A v HM Treasury

The Supreme Court considered whether the Treasury had power under section 1 of the United Nations Act 1946 to make Orders in Council that introduced long-term asset‑freezing and related prohibitions directed at persons identified under United Nations Security Council Resolutions. The court applied the principle of legality and tested the Orders against the wording of the Security Council resolutions they purported to implement.

Key holdings: the Terrorism (United Nations Measures) Order 2006 (the TO) was ultra vires the 1946 Act so far as it allowed designation and indefinite freezing by reference to the lower test of "reasonable grounds for suspecting". Article 3(1)(b) of the Al‑Qaida and Taliban (United Nations Measures) Order 2006 (the AQO), which subjected to domestic asset‑freezing any person designated by the UN 1267 Sanctions Committee without any domestic right to an effective merits review, was ultra vires the 1946 Act for denying an effective judicial remedy. The courts quashed the TO and declared article 3(1)(b) of the AQO ultra vires, subject to limited suspension to allow the executive to consider next steps.

Background and parties:

• The Treasury made Orders in Council under section 1 of the United Nations Act 1946 to implement UN Security Council Resolutions aimed at freezing funds and other economic resources connected with terrorism. Appellants A, K and M (brothers) and G were designated and had directions made against them under the Terrorism Order 2006; HAY was listed by the UN 1267 Sanctions Committee and thereby became subject to the Al‑Qaida Order. The designations prevented the appellants dealing with funds or economic resources and imposed intrusive conditions on families.

Nature of the claims and relief sought:

• The designated persons sought to set aside directions under article 5(4) of the TO and to challenge the lawfulness of the Orders. Grounds included that the 1946 Act did not authorise such measures (principle of legality), lack of legal certainty and proportionality, interference with Convention rights under the Human Rights Act 1998, and absence of an effective judicial remedy against listings by the UN Sanctions Committee.

Procedural history:

• Applications were heard in the Administrative Court (Collins J and Owen J). Collins J had quashed both Orders; the Court of Appeal allowed the Government's appeal in part ([2008] EWCA Civ 1187), striking out the words "or may be" from the TO. Leave was given to appeal to the Supreme Court.

Issues framed by the court:

• Whether Orders made under section 1 of the 1946 Act could lawfully introduce the asset‑freezing regimes as enacted;
• whether the TO went beyond the scope of the Security Council Resolution (SCR 1373) by employing a reasonable‑suspicion test;
• whether the AQO unlawfully denied access to an effective domestic remedy to persons designated by the UN Sanctions Committee;
• whether the Orders were incompatible with Convention rights under the Human Rights Act.

Court’s reasoning (concise):

• The court applied the principle of legality: general empowering words in a statute will not be taken to authorise interference with fundamental rights unless Parliament’s intention to permit that is clear. Section 1(1) was to be read in light of the content and specificity of the relevant Security Council Resolutions.
• The TO: the court held that introducing a permanent freezing regime applicable on the basis only of "reasonable grounds for suspecting" went beyond what was "necessary or expedient" to give effect to SCR 1373 and hence exceeded the 1946 Act; such a serious, indefinite interference with basic rights required clearer parliamentary authority.
• The AQO: persons listed by the 1267 Sanctions Committee (article 3(1)(b)) were subject to freezing in domestic law but, because the international listing procedure provided no effective means of merits review in domestic courts and gave the designated person no adequate access to the material underlying the listing, article 3(1)(b) deprived those persons of an effective judicial remedy and so was ultra vires section 1(1).
• On Convention‑based challenges the court proceeded on the basis of established authorities (in particular R (Al‑Jedda)) that obligations under the UN Charter have primacy in international law, but concluded at the domestic level that the 1946 Act did not empower the executive to enact the impugned provisions without clearer Parliamentary endorsement.

Remedy and practical steps:

• The court quashed the TO and declared article 3(1)(b) of the AQO ultra vires; it suspended the operation of the AQO declaration for one month to allow the Treasury time to consider measures, and addressed the limited relief appropriate in HAY’s case.

Appeal allowed in part. The Supreme Court held that the Terrorism (United Nations Measures) Order 2006 was ultra vires section 1(1) of the United Nations Act 1946 because the use of an indefinite asset‑freezing regime based on a "reasonable grounds for suspecting" test went beyond what was "necessary or expedient" to implement the Security Council resolution. It also held that article 3(1)(b) of the Al‑Qaida and Taliban (United Nations Measures) Order 2006 was ultra vires because it subjected persons listed by the UN 1267 Sanctions Committee to domestic freezing without any effective means of merits review, thereby denying access to an effective judicial remedy; the court quashed the TO and declared article 3(1)(b) invalid, with limited suspension to enable the executive to respond.

High Court (Administrative Court): Collins J quashed the Orders [2008] EWHC 869 (Admin); Owen J granted relief in HAY’s case [2009] EWHC 1677 (Admin). Court of Appeal allowed the Treasury’s appeal in part, striking out "or may be" from the TO: [2008] EWCA Civ 1187. Leave to appeal to the Supreme Court was granted (appeals heard October 2009; judgment 27 January 2010).