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You are here: BAILII >> Databases >> England and Wales High Court (Administrative Court) Decisions >> C v HM Treasury [2016] EWHC 2039 (Admin) (05 August 2016) URL: https://www.bailii.org/ew/cases/EWHC/Admin/2016/2039.html Cite as: [2016] EWHC 2039 (Admin) |
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QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
Strand, London, WC2A 2LL |
||
B e f o r e :
____________________
C |
Appellant |
|
- and - |
||
HM TREASURY |
Respondent |
____________________
Steven Kovats QC and Steven Gray (instructed by the Government Legal Department
) for the Respondent
Peter Carter QC (instructed by the Special Advocate Support Office) as Special Advocate
Hearing dates: 19 July, 20 July and 21 July 2016
____________________
Crown Copyright ©
Mr Justice Cranston:
Introduction
Legal framework
"(1) The Treasury may make a final designation of a person for the purposes of this Part if –
(a) they reasonably believe –
(i) that the person is or has been involved in terrorist activity,
…
(b) they consider that it is necessary for purposes connected with protecting members of the public from terrorism that financial restrictions should be applied in relation to the person.
(2) For this purpose involvement in terrorist activity is any one or more of the following –
…
(b) conduct that facilitates the commission, preparation or instigation of such acts, or that is intended to do so;
(c) conduct that gives support or assistance to persons who are known or believed by the person concerned to be involved in conduct falling within paragraph (a) or (b) of this subsection.
(3) It is immaterial whether the acts of terrorism in question are specific acts of terrorism or acts of terrorism generally.
(4) In this section –
"terrorism" has the same meaning as in the Terrorism Act 2000 (see section 1(1) to (4) of that Act);
and the reference in subsection (1)(b) above to financial restrictions includes a reference to restrictions relating to economic resources."
"63 Whether it is necessary to impose any particular obligation on an individual inorder
to protect the public from the risk of terrorism involves the customary test of proportionality. The object of the obligations is to
control
the activities of the individual so as to reduce the risk that he will take part in any terrorism-related activity. The obligations that it is necessary to impose may depend upon the nature of the involvement in terrorism-related activities of which he is suspected. They may also depend upon the resources available to the Secretary of State and the demands on those resources. They may depend on arrangements that are in place, or that can be put in place, for surveillance.
64 The Secretary of State is better placed than the court to decide the measures that are necessary to protect the public against the activities of a terrorist suspect and, for this reason, a degree of deference must be paid to the decisions taken by the Secretary of State…
65 Notwithstanding such deference there will be scope for the court to give intense scrutiny to the necessity for each of the obligations imposed on an individual under acontrol order
, and it must do so. The exercise has something in common with the familiar one of fixing conditions of bail. Some obligations may be particularly onerous or intrusive and, in such cases, the court should explore alternative means of achieving the same result."
Thus, what could be called the plain need for measure must be considered in context and in light of proportionality.
"(1) In this Act "terrorism" means the use or threat of action where –
(a) the action falls within subsection (2),
(b) the use or threat is designed to influence the government or an international governmental organisation or to intimidate the public or a section of the public, and
(c) the use or threat is made for the purpose of advancing a political, religious, racial or ideological cause.
(2) Action falls within this subsection if it –
(a) involves serious violence against a person,
(b) involves serious damage to property,
(c) endangers a person's life, other than that of the person committing the action,
(d) creates a serious risk to the health or safety of the public or a section of the public, or
(e) is designed seriously to interfere with or seriously to disrupt an electronic system.
(3) The use or threat of action falling within subsection (2) which involves the use of firearms or explosives is terrorism whether or not subsection (1)(b) is satisfied.
(4) In this section—
(a) "action" includes action outside the United Kingdom,
(b) a reference to any person or to property is a reference to any person, or to property, wherever situated,
(c) a reference to the public includes a reference to the public of a country other than the United Kingdom, and
(d) "the government" means the government of the United Kingdom, of a Part of the United Kingdom or of a country other than the United Kingdom.
(5) In this Act a reference to action taken for the purposes of terrorism includes a reference to action taken for the benefit of a proscribed organisation."
Section 3 of the 2000 Act sets out the circumstance in which an organisation may be proscribed.
"(1) This section applies to any decision of the Treasury –
(a) to make or vary an interim or final designation of a person,
(b) to renew a final designation of a person…
(2) The designated person concerned may appeal against any such decision to the High Court…
(3) On such an appeal, the court may make suchorder
as it considers appropriate."
Thus a court could find that a final designation was rightly made but should later have been revoked and could, depending on what the appellant was appealing against, allow the appeal in part. In my view the scheme of the legislation is such that there is a need separately to appeal a decision to renew a designation even if there is a previous, extant appeal of the original designation. An appeal under section 26 does not suspend the effect of the decision: section 26(4).
"(2) A person making rules of court must have regard to –
(a) the need to secure that the decisions that are the subject of the proceedings are properly reviewed; and
(b) the need to secure that disclosures of information are not made where they would be contrary to the public interest…
(4) Rules of court may make provision –
(a) enabling the proceedings to take place without full particulars of the reasons for the decisions to which the proceedings relate being given to a party to the proceedings (or to any legal representative of that party);
(b) enabling the court to conduct proceedings in the absence of any person, including a party to the proceedings (or any legal representative of that party)…"
Section 67 provides, inter alia:
"(2) Rules of court must secure that the Treasury are required to disclose –
(a) material on which they rely;
(b) material which adversely affects their case; and
(c) material which supports the case of a party to the proceedings.
This is subject to the following provisions of this section.
(3) Rules of court must secure –
(a) that the Treasury have the opportunity to make an application to the court for permission not to disclose material otherwise than to –
(i) the court; and
(ii) any person appointed as a special advocate;
(b) that such an application is always considered in the absence of every party to the proceedings (and every party's legal representative);
(c) that the court is required to give permission for material not to be disclosed if it considers that the disclosure of the material would be contrary to the public interest;
(d) that, if permission is given by the court not to disclose material, it must consider requiring the Treasury to provide a summary of the material to every party to the proceedings (and every party's legal representative); and
(e) that the court is required to ensure that such a summary does not contain material the disclosure of which would be contrary to the public interest.
…
(6) Nothing in this section, or in rules of court made under it, is to be read as requiring the court to act in a manner inconsistent with Article 6 of the Human Rights Convention."
"79.2 (1) Where this Part applies, the overriding objective in Part 1, and so far as relevant any other rule, must be read and given effect in a way which is compatible with the duty set out in paragraph (2).
(2) The court will ensure that information is not disclosed contrary to the public interest.
(3) Without prejudice to paragraph (2), the court will satisfy itself that the material available to it enables it properly to determine the proceedings."
Where the Treasury seek to withhold disclosure of any closed material from an appellant and the appellant's legal representative, the procedure to be followed is set out in CPR 79.25. Under CPR 79.26, the court fixes a hearing for the Treasury and the special advocates to make oral representations unless, amongst other reasons, the latter gives notice to the court that they do not challenge the application. CPR 79.26(5) and (6) require the court to permit the Treasury to withhold closed material where its disclosure would be contrary to the public interest.
The evidence
Appellant's businesses
a) Best Training: Sales increased from £503,438 in 2009 to a maximum of £1,374,589 in 2011. They then decreased to £411,922 in 2015. Profits before management charges increased from £118,788 in 2009 to a maximum of £369,050 in 2011, decreasing to a loss of £33,668 in 2015.
b) Master Printers: There were no sales for Master Printers for the period ending 28 February 2010, resulting in a loss of £11,198. The first sales for Master Printers were for the quarter ending 30 November 2010. Sales for the year ending 28 February 2011 were £14,729. Wages were £48,334 and other costs £50,941, resulting in a loss before management charges of £84,546. Sales for the year ending 28 February 2012 were £50,003. Wages were £50,357 and other costs were £105,443, resulting in a loss before management charges of £105,797.
c) Yummy Sweets: Its first cash banking occurred on 20 December 2011. Sales for the period ending 31 May 2012 were £35,040, gross profit was £23,039, director's salary (paid to the appellant's sister) was £1,500, wages were £14,241 and other costs were £40,401, resulting in a loss of £33,103. Sales for the year ended 31 May 2013 were £72,403, gross profit was £16,416, wages were £78,067, other costs were £44,621, resulting in a loss before management charges of £106,272. Sales for the year ending 31 May 2014 were £47,514, gross profit was £20,924, wages were £55,216, other costs were £82,462, resulting in a loss before management charges of £116,754. Sales for the year ending 31 May 2015 were £3,963, gross profit was £152, wages were £13,010, other costs were £29,819, resulting in a loss of £42,677.
32 New Road, CIS and Anjem Choudary
Appellant's employees, associations and demonstrations
"fell under the malign influence of [ALM] fanatics who were considerably older, and had been immersed in extremist ideology for longer than him."
The appellant's evidence was that although Ziamani may have attended courses at Best Training, he could not recall ever meeting him. Although photographed close by each other, he could not recall meeting him at the demonstration they both attended on 9 May 2014 outside the Indian High Commission.
The appellant's designation
"without financial support of [the appellant], ALM could not exist as a functioning entity."
In evidence Detective Sergeant Collins accepted that this was in error and that what should have been said was that without the appellant's support, ALM could not have functioned at 32 New Road. The statement of case also referred to the appellant receiving £10,000 from Omar Butt, an Islamic extremist in Manchester, which "shows the extent of his network". In his evidence the appellant explained this as a loan. In conclusion, the statement of case said that at that stage there were no other means of managing the risk posed in relation to the appellant's access to funds and ability to generate them.
"Inorder
for the statutory test for designation to be met, evidence must demonstrate that the individual(s) is or has been involved in terrorist activity, and that the asset freeze is necessary for public protection. The case outlined above, and covered in more detail in Annex A, C, D and E, demonstrates that Choudary has been supporting a proscribed organisation by funding and providing a safe meeting place for the organisation and facilitating the group's activities by funding employment opportunities in an otherwise failing business for its key members. By doing so he has enabled the organisation to grow."
"ALM could not have continued to exist as a functioning entity from 32 New Road…"
The case on the second threshold was explained by reference to the appellant's track record of terrorist financing, his business history showed he could access significant funds, he had the potential to build a business via his contacts and proven business acumen, and he had the intention to do this as demonstrated by his approach to the Treasury for a licence. The submission continued that the Security Service assessment in November 2015 was that without the freeze he would be able to re-establish his financial position and provide support to ALM. Some £106,000 was owed to Best Training for training work it had undertaken and by the bank. That would have to be paid to him. The submission added that due to funds put into Yummy Sweets when it was failing, the appellant had accumulated a large mortgage and considerable personal debt. The police investigation had found that this financial support was used to prop up Yummy Sweets for continued use by ALM members.
"(a) your assets have been frozen for a relatively short period of time;
(b) over the previous year, other restrictive measures (e.g. bail conditions), imposed on you and a number of your associates, that may have served to reduce engagement in terrorist activity, have been lifted. The asset freeze remains an important measure in helping to prevent funds/assets being made available to support the activities of individuals associated with ALM; and
(c) without financial restrictions, there remains a risk that you would use funds to support terrorist activity.
Due to the ongoing police investigation the Minister has decided, in accordance with section 3 of the [2010] Act, that the decision to designate should be notified only to those considered appropriate and should not be publicised generally."
The appeals
Conclusion
Court Ref: CO/…/…
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
IN THE MATTER OF AN APPEAL PURSUANT TO s.26 OF THE TERRORIST ASSET-FREEZING ACT 2010
B E T W E E N:
Appellant
Respondent