Court of Appeal

Published November 12, 2008

G v HM Treasury A and Others v Same

Before Sir Anthony Clarke, Master of the Rolls, Lord Justice Sedley and Lord Justice Wilson

Judgment October 30, 2008

Two antiterror Orders in Council made under section 1 of the United Nations Act 1946 to implement Security Council resolutions were lawful and valid, subject to important conditions.

The Terrorism (United Nations Measures) Order 2006 was valid provided that certain words were excised from article 4(2) with the result that the Treasury was required to show reasonable grounds for suspecting the involvement of the designated person in committing or facilitating terrorism and not simply for suspecting that he might be involved.

The al-Qaeda and Taleban (United Nations Measures) Order 2006 was also lawful and valid, so long as the designated individual was entitled to a merits-based review of his case.

The Court of Appeal so held, Lord Justice Sedley dissenting, allowing in part the appeal of the Treasury against the quashing by Mr Justice Collins ([2008] EWHC 869 (Admin)) in actions by: (i) G of the Terrorism Order and the al-Qaeda Order as ultra vires the 1946 Act and (ii) A, K, M and Q of the Terrorism Order as similarly ultra vires.

Mr Jonathan Swift, Sir Michael Wood and Mr Andrew O’Connor for the Treasury; Mr Rabinder Singh, QC and Mr Richard Hermer for G; Mr Tim Owen, QC and Mr Dan Squires for A, K, M and Q.

THE MASTER OF THE ROLLS said that by article 25 of the Charter of the United Nations, Security Council resolutions created legal obligations binding on all states. The Terrorism Order and the al-Qaeda Order were made to give effect to resolutions adopted to prevent and suppress the financing of terrorist acts by freezing funds and other assets.

All the applicants were designated by direction under article 4(2)(a) of the Terrorism Order as persons whom the Treasury had reasonable grounds for suspecting “are or may be” persons who committed, attempted to commit, participated in or facilitated the commission of acts of terrorism.

Security Resolution 1373 was silent on the standard of proof to be satisfied on whether a particular person committed or attempted to commit terrorist acts before a state had to freeze his assets within paragraph 1(c) of the resolution or prohibit certain activities within paragraph 1(d).

The “reasonable grounds for suspecting” test in article 4(2) of the Terrorism Order was in those circumstances lawful provided that the person concerned had a proper opportunity to challenge the decision made against him.

If Parliament was not to be involved, it was necessary for the Order in Council to go no further than to apply what the resolution required. In the case of “reasonable grounds for suspicion” it did not go further than Resolution 1373 required, whereas, by adding “or may be” it did go further.

The judge had quashed the whole Terrorism Order. The effect of the inclusion of the words “or may be” was not that the whole order had to be quashed. The obvious solution was to order that the words “or may be” be excised from article 4(2) of the Terrorism Order.

All the directions made against the applicants included the statement that the Treasury “has reasonable grounds for suspecting that you are, or may be, a person who facilitates the commission of acts of terrorism...” Since the directions expressly referred to “or may be” his Lordship would quash the directions as made.

The only express procedural safeguard in the Terrorism Order was contained in article 5(4) which provided that the High Court could set aside a direction on the application of the person identified in the direction or any other person affected by it.

There was so far no statutory power to appoint a special advocate in proceedings arising out of the Terrorism Order. However, in an appropriate case the court would have power to authorise or request the use of a special advocate: see R (Roberts) v Parole Board (The Times July 8, 2005; [2005] 2 AC 738).

Articles 7 and 8 of the Terrorism Order created criminal offences; article 7 by prohibiting any person from dealing with funds belonging to a designated person and article 8 by prohibiting any person from making funds available to a designated person otherwise than under a licence granted by the Treasury.

His Lordship concluded that the terms of article 7 satisfied the test of certainty and were proportionate.

Concerns had been raised in relation to licences sought from the Treasury under article 11. The licence system was plainly intended to be a central part of the scheme.

The Treasury had to act lawfully in considering applications for licences, taking account of only relevant considerations and acting rationally throughout. Provided that the licence scheme was operated as indicated, article 7 was sufficiently certain and proportionate.

The prohibition in article 8 against making funds available to a designated person directly or indirectly was sufficiently clear and proportionate. It had a legitimate purpose, namely to avoid terrorists obtaining funds or other financial benefits which rendered other of their funds to be available for deployment. If the scheme was operated as intended it was not unlawful or contrary to the European Convention on Human Rights.

With the exception of “or may be” the terms of the Terrorism Order were within the statutory powers conferred by section 1 of the 1946 Act and were not otherwise contrary to the Convention or unlawful at common law.

Those conclusions led to the conclusion that the al-Qaeda Order was also lawful. The court had power to consider an application for judicial review by a person to whom the al-Qaeda Order applied to ask the court to consider the basis of the listing.

If the court were to hold that the person should not have been listed, the Treasury would surely wish to have that person delisted and take appropriate steps to that end. How the system would work in a particular case would depend on the circumstances.

The al-Qaeda Order was lawful but G was entitled to a merits-based review of the kind indicated.

Lord Justice Sedley delivered a dissenting judgment and Lord Justice Wilson agreed with the Master of the Rolls.

Solicitors: Treasury Solicitor; Tuckers; Birnberg Peirce and Public Law Solicitors, Birmingham.

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