Mellat v Her Majesty's Treasury (Rev 1)

Article 6(1) guarantees every party to civil litigation an irreducible minimum right to sufficient information about the evidential case against it to permit effective instructions. That minimum applies even where relevant material is withheld in the public interest through a closed material procedure.

Disclosure must enable the party, so far as possible, to refute the essential allegations rather than merely deny them. Its precise extent is fact-specific. An appellate court will ordinarily defer to the first instance judge's assessment unless the judge erred in principle.

HM Treasury made a direction under Schedule 7 to the Counter-Terrorism Act 2008 prohibiting persons operating in the UK financial sector from transacting or maintaining business relationships with Bank Mellat. The Bank applied under section 63 to set the direction aside. The application involved open and closed evidence under CPR Part 79.

Mitting J held in [2010] EWHC 350 (QB) that the Treasury had to disclose enough information to enable the Bank to give effective instructions about the essential allegations against it. The Treasury appealed, contending that article 6(1) required a contextual balance rather than an immutable disclosure minimum. The Bank cross-appealed against the detailed disclosure ordered in the closed proceedings.

1. Both the Treasury's appeal and the Bank's cross-appeal were dismissed unanimously. Mitting J had identified the correct disclosure standard and applied it without any demonstrated error of principle.

2. Article 6(1) has procedural requirements which may often require a balance between a litigant's interests and the wider public interest. Nevertheless, it also guarantees irreducible minimum rights. Every party to litigation within article 6(1) must receive sufficient information about the evidential case against it to give effective instructions concerning that case. The disclosure standard described and applied in Secretary of State for the Home Department v AF (No 3) [2009] UKHL 28 therefore applied to the Bank's challenge notwithstanding the use of a closed material procedure.

3. The Treasury's information had to do more than enable the Bank merely to deny the allegations. It had to enable the Bank, so far as possible, actually to refute the essential allegations relied upon to justify making and continuing the direction. The minimum could not be displaced by a general balancing exercise based on the public interest in withholding material.

4. The precise information required is fact-specific. Relevant considerations include the issues between the parties, the statements of case, the nature and significance of the evidence, and the state of the affected party's knowledge.

5. A first instance judge's assessment of the disclosure required by article 6(1) is evaluative and will ordinarily attract appellate restraint. An appeal may succeed where the judge went wrong in principle. A party proposing such an appeal should first invite the judge to explain briefly the reasons for the particular disclosure ruling.

Lord Neuberger MR delivered the judgment. Maurice Kay and Sullivan LJJ agreed.

1. Court of Appeal (Civil Division): In [2010] EWCA Civ 483, unanimously dismissed the Treasury's appeal and the Bank's cross-appeal. It upheld the disclosure standard adopted below.
2. High Court, Administrative Court: Mitting J held in [2010] EWHC 350 (QB) that the Treasury had to disclose sufficient information to permit effective instructions about the essential allegations. In a closed judgment he gave detailed directions concerning the required disclosure.