allegation of professional misconduct will automatically follow. One crucial feature which should inform the tribunal’s costs decision is that the proceedings were brought by the Law Society in exercise of its regulatory responsibility, in the public interest and the maintenance of proper professional standards. For the Law Society to be exposed to the risk of an adverse costs order simply because properly brought proceedings were unsuccessful might have a chilling effect on the exercise of its regulatory obligations, to the public disadvantage. Accordingly, Moses LJ’s approach to this issue did not go further than the principles described in this judgment.
40 In our judgment, in agreement with Moses LJ, the tribunal misdirected itself when it ordered the Law Society to pay part of the solicitor’s costs on the basis that the first allegation against him had failed and that costs should follow the event. This overlooked not only the public obligation of the Law Society, as we have analysed it, but the additional fact that the solicitor brought the proceedings in relation to both allegations on himself. At the same time the order ignored the costs incurred by the Law Society in relation to the successful pursuit and eventual admission of professional misconduct in relation to the second allegation.
29.	Mr Keith relied on the decisions of the Court of Appeal in Re Southbourne Sheet Metal Co. Ltd [1993] 1 WLR 244 and Jean Grimes v Crown Prosecution Service [2003] EWCA Civ 1814. Both were appeals from decisions of the High Court. In the Southbourne case, the Secretary of State for Trade and Industry had sought orders of disqualification against the director and a co-director under the provisions of the Company Directors Disqualification Act 1986. The Secretary of State’s summons was supported by an affidavit from one of the receivers of the company.
30.	In British Telecommunications plc v Office of Communications [2005] CAT 20, the Competition Appeal Tribunal considered the appropriate approach to costs in the regulatory field in question, concerned with the regulation of telecommunications under the Communications Acts 2003 and the Telecommunications (Interconnection) Regulations 1997. The dispute giving rise to the appeal had been between BT and Vodafone, which had supported the Office of Communications. Although BT had been successful, the tribunal refused to award it its costs. The Tribunal’s Rules conferred an unrestricted power to make such award of costs as it thought fit. The Tribunal said:
51. We note that this appeal was the first appeal brought under appellate regime established by the 2003 Act, and that formerly the procedure for appealing this type of dispute was a statutory appeal under the Telecommunications Act 1984 to which the costs provisions of the CPR applied.  However, CPR Part 44.3(2), which provides that the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party but the court may make a different order, is not replicated in the Tribunal’s Rules and consequently does not apply to the Tribunal.  Parliament has not created any presumption that in proceedings before the Tribunal costs should “follow the event”.  The Tribunal’s jurisdiction as to costs is mentioned in the White Book under the heading “Part 48 – Costs Special Cases” at  Part 48.12.10 without any further elaboration.
52. In our view, the flexible approach that the Tribunal has taken to the question of costs in appeals under the 1998  [Competition] Act is also appropriate in relation to appeals under the 2003 [Communications] Act.  As the Tribunal’s judgments in appeals under the 1998 Act make clear, there is no presumption under rule 55 that costs should necessarily be borne by the losing party.  In this case we take into account the following factors.
53. The present case arose under the 1997 Regulations which implemented in the United Kingdom Directive 97/33/EC, known as the Interconnection Directive.  Under Regulation 6(6) of the 1997 Regulations, the Director, OFCOM’s predecessor, was required, at the request of either party, to resolve “a dispute concerning interconnection between organisations” within six months of the date of a request to do so.  The direction made by the Director to resolve the dispute was required by Regulation 6(6) “to represent a fair balance between the legitimate interests of both parties”.  In exercising his duty under Regulation 6(6) the Director was further required to take into account the wide range of considerations set out at Regulation 6(8), including the interests of users, the relative market position of the parties, the public interest, the promotion of competition, and many other matters:  see paragraph 35 of the Tribunal’s judgment. 
54. The “dispute concerning interconnection” which the Director purported to resolve by the contested Direction of 23 June 2003 was prompted by a complaint by Vodafone as to the terms on which partial private circuits (PPC’s) should be supplied by BT to Vodafone for use as radio base station (RBS) backhaul circuits connecting Vodafone’s RBS to Vodafone’s MTX.  One main issue in the Direction, and the only issue argued on the appeal, was whether that involved “interconnection” within the meaning of the 1997 Regulations and the Interconnection Directive.
55. The dispute in this case was, therefore, one which the Director resolved pursuant to the then-applicable statutory procedure.  Having resolved the matter against BT, in our view OFCOM (which by then had inherited the Director’s function) was bound to appear before the Tribunal to defend BT’s appeal, against the contested Direction.  OFCOM, in our view, would have been in the same position had the Director reached the opposite view and OFCOM had been facing an appeal by Vodafone.
56. …
57. It is unrealistic, in our view, to suggest that OFCOM should have withdrawn the contested Direction following the lodging of BT’s appeal.  Apart from the fact that that might well have provoked an appeal by Vodafone, the issues in the present case were, in our view, extremely complicated, involving technical issues, and a complex body of European legislation, as the Tribunal’s judgment shows.  There was, as far as we know, no previous judicial authority on the issue we were asked to decide.  OFCOM’s submissions were ably and forcefully presented, and the arguments OFCOM put forward were, in our view, entirely reasonable ones notwithstanding that, in the end, we held that BT’s arguments should prevail.  However, there is no unreasonable conduct on OFCOM’s part or other respect in which OFCOM’s position is open to criticism.
58. We also bear in mind that in making the Direction the Director took into account what he believed to be wider benefits to the public interest such as greater network efficiency, facilitating innovation and investment in voice and data services, and ultimately benefits to end-users of mobile telephony services in terms of prices and quality (see e.g. S8 of the Direction).  This was a case in which wider public interests, and not just the private interests of BT, were at stake.
59. It is also apparent from the Direction that BT is the major supplier of RBS backhaul circuit links across the industry (paragraph 4.9).  Indeed, the Direction is based on the Director’s finding that BT has market power in that respect.  Although that aspect of the Direction is not necessarily accepted by BT, it was not contested in the present appeal.  BT’s success in this appeal in defending its market position, on the legitimate but nonetheless narrow legal ground that what was involved was not “interconnection”, has brought BT commercial benefits. BT’s submissions referred to “many millions of pounds” having been at stake.
60. It is also relevant in our view that in a regulated industry such as this, BT and the other principal parties to these proceedings will be in a constant regulatory dialogue with OFCOM on a wide range of matters.  The costs of maintaining specialised regulatory and compliance departments, and taking specialised advice, will not ordinarily be recoverable prior to proceedings.  We accept that the situation changes once proceedings before the Tribunal are on foot, by virtue of Rule 55 of the Tribunal’s Rules.  However, the question whether costs orders should be made in any particular case, or whether the costs should lie where they fall, arises against a background in which BT and the interveners are, in their own interests, routinely incurring regulatory costs which are not recoverable.
61. Furthermore, none of the parties have submitted that, if the Tribunal does not to make a costs order in their favour, they will have suffered a financial hardship by having brought the matter before the Tribunal.
62. In our view, we have to strike a balance between, on the one hand, the fact that BT has been successful, and on the other hand, the various considerations mentioned above.  Rule 55 gives the Tribunal a wide discretion.  Our judgment is that where OFCOM has determined a dispute in accordance with the procedure in the 1997 Regulations, and could have been appealed against by either side, it would not be right to order OFCOM to pay BT’s costs in circumstances where OFCOM defended the appeal entirely reasonably and wider public interests were involved.  BT has benefited commercially from the stance which it legitimately took.  We do not consider that BT will suffer material financial hardship if the costs of this case are treated as part of the general regulatory costs which BT incurs by virtue of the fact that it has significant market power.
63. We do not accept that, in those circumstances, our view as to costs would have a “chilling effect” on the bringing of appeals by companies in the position of BT.  On the contrary, we have some concern at this early stage of the Tribunal’s jurisdiction under the 2003 Act that an order against OFCOM would have a “chilling effect” in the opposite direction by making OFCOM less resolved to defend its decisions, or more ready to compromise, when faced with appellants with market power and large financial resources.  Any such pressure on OFCOM would not be in the public interest.
31.	As is clear from the judgment, the context of the proceedings before the Competition Appeal Tribunal was very different from the present. What is relevant to the present case is the decision that a public authority carrying out a public duty and acting reasonably was not be required to pay the costs of its successful opponent in litigation.
32.	 In Orton v Truro Crown Court and West Cornwall Magistrates’ Court [2009] EWHC 168 (Admin), the proceedings in question were, like the present, an application under section 298 of POCA for forfeiture of cash. The police’s application for a forfeiture order had been dismissed by the magistrates’ court, which had refused to make an order that they pay Mr Orton’s costs. The police appealed to the Crown Court against the magistrates’ refusal to make a forfeiture order. Their appeal was dismissed, but the Crown Court also refused to make any order for costs. The Crown Court judge explained the refusal to order the police to pay Mr Orton’s costs as follows:
My recollection is that we refused the respondent’s costs because he had done little or nothing to rebut the appellant’s case in confiscation proceedings, which were essentially a civil/balance of probability proceedings tried in the criminal courts.
Not surprisingly, the Divisional Court considered this explanation as insufficient. It quashed the order of the Crown Court, and remitted the matter to that Court for it to determine whether Mr. Orton was entitled to his costs in accordance with the judgement of the Divisional Court. In the course of his judgment, Simon J (with whom Maurice Kay LJ agreed) said:
There was no finding of conduct which might otherwise disentitle the claimant to his costs. Although we have not heard arguments on the point, it seems to me that, on an appeal to the Crown Court by the police, the powers of that court include power to review the decision of the Magistrates’ Court on the question of costs in accordance with the wide powers set out in section 229. Having succeeded in both courts, I would have expected the claimant to have been awarded his costs in each case unless cogent reasons were advanced why he should not.
33.	Given that Mr. Orton appeared in person, that neither the police nor the respondent Courts appeared or were represented, that there was no clear explanation of the decision of the Crown Court, and, as it would seem, the Bradford case was not cited, I do not regard the approach of the Divisional Court in that case as authoritative.
34.	Mr Keith relied on two decisions of this Court. In Re Southbourne Sheet Metal Co Ltd [1993] 1 WLR 244, the Secretary of State for Trade and Industry had sought orders of disqualification against the director and a co-director of the company under the Company Directors Disqualification Act 1986. The summons was supported by an affidavit from one of the receivers of the company, which suggested that the director was unfit to be concerned in the management of a company. The director and his professional advisers filed affidavits in opposition denying the allegations of unfitness to manage. Subsequently the director was informed by letter that the Secretary of State, after consideration of the evidence, would apply to the court to withdraw the proceedings and that since “the proceedings were properly commenced in the public interest on the evidence available at the time” it was proper that there should be no order as to costs between the parties. The director replied, asking for payment of his costs of £11,898. The judge granted the Secretary of State’s application to discontinue the proceedings against the director but refused to make an order that the Secretary or State should pay the director’s costs. The  Court of Appeal allowed the director’s appeal. The members of the Court of Appeal considered that there was no special rule relating to proceedings brought by a public authority in the public interest. Nourse LJ set out three of the four general principles as to costs in civil proceedings, as stated by him in In re Elgindata Ltd. (No. 2)  [1992] 1 W.L.R. 1207:
(i) Costs are in the discretion of the court. (ii) They should follow the event, except when it appears to the court that in the circumstances of the case some other order should be made. (iii) The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or a part of his costs.
He continued:
How then can it be said that the ordinary rule ought not to apply? Mr. Heslop’s principal submission was that applications of this kind, being brought in the public interest, are outside the ordinary rule. I accept the premise of that submission, but reject the conclusion. Applications under the Act of 1986 are civil proceedings. It is clear from rule 2 of the Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules 1987 (S.I. 1987 No. 2023), confirmed by the decision of Sir Donald Nicholls V.-C. in  Dobson v. Hastings  [1992] Ch. 394, that the Rules of the Supreme Court, including Order 62 relating to costs, apply to applications under the Act of 1986. Many civil proceedings are brought by the Crown or by local authorities in the public interest. Except for those on which the supposed practice has been based, we have been referred to no decision which supports Mr. Heslop’s submission. In seeking to draw an analogy with an instance of special treatment being given to the Crown or local authorities, he referred us to  In re Highfield Commodities Ltd.  [1985] 1 W.L.R. 149 and the recent decision of the House of Lords in  Kirklees Metropolitan Borough Council v. Wickes Building Supplies Ltd.  [1992] 3 W.L.R. 170. Those were both cases where it was held that the cross-undertaking as to damages habitually required as the quid pro quo for the grant of an interlocutory injunction need not be given. Such analogies are of no assistance on a question of costs. Mr. Heslop has failed to make out any case for the application of a special rule as to costs in proceedings brought in the public interest. The Crown or a local authority must take its chance on costs, just like any other litigant in these courts.
McCowan LJ put the matter pithily:
In the end Mr. Heslop was driven to argue that this type of case, being “public interest proceedings,” is quite different from criminal or civil proceedings when it comes to costs. I am unable to agree. I see no justification for a special costs rule in this type of litigation. The Secretary of State must take his chance in it just like any other litigant. After all, the director in question in such proceedings is also a member of the public and his interests deserve consideration like any other member. If the allegations against him are rejected and he has done nothing to bring the proceedings upon his head, I see no reason why he should not have his costs.
Beldam LJ, at 254, said:
The Insolvent Companies (Disqualification of Unfit Directors) Proceedings Rules 1987 make it clear that an application made under them shall be made in the High Court by originating summons and that the Rules of the Supreme Court 1965 shall apply, except where those rules are inconsistent with the provisions of the Rules of 1987. Section 51(1) of the Supreme Court Act 1981 provides that, subject to rules of the court, costs of and incidental to proceedings in the High Court shall be in the discretion of the court. R.S.C., Ord. 62, r. 3(2) derives from the principle stated by the House of Lords in  Donald Campbell & Co. Ltd. v. Pollak  [1927] A.C. 732 that no party has a right to costs, but that if an order is made the court shall order that they follow the event unless in the circumstances of the case some other order should be made. As the House of Lords made clear in that case, it is only conduct connected with or leading up to the litigation proved before the judge or observed by him during the progress of the case which can provide a proper basis for the exercise of his discretion. Viscount Cave L.C., in his opinion, made it clear that it was not permissible for a court to put upon a statute giving unfettered discretion a gloss which would lead to frustration of its obvious purpose and made it clear that the discretion must be exercised judicially and therefore must be based on some grounds, for a discretion exercised on no grounds cannot be judicial.
….
In  In re Highfield Commodities Ltd.  [1985] 1 W.L.R. 149, a case to which Nourse L.J. has referred, Sir Robert Megarry V.-C. drew a distinction valid in that case between the position of the Crown pursuing litigation for a proprietary claim and litigation pursued in the performance of a statutory duty to bring proceedings in the public interest. The distinction was valid in that case, but it appears unfortunately to have given rise to the convenient phrase “public interest litigation” which has then been uncritically extended to provide an entirely unwarranted public interest immunity for the consequences of unjustified initiation of such proceedings which, it must be assumed, is also to be regarded as in the public interest. I can think of no practice less in the public interest or more calculated to encourage indiscriminate initiation of proceedings at the unjustifiable expense of an individual.
35.	It is not easy to reconcile this rejection of a special rule in public interest cases with the other authorities to which I have referred. The decision in Southbourne Sheet Metal must, I think, be explained as resulting from the provisions of the applicable Rules of the Supreme Court. It is also to be noted that the Court of Appeal did not take the view that the Secretary of State had acted reasonably in commencing proceedings, as is made clear in the judgment of Beldam LJ. 
36.	The Court of Appeal arrived at a similar conclusion in Grimes v Crown Prosecution Service [2003] EWCA Civ 1814. In that case, the dispute was between the CPS, which was seeking to enforce a confiscation order made by the Crown Court in proceedings against the husband, and his wife, who successfully established that she had been beneficially entitled to a one-half interest in the matrimonial home, and was therefore entitled to half of the proceeds of its sale. The High Court judge had refused to make an order for costs against the CPS. Brooke LJ said: 
14. Mr Pawlak urges that the CPS is not insulated from the general rule about costs orders just because it is a public body, and that the judge’s approach was wholly wrong.  He drew our attention to some well-known cases, either when judicial review proceedings are brought in the public interest and there is no order as to costs, or when the police have to act for parties to a licensing appeal, when it may very well not be proper for them to be ordered to pay costs when they are performing a public function of providing the court with information. He said that their cases raised different issues.
….
18. In my judgment there is great force in Mr Pawlak’s submission that the judge set about the exercise of his discretion in the wrong way.  This is the second occasion within two weeks when a division of this court of which I have been a member has been concerned with an appeal in which complaint is made about an order for costs made by the judge when it was not apparent that the judge had set about his duties in the structured way set out in CPR 44.3.  Of course, there is no need for judges to refer to that rule explicitly, provided that they follow its philosophy.  Its philosophy required Wilson J to start with the proposition that the general rule was that the CPS, as the unsuccessful party, should have to pay the costs of the successful party.  It would then follow from that that the judge should consider carefully whether there were any of the specific matters listed in CPR 44.3(4) which would take this case out of the ordinary rule and then consider all the circumstances.  
19.	It appears to me that the judge embarked on his task from the wrong end, focusing first on the position of the CPS, as a public body, and then seeking to find reasons why Mrs Grimes should displace a general rule that the public body should not have to pay the costs of a successful party in circumstances like these.  
20.	In these circumstances, it appears to be one of those cases in which, the judge having set about his task from the wrong end, this court has to exercise its discretion afresh on the materials before it.
21.	One starts with the general rule.  Mrs Grimes had to come to court.  There had been no offer made to her to which the court’s attention was drawn which made it unnecessary for her to come to court.  When she came to court what she had said on paper in her affidavit was believed by the judge.  I entirely understand the contention that it would have been unreasonable for the CPS to concede the totality of her claim in advance: they had their public duties to perform in relation to the need to enforce the confiscation order, and there were oddities about Mrs Grimes’ statement, particularly in relation to the reasons why the property was put in her husband’s sole name.  But that does not, in my judgment, mean that the CPS were entitled to behave, as litigants far too often behaved before the CPR came in, by simply standing back and saying, “We will make no offer at all for the court to consider when it decides what order as to costs is a reasonable one to make.  We will simply see you in court.”
Sedley LJ said:
30. The reason why the judge did not approach the case in this way, as it seems to me, is that he regarded the CPS as having a special litigation position or status.  As my Lord has made clear, it does not.  What it will have in many cases is an argument on the reasonableness of its stance which derives from the nature of its legal functions and the purpose of confiscation orders.  For the rest, and I think contrary to the approach taken by the judge, this proceeding was no different from an interpleader in a judgment creditor’s action.  The Crown when it comes before the courts of this country does so as a litigant like any other. 
…
32. I do not therefore think it necessary for the CPS to have laid itself open to criticism if it is to be made liable for a successful opponent’s costs in a case like the present; and for my part I am willing to accept Miss Barber’s doughty defence of the CPS’s conduct of the case.  But that leaves a simple situation in which two parties, each behaving reasonably, have met in court, where one has lost and ought therefore to expect, other things being equal, to pay the other’s costs.  
37.	It is clear that the Court was aware of the City of Bradford case, and certainly of the principle laid down in it. It would seem that that principle was not applied because CPR Part 44 applied to the litigation. 
38.	More recently, in Walker v the Royal College of Veterinary Surgeons [2007] UKPC 20, the Judicial Committee of the Privy Council had allowed an appeal by Dr. Walker against the order of the Disciplinary Committee of the Royal College ordering his removal from the register, and had substituted an order for his suspension for a period of six months. Dr. Walker’s appeal had been opposed by the Royal College, which had sought to uphold the Disciplinary Committee’s order. The Royal College opposed Dr. Walker’s application for his costs of his appeal. Lord Mance gave the reasons for the decision of the Judicial Committee to award him his costs. He said:
2. The Royal College takes three points in relation to this application. First, it submits that it conflicts with a principle to be derived from cases such as City of Bradford Metropolitan District Council v. Booth .., Gorlov v. Institute of Chartered Accountants … and, most recently, Baxendale-Walker v. The Law Society ...
3. As to the first point, the Board, without commenting upon or going into the principle advanced, considers that it cannot bear on the present situation. The authorities relied on concern the different position of costs before disciplinary tribunals or before a court upon a first appeal against an administrative decision by a body such as a police or regulatory authority. In the present case, the Disciplinary Committee made no order for costs in respect of the proceedings before it (in which Dr Walker was represented by counsel), and no-one has challenged that.
4. The present appeal came before the Board under s.17 of the Veterinary Surgeons Act 1966, subs. (2) of which provides that 
“The Council of the College may appear as respondent on any such appeal and, for the purpose of enabling directions to be given as to the costs of any such appeal, shall be deemed to be a party thereto whether they appeared on the hearing of the appeal or not.”
5. The Board has in practice made costs orders against the Royal College when an appeal succeeded  … and in the College’s favour in cases of unsuccessful appeals … A similar position has applied with appeals from other similar disciplinary committees … No order for costs was made in two cases where the appeal failed on liability, but succeeded on penalty …
6. The Board sees no reason to depart from its previous practice. Here, there was no appeal on liability and it was at all times accepted and submitted on Dr Walker’s behalf that the appropriate disposal would have been and was suspension for a period such as that which the Board in the event advised should be imposed. The present appeal was at all times also fully and firmly opposed by the Royal College. If Dr Walker has lost, there would been good reason for a costs order against him. As he succeeded, a costs order in his favour seems to the Board in principle fair.
39.	As can be seen, this decision was concerned with the costs of a successful appeal, when different considerations may apply to those applicable at first instance. The Judicial Committee did not question the principle applied in the Bradford and Baxendale-Walker cases of decisions at first instance.
The effect of the authorities
40.	I derive the following propositions from the authorities to which I have referred: 
(1)	As a result of the decision of the Court of Appeal in Baxendale-Walker, the principle in the City of Bradford case is binding on this Court. Quite apart from authority, however, for the reasons given by Lord Bingham LCJ I would respectfully endorse its application in licensing proceedings in the magistrates’ court and the Crown Court.
(2)	For the same reasons, the principle is applicable to disciplinary proceedings before tribunals at first instance brought by public authorities acting in the public interest: Baxendale-Walker.
(3)	Whether the principle should be applied in other contexts will depend on the substantive legislative framework and the applicable procedural provisions.
(4)	The principle does not apply in proceedings to which the CPR apply.
(5)	Where the principle applies, and the party opposing the order sought by the public authority has been successful, in relation to costs the starting point and default position is that no order should be made.
(6)	A successful private party to proceedings to which the principle applies may nonetheless be awarded all or part of his costs if the conduct of the public authority in question justifies it.
(7)	Other facts relevant to the exercise of the discretion conferred by the applicable procedural rules may also justify an order for costs. It would not be sensible to try exhaustively to define such matters, and I do not propose to do so. 
41.	Lord Bingham LCJ stated that financial prejudice to the private party may justify an order for costs in his favour. I think it clear that the financial prejudice necessarily involved in litigation would not normally justify an order. If that were not so, an order would be made in every case in which the successful private party incurred legal costs. Lord Bingham LCJ had in mind a case in which the successful private party would suffer substantial hardship if no order for costs was made in his favour. I respectfully agree with what Toulson J (with whom Richards LJ agreed) said in R (Cambridge City Council) v Alex Nestling Ltd:
12.  As to the financial loss suffered by the successful appellant, a successful appellant who has to bear his own costs will necessarily be out of pocket, and that is the reason in ordinary civil litigation for the principle that costs follow the event. But that principle does not apply in this type of case. When Lord Bingham referred to the need to consider the financial prejudice to a particular complainant in the particular circumstances, he was not in implying that an award for costs should routinely follow in favour of a successful appellant; quite to the contrary.
42.	I would also comment that there may have been a tendency to focus more on Lord Bingham LCJ’s answer to the straightforward issue defined in paragraph 1 of his judgment than to the more nuanced propositions set out under paragraph 23. Ultimately, the duty of the magistrates’ court is to make such order as to costs as is just and reasonable, subject to the constraint imposed by section 64.
The application of these propositions to the present case
43.	The application of the principle in the City of Bradford case to a case such as the present, i.e. to proceedings under section 298 of POCA, would extend it to a context in which it has not hitherto been applied. Nonetheless, the judgment in Mercer v Oldham give some support to its application, and its application is consistent with the applicable procedural provision, namely section 64 of the Magistrates’ Court Act 1980.
44.	In the present case, it is common ground that the police had reasonable grounds to seize and to detain the cash in question. It is accepted that when they commenced the proceedings under section 298 of POCA they had reasonable grounds to believe, and did believe, that this cash was intended for use in unlawful conduct (c.f. section 298(2)). It seems to me that in these circumstances the police, acting responsibly, effectively had no choice but to institute those proceedings. As I have pointed out, they could not detain the cash indefinitely. It would have been irresponsible and a breach of their duty to the public for them to have delivered up the cash to the appellant in those circumstances. The only alternative was to make the application for its forfeiture, as they duly did. They should not have been deterred from making that application in those circumstances by concerns as to their liability for the costs of the appellant. There is nothing in POCA to indicate that the principle in City of Bradford should be inapplicable. To the contrary, the restriction of compensation for loss under section 302(4) to cases in which the circumstances are exceptional is consistent with its application.
45.	I therefore agree with what was said by Goldring LJ in the Divisional Court:
29. In spite of the attractiveness of Mr Yeo’s submissions, I have come to the conclusion that the Magistrates were correct in applying the factors set out by Lord Bingham in Bradford when exercising their discretion under section 64 of the Magistrates’ Courts Act 1980. I accept that there is a difference between administrative decisions such as those referred to in Bradford and the present case. The distinction is limited, however. In one case a police officer (at possible risk to someone’s livelihood) is saying that the person will not have an on-licence, for example. In the other, he is saying the person will not have his (or in this case her) money returned. In taking both decisions, it is crucial that the police act honestly, reasonably, properly, and on grounds that reasonably appear to be sound. In both cases there is a need to make and stand by honest, reasonable and apparently sound decisions in the public interest without fear of exposure to undue financial prejudice, in one case if the decision is successfully challenged, in the other if the application fails. There is a real public interest that the police seek an order for forfeiture if they consider that on the evidence it is more probable than not that the money was intended for an unlawful purpose. It would be quite contrary to the public interest if, due to fear of financial consequences, it was decided not to seek its forfeiture, but simply return the money. The public duty requires the police to make an application in such circumstances. 
30. In short, I have come to the conclusion that while the police’s obligation is not on all fours to that which they have in licensing or firearms cases, those situations are sufficiently analogous to suggest that a similar approach should be followed. The rationale lying behind cases such as Bradford, in other words, applies equally to cases such as the present. 
31. It seems to me, moreover, that there is a distinction between an award to a successful defendant in criminal prosecutions of his costs from central funds, and an order against the police should an application for forfeiture fail, albeit properly made. In a criminal prosecution no question arises, absent bad faith, of the successful defendant’s costs being ordered against the Crown Prosecution Service or the police; the body or bodies which decide whether or not to bring the proceedings. 
32. It is necessary too to emphasise the limits of what is said in Bradford. It is not, as Davis J said in Ebbnie [2008] EWHC 166 (a decision with which it follows I agree) setting out any sort of a test. Bradford merely sets out a series of factors which the court should take into account in the application of section 64 of the 1960 Act. The court, as Lord Bingham said, may think it just and reasonable that costs should follow the event. It is worth too emphasising the words “in addition” which precede subparagraphs (i) and (ii) of Lord Bingham’s third proposition. 
33. It follows that it should not be thought that those who bring these applications have carte blanche to make applications for forfeiture without any risk of costs being awarded against them. Such applications can result in grave injustice if not made honestly, reasonably, properly and on grounds that are sound. If applications are made inappropriately, the court should not hesitate to make an order for costs against the applicant.
46.	Lastly, it is not suggested that the police acted unreasonably or irresponsibly once the proceedings had begun. It is not suggested that they had any reason to discontinue their application. The appellant succeeded because of the evidence she called at the hearing of the complaint. Nor is it suggested that the appellant will or has suffered undue financial prejudice: her legal costs of the proceedings before the magistrates were some £9,000, a relatively modest sum in comparison with the amount of cash at stake.
47.	I conclude that the facts of the present case, viewed against the legislative framework of POCA, justified the magistrates’ refusal to order the police to pay the appellant’s costs. 
48.	I therefore agree with the conclusion of the Divisional Court. I would dismiss this appeal. 
Maurice Kay LJ:
49.	I have read both the judgment of Stanley Burnton LJ and that of the Master of the Rolls in draft. I agree with them and have nothing to add.
1.	
The Master of the Rolls:
50.	The factual and procedural history which gives rise to this appeal is clearly and fully set out by Stanley Burnton LJ, and I gratefully adopt what he says.
51.	The point which the Divisional Court had to decide was whether it was an appropriate exercise of the Magistrates’ powers under section 64 of the Magistrates’ Court Act 1980 to make no order for costs, rather than ordering the respondent Metropolitan Police Commissioner to pay the costs of the appellant, Mrs Perinpanathan, following the failure of the police in their confiscation claim under Section 298 of POCA in respect of some £150,000, which they had seized from her daughter.  The Magistrates decided to make no order for costs because, although the police had failed in their confiscation claim, they had nonetheless acted reasonably throughout in seizing the money, in retaining the money, and in prosecuting the confiscation proceedings.
52.	The appellant’s case was that she should have recovered her costs from the Commissioner in the normal way, because the confiscation proceedings were hostile litigation in which she had succeeded, an argument reinforced by the fact that the only way she could have recovered her money was by defending those proceedings. The Commissioner’s case was that the proceedings arose from, and were prosecuted as, an essentially regulatory activity on the part of the police, exercising their public duty reasonably, and that this justified a much more nuanced approach to costs, such that, in the circumstances, the Magistrates were right to make no order for costs.
53.	There is obvious force in each of these contentions, particularly when viewed from the reasonable perspective of the party on whose behalf the contention is advanced.  The appellant can say that she had to incur legal expenses in defending a confiscation claim brought by the police in order to recover her £150,000, when she had done nothing wrong in connection with the seizure of the money or the confiscation proceedings. More generally, it can be said in favour of her case that, if no order for costs is made in favour of a person in her position, there is a risk that the police will be relatively cavalier about carrying out their functions under POCA. The police, for their part, can say that they were statutorily charged with the important regulatory function of seizing and confiscating “hot” money, and that they should not suffer a further financial burden (over and above their own administrative and legal costs) of carrying out that function in a reasonable way, and that in this case they had good reasons for their suspicions and their actions, and presented a reasonable case for confiscation to the court. More broadly, it can be said on their behalf that an order for costs against the Commissioner would have a “chilling” effect on the exercise of regulatory powers conferred on the police by POCA. 
54.	At least in the context of civil litigation in the High Court and the County Court, the normal, and very well established, rule is that costs follow the event, and there is clear authority in this court that this rule applies even when it results in a regulatory or similar body, which has acted reasonably, having to bear the costs of pursuing a reasonable, but ultimately unsuccessful, claim. 
55.	Thus, in In re Southbourne Sheet Metal Co Ltd [1993] 1 WLR 244, where the Secretary of State for Trade and Industry had unsuccessfully, but reasonably, pursued a disqualification claim under the Company Directors Disqualification Act 1986, the Court of Appeal overruled the trial Judge’s decision to make no order for costs. The reasoning is set out in paragraph 34 above; in summary, this court considered, as Nourse LJ put it, that the fact the claim was “brought in the public interest” did not “take it outside the ordinary rule”, and that a Government Department performing a regulatory or enforcement activity “must take its chance on costs, just like any other litigant in these courts”. 
56.	A similar approach taken by this court in Grimes v Crown Prosecution Service [2003] EWCA Civ 1814, as may be seen from the passages cited in paragraph 36 above. In that case, the CPS was enforcing a confiscation order made by the Crown Court, and had reasonably, but unsuccessfully, challenged the assertion of the convicted person’s wife that she had a 50% share in the matrimonial home. Again overruling the trial Judge, this court ordered the CPS to pay the wife’s costs, on the basis that, as Sedley LJ said, the CPS had no “special litigation position or status”, and that it was not “necessary for the CPS to have laid itself open to criticism if it is to be made liable for a successful opponent’s costs”.
57.	The approach of this court in the Southbourne case [1993] 1 WLR 244 and Grimes’ case [2003] EWCA Civ 1814 supports, at least at first sight, the appellant’s case here. However, both cases involved applications made to the High Court, where “the general rule” is that costs follow the event, as was explained by Nourse LJ in In re Elgindata (No 2) [1992] 1 WLR 1207, 1214A-B. This reflected the provisions of the rule then in force, RSC Order 62, and in particular rule 3(2), which was in similar terms to the current CPR 44.3(2)(a), which states that “the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party”. It is true that that provision is governed by the opening words of CPR 44.3(2), namely “[i]f the court decides to make an order about costs …”, which again is similar to RSC Order 62 rule 3 in this connection. However, there can be no doubt that the “general rule” is one which is the default or presumptive position in High Court and County Court litigation, as was recognised by Nourse LJ when he referred to the High Court’s approach to awards of costs as being governed by “established practice” as well as rules in the Elgindata case [1992] 1 WLR 1207, 1214A. 
58.	There is no provision such as CPR44.3(2)(a) in the relevant provision governing costs in the present case, namely section 64, which is set out in paragraph 12 above. The only limitation in section 64(1) appears to me to be that, at least arguably, the Magistrates cannot make any award of costs in favour of an unsuccessful party. Apart from that, I consider that the section confers an ostensibly unfettered discretion, and, in particular, a discretion which contains no presumption such as that plainly contained in CPR 44.3(2)(a), which is firmly established in the High Court, and indeed the County Court, as explained in the Elgindata case [1992] 1 WLR 1207, 1214A-B. 
59.	The fact that section 64 contains no fetter on the Magistrates’ discretion as to whether, and if so to what extent, to award costs in favour of a successful party does not mean that a court of record cannot lay down guidance, or indeed rules, which should apply, at least in the absence of special circumstances. It is clearly desirable that there are general guidelines, but it is equally important that any such guidelines are not too rigid. There is a difficult, if not unfamiliar, balance to be struck, namely between flexibility, so a court can make the order which is most appropriate to the facts of the particular case and the circumstances and behaviour of the particular parties, and certainty, so that parties can know where they are likely to stand in advance, and inconsistency between different courts is kept to a minimum.
60.	Guidance as to the proper approach to the exercise of their discretion as to costs was given to Magistrates in a vehicle licensing case by the Divisional Court in City of Bradford MDC v Booth [2000] COD 338, where section 64 applied. Lord Bingham LCJ, sitting with Silber J, in the Divisional Court, set aside an order for costs made against a local authority which had reasonably, but unsuccessfully, opposed the grant of a vehicle licence. The principles he suggested, and his reasons for them, are contained in the passages quoted by Stanley Burnton LJ in paragraph 15 above. 
61.	Lord Bingham’s observations were based on policy and justice, but they were also supported by previous High Court decisions on orders for costs on successful licensing appeals. The statutory power considered in those previous decisions was contained in section 193B(1) of the Licensing Act 1964, which is set out in paragraph 20 above, and plainly gave the court an unfettered discretion, in other words, a power similar to that conferred by section 64 (save that it did not prevent costs being awarded against a successful party). The most significant previous decisions relied on by Lord Bingham were those of Roch J in R v Totnes Licensing Justices ex p Chief Constable of Devon and Cornwall (1990) 156 JP 587, and Lightman J in R v Merthyr Tydfil Crown Court ex p Chief Constable Dyfed Powys Police CO3484/97, as explained in paragraphs 22 to 24 above.
62.	Lord Bingham’s principles have subsequently been applied by the High Court in relation to a Magistrates’ decisions on costs on appeals from gaming club decisions of local authorities (where the Magistrates were given a similar discretion under what is now section 207(3)(d) of the Gambling Act 2005), a Crown Court Judge’s decision on costs on appeals from firearms decisions of the police (where rule 12(2) of the Crown Court Rules gives a similar discretion as to costs), and a Magistrates’ decision on costs on successful appeals from licensing decisions of local authorities (where the Magistrates are given a wide apparently unfettered discretion on costs under section 181(2) of the Licensing Act 2003),: see R v Stafford Crown Court ex p Wilf Gilberts (Staffs) Ltd (unreported) 22 February 1999, and Chief Constable of Derbyshire v Goodman and Newton [2001] LLR 127, and R (Cambridge City Council) v Alex Nestling Ltd [2006] EWHC 1374 (Admin), respectively.
63.	Of course, these were not cases where section 64 applied, and only one of them (Goodman’s case [2001] LLR 127) involved the police. Further, the reasoning in Booth’s case [2000] COD 338 is not binding on this court, and there are points of distinction between Booth’s case [2000] COD 338 and this case. However, I am of the view that it would be wrong to overrule, or even cut down, the principles enunciated by Lord Bingham, and that the grounds on which his principles are founded exist as much in the present type of case as in Booth’s case [2000] COD 338.
64.	So far as the principles themselves are concerned, they are, as already mentioned, consistent with the approach adopted in the High Court in a number of previous decisions in the preceding eight years (i.e. those decisions identified in paragraph 22 above), and they have been applied in subsequent decisions (such as those mentioned in paragraph [28] above). Unless satisfied that they are wrong in principle or inconsistent with other authority, I think that it would require a particularly good reason to overrule the principles, given that they have, at least in general, been accepted and applied for some twenty years. I have already referred to the general desirability of the law being clear and consistent, so that parties know what their rights and liabilities are likely to be, and I think that is an important factor for the court to bear in mind when it comes to the principles applicable to awards of costs.
65.	Lord Bingham said that his three principles applied to “questions of this kind”, and it is therefore potentially open to arguments as to how far they were intended to apply outside appeals against vehicle licensing decisions. However, it seems to me that the way he expressed himself suggests that he was intending to refer to any case where the police or a regulatory authority was carrying through what was essentially an “administrative decision”, which I understand to mean the performance of one of its regulatory functions, and where the question of costs was governed by section 64. That view is supported by the High Court decisions in which the principles have subsequently been applied – see paragraph [28] above. This provides support for the proposition that Lord Bingham’s principles should be applied in the present case.
66.	It is true that in Mercer v Oldham [1984] Crim LR 232, the High Court upheld an order that the police pay a complainant’s costs where they unsuccessfully opposed his application for an order for the return of his motor vehicle, on the ground that the police “had actively opposed the order”. The court thereby distinguished the previous decision of David v Commissioner of Metropolitan Police [1962] 2 QB 135, where the police had not opposed the making of the order sought - and Maidstone Sack and Metal Co Ltd v Allen (unreported) 3 February 1958, which was followed in David’s case [1962] 2 QB 135. 
67.	Mr Keith QC, in the course of his well-presented argument for the appellant, contended that the combined effect of those three decisions is that one must distinguish between cases where the police simply assist the court (and should not be at risk on costs), and cases where they take an active part in the proceedings (and should be at risk on costs). That contention appears to me to be hard to reconcile with Booth’s case [2000] COD 338 and the other High Court decisions referred to in paragraphs 60 and 61 above. Further, it appears to me that closer analysis of the very briefly reported decision in Mercer’s case [1984] Crim LR 232 suggests that it is not, in fact, inconsistent with Lord Bingham’s principles. The Magistrates found that the police who were opposing the making of the order “had taken no steps to ascertain [the complainant’s] state of knowledge”, which was the crucial issue in the case; in those circumstances, the Magistrates’ order for costs was described by the court as an “exercise of [their] discretion” which was “not so wholly wrong in law or in excess of [their] jurisdiction.” In other words, at least as I see it, the police behaved in a way which the Magistrates could properly have regarded as unreasonable.
68.	Further, Mr Keith’s contention strikes me as somewhat inconsistent and inconvenient. It is a little inconsistent to say that the police should not be liable for costs if their actions require a person to incur the expense of seeking relief from the court and they turn up to assist the court, but that they should be liable for costs if they go a little further and oppose the grant of the relief. The reason for not making a costs order in the former case is that the police are reasonably performing their duty, but, if that is right, I find it hard to see why it should not also apply in the latter case. The inconvenience, if Mr Keith’s contention is right, arises from the fact that assisting the court and opposing the application can sometimes merge or overlap: the police might be neutral, while seeing it as their duty to produce evidence and arguments against the claimant in order to assist the court.
69.	I also consider that Mr Keith’s contention is hard to reconcile with the observations (albeit obiter) of this court in R v Uxbridge Justices ex p Commissioner of Police of Metropolis [1981] 1 QB 829, a case where the police were not opposing the return of money which they had seized from the home of the applicant following his conviction. The relevant extracts from the judgments are set out in paragraph 26 above; the essential point is that Sir Stanley Rees (with whom Sir George Baker agreed) said that, even if the police had opposed the order which was eventually made, the proper approach “should most certainly not be on the basis that costs should simply follow the event, but rather that the discretion to award them should be sparingly exercised, having regard to the exceptional nature of the role of the police as custodians of the property in issue, who require an order of the court to protect them before the delivery up of the property to the claimant.”    
70.	The Uxbridge Justices’ case [1981] 1 QB 829 was cited by, and was binding on, the High Court in Mercer’s case [1984] Crim LR 232, and that supports my opinion that the upholding of the order for costs in the latter case must have been based on the conclusion that the Magistrates had properly concluded that the behaviour or opposition of the police was unreasonable.  There is only one other High Court decision to which we were referred and which was said to be consistent with the appellant’s case. It is Orton v Truro Crown Court and West Cornwall Magistrates’ Court [2009] EWHC 168 (Admin), which I do not find persuasive for the reasons given by Stanley Burnton LJ in paragraphs 32 and 33 above.
71.	 “[T]he three principles distilled by Lord Bingham” in Booth’s case [2000] COD 338 were referred to with implied approval, and indeed were effectively applied, by this court in Baxendale-Walker v The Law Society [2007] EWCA Civ 233; [2008] 1 WLR 426, a case which involved the disciplinary powers of the Law Society, and is fully discussed in paragraph 29 above. Sir Igor Judge P, who gave the judgment of the Court of Appeal, agreed with the approach in a previous High Court decision of Jackson J in R(Gorlov) v Institute of Chartered Accountants in England and Wales [2001] ACD 393 as to the costs of unsuccessful disciplinary proceedings. The essence of Sir Igor’s reasoning for present purposes was that “[t]here is no assumption that an order for costs in favour of a solicitor who has successfully defeated an allegation for misconduct will automatically follow”, and that “Jackson J was right to equate the responsibilities of the institute in Gorlov’s case [2001] ACD 393 with the regulatory actions of the licensing authorities in Booth’s case [2000] COD 338”. 
72.	I would not go so far as to say that this decision strictly compels us to follow the reasoning in Booth’s case [2000] COD 338, or to apply that reasoning in a case such as this. After all, the Court of Appeal in Baxendale-Walker’s case [2008] 1 WLR 426 was not really concerned with whether Lord Bingham’s principles were applicable in Booth’s case [2000] COD 338, let alone to a slightly different case, such as the present, where section 64 also applies. However, the Court of Appeal’s reasoning and decision provides very recent and highly authoritative support, in terms of both principle and practice, for the propositions that Booth’s case [2000] COD 338 was rightly decided and that it should apply to a case such as this. 
73.	So far as principle is concerned, the judgement of this court in Baxendale-Walker’s case [2008] 1 WLR 426 has given strong support to the notion that Lord Bingham’s three principles should apply where a regulatory body is reasonably carrying out its functions in court proceedings, at least where the rules of that court contain no presumption or principle that costs follow the event. The effect of the reasoning is that, just because a disciplinary body’s functions have to be carried out before a tribunal with a power to order costs, it does not follow that there is a presumption that the tribunal ought to order the disciplinary body to pay the costs if it is unsuccessful, and that, when deciding what order to make, the tribunal should approach the question by reference to Lord Bingham’s three principles. It is hard to see why a different approach should apply to a regulatory or similar body carrying out its functions before a court – unless the rules of that court have any presumptive principle inconsistent with those principles, such as CPR 44.3(2)(a). Indeed, given that section 64 applies in this case, as it did in Booth’s case [2000] COD 338, it seems to me that this case can be said to be, if anything, a stronger one for applying Lord Bingham’s principles than in Baxendale-Walker’s case [2008] 1 WLR 426.
74.	If we were to hold that Lord Bingham’s principles did not apply in a case such as the present, the proper approach to the question of costs in regulatory matters would be fairly seen to be incoherent, or at least inconsistent. There have been a significant number of cases over the past thirty years (from the Uxbridge Justices’ case [1981] 1 QB 829 to Baxendale-Walker’s case [2008] 1 WLR 426), where the High Court and Court of Appeal have had to consider whether it was right to award a successful party costs against a regulatory or disciplinary body, and the consistent approach has been that laid down by Lord Bingham in Booth’s case [2000] COD 338. The alleged exceptions are (a) the Southbourne case [1993] 1 WLR 244 and Grimes’s case [2003] EWCA Civ 1814, where the presumption in CPR 44.3(2)(a) applied, (b) the decision in Mercer’s case [1984] Crim LR 232, which seems to me, on analysis, to be explicable by reference to the court’s view of the unreasonableness of the police, and (c) the unopposed appeal against the inadequately reasoned decision in Orton’s case [2009] EWHC 168 (Admin). For the reasons I have given, I do not consider they call into question the Commissioner’s case, which was cogently advanced by Sir Geoffrey Nice QC.
75.	As I have indicated, there is a respectable argument for saying that there should be a presumption that a person in the position of the appellant should be able to recover at least some of her costs because she had successfully defeated the claim by the police to confiscate her money. However, there is also a respectable argument for saying that there is no such presumption, and that, absent other factors, she should only be able to recover any costs in so far as they were incurred as a result of the actions of the police in connection with the detention and claim for confiscation of her money which were unreasonable or in some other way open to criticism. In my view, the resolution of the question as to which of these two views should prevail is really determined by the decisions to which I have referred of the High Court and the Court of Appeal over the past thirty years, the effect of which is encapsulated in Lord Bingham’s principles. 
76.	The principles appear to me to be well founded, as one would expect bearing in mind their source. In a case where regulatory or disciplinary bodies, or the police, carrying out regulatory functions, have acted reasonably in opposing the grant of relief, or in pursuing a claim, it seems appropriate that there should not be a presumption that they should pay the other party’s costs. It is not as if the other party would have no right to recover costs in such a case: as Lord Bingham made clear, one must take into account “all the relevant facts and circumstances of the case”, and in particular “the financial prejudice to the particular complainant if the order for costs is not made in his favour”. However, it has not been suggested by either party to this appeal that weight should be given in this case to any points other than those I have discussed. In other words, if, as I consider to be the case, Lord Bingham’s principles apply in this case, it is not suggested on behalf of the appellant that the Magistrates or the Divisional Court reached the wrong conclusion.
77.	The effect of our decision is that a person in the position of the appellant, who has done nothing wrong, may normally not be able to recover the costs of vindicating her rights against the police in proceedings under section 298 of POCA, where the police have behaved reasonably. In my view, this means that Magistrates should exercise particular care when considering whether the police have acted reasonably in a case where there is an application for costs against them under section 64. It would be wrong to invoke the wisdom of hindsight or to set too exacting a standard, but, particularly given the understandable resentment felt by a person in the position of the appellant if no order for costs is made, and the general standards of behaviour that can properly be expected from the police, it must be right to scrutinise their behaviour in relation to the seizure, the detention, and the confiscation proceedings, with some care when deciding whether they acted reasonably and properly.
78.	Accordingly, for reasons which largely reflect those of Stanley Burnton LJ and the Divisional Court, I would dismiss this appeal.