PETITION OF AVAAZ FOUNDATION AGAINST THE SCOTTISH MINISTERS AND OTHERS

Factual and Procedural Background

The petitioner, a non-profit organisation incorporated in Delaware, sought judicial review of the Scottish ministers' approach to applying for Unexplained Wealth Orders ("UWOs") under the Proceeds of Crime Act 2002. The petitioner requested declarators on general questions concerning responsibility for making UWO applications, delegation of that responsibility, legal standards applicable, and whether there is a mandatory duty to apply for UWOs when criteria are met. Additionally, the petitioner challenged the ministers' alleged unlawful failure to apply for a UWO relating to former US President Trump's assets in Scotland.

Following a preliminary oral hearing, the court found the petition had real prospects of success but identified that the petition was lodged out of the three-month time limit prescribed by the Court of Session Act 1988. The petitioner initially failed to request an extension of time in the petition but later sought such an extension during the oral hearing. A further hearing was scheduled to address whether the court could entertain the extension request and whether EU-derived law required disapplication of the time limit.

At the subsequent hearing, the court exercised its discretion to relieve the petitioner from the failure to comply with procedural rules regarding the extension request, allowing substantive arguments to proceed.

Legal Issues Presented

1. Whether the court could competently entertain an application for extension of the three-month time limit despite the petitioner’s initial failure to seek it in the petition.
2. Whether the court should exercise its discretion to grant an extension of the time limit in the circumstances of the case.
3. Whether the three-month time limit should be disapplied to ensure full and effective application of EU-derived law.
4. The general legal questions concerning responsibility for deciding on UWO applications, delegation of responsibility, applicable legal standards, and the existence of a mandatory duty to seek UWOs where criteria are met.
5. Whether the Scottish ministers acted unlawfully in failing to apply for a UWO in relation to the former US President’s assets in Scotland.

Arguments of the Parties

Petitioner's Arguments

• The petitioner sought an equitable extension of the three-month time limit under section 27A(1)(b) of the Court of Session Act 1988, emphasizing that the discretion to extend is wide and considers factors such as length and reasons for delay, prejudice to parties, importance of issues, strength of the case, and continuing effect of the matters complained of.
• The petitioner acted reasonably by initially attempting to resolve matters politically rather than legally, engaging in lobbying and correspondence from April 2019 through early 2021 before lodging the petition.
• There was no wilful disregard of the time limit; the petitioner misunderstood the expiry date and was diligent in pursuing the matter.
• Substantial prejudice would be caused to the petitioner and public interest if the petition were not allowed to proceed, while no identifiable prejudice would be caused to the respondents.
• The issues raised were of considerable public importance, relating to the implementation of anti-money laundering and anti-corruption legislation derived from international and EU obligations, and involved the continuing significance of EU-derived law post-Brexit.
• The petition had real prospects of success as previously determined by the court.
• The ministers’ position had a continuing effect, reinforcing the justification for extension.
• In the event of uncertainty about extension, the petitioner argued the court could defer the decision until the substantive hearing.
• On EU-derived law, the petitioner contended that the court was obliged to grant an extension if necessary to ensure full and effective application of EU-derived rights, citing relevant case law and statutory provisions.

Respondents' Arguments

• The onus was on the petitioner to persuade the court to exercise its wide discretion to extend the time limit.
• There was a lengthy delay, with the petitioner aware of the ministers' position since mid-2019 and choosing political rather than legal means to address it.
• Proceeding with the petition was not necessarily in the public interest, as future timely proceedings could address any appropriate circumstances.
• The petition primarily pursued a political agenda against the former US President rather than a genuine public interest in clarifying the law.
• Granting an extension would be disproportionate given the delay and resource implications, although no specific prejudice to the ministers was claimed.
• Time limit issues should be dealt with at the permission stage and not deferred.
• No relevant EU-derived right was engaged by the petition; the existence of a three-month limit with discretionary extension did not impede full and effective exercise of any EU-derived rights.

Table of Precedents Cited

Court's Reasoning and Analysis

The court acknowledged the wide discretion under section 27A(1)(b) of the Court of Session Act 1988 to extend the three-month time limit, weighing all circumstances. It found a significant delay between the earliest date on which the petitioner could have raised the issue (mid-2019) and the petition’s lodging, with the petitioner having pursued political rather than legal resolution during that period. The court held that the letter of 22 February 2021 did not reset the three-month period, and the petition was therefore out of time.

Despite the delay, the court noted the absence of any prejudice to the respondents beyond public time and expense, which would have been incurred had the petition been timely. No reliance interests or irrevocable actions by others were identified. The court considered the substantial public importance of the general legal questions raised and the continuing effect of the ministers’ position, which weighed strongly in favor of granting an extension.

The court expressed skepticism about the petitioner’s motivation, noting a political agenda against the former US President, but held that subjective motives should not prevent the airing of objectively important public interest matters. The court declined to restrict the petition to general issues only, allowing the specific issues concerning the former US President to proceed as well.

Regarding procedural timing, the court held that where time limit issues are in genuine dispute or lack clear resolution at permission stage, the court is not required to make a final decision on timebar at that stage and may defer substantive determination to later stages. However, extension requests should be made at the petition stage to facilitate timely resolution.

On the EU-derived law argument, the court found no clear necessity to read domestic procedural rules specially to ensure full application of EU-derived law beyond the ordinary process of considering extensions. The existence of a reasonable time limit with a discretionary extension mechanism sufficed to protect EU rights.

Ultimately, the court granted permission for the petition to proceed without restriction, extending the time limit to include the date of lodging the petition.

Holding and Implications

The court's final decision was to GRANT PERMISSION for the petition to proceed and to extend the statutory three-month time limit to include the actual date of lodging the petition.

The direct effect is that the petitioner may continue with the judicial review on both the general legal questions concerning UWOs and the specific issue relating to the former US President’s assets in Scotland. No restriction was placed on the grounds of challenge.

No new legal precedent altering the law on time limits or EU-derived law application was established; rather, the decision applied existing principles to the facts, emphasizing the interests of justice and public importance in allowing the petition to proceed despite delay.