Dalston Projects Ltd v Secretary of State for Transport

Hearing dates: 17–19 January 2024

Approved Judgment

This judgment was handed down remotely at 10 a.m. on 27 February 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Introduction

These two appeals both concern decisions that were taken by the Respondents under the Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2019 No 855) (“the 2019 Regulations”), which were made under the Sanctions and Anti-Money Laundering Act 2018 (“SAMLA”). Both appeals arise from claims that were brought in the High Court under section 38 of SAMLA.

Before I turn to each appeal separately, I will address two questions which are common to both. First, what principles should a first-instance court apply when reviewing a decision of the executive on grounds of proportionality under the Human Rights Act 1998 (“ HRA”)? Secondly, what principles should an appellate court apply when reviewing a decision of a lower court in such a case? Neither of these questions is new. Far from it: a great deal has been said about them both by the Appellate Committee of the House of Lords and the Supreme Court. Nevertheless, as the judgment of the High Court in Shvidler illustrates, the principles are not always as well understood as they need to be and so it will be helpful to summarise them here, to assist first-instance and appellate courts from hereon.

The Human Rights Act 1998

Section 6(1) of the HRA makes it unlawful for a public authority to act in a way which is incompatible with a Convention right, that is one of the rights in the European Convention on Human Rights which are set out in Schedule 1 to the HRA.

The relevant Convention rights for present purposes are Article 1 of the First Protocol (“A1P1”) and Article 8.

A1P1 relates to the protection of property and states:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provision shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interests or to secure the payment of taxes or other contributions or penalties.”

Article 8 concerns the right to respect for private and family life and states:

“(1) Everyone has the right to respect for his private and family life, his home and his correspondence.

(2) There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.”

Section 7(1) of the HRA provides that a person who claims that a public authority has acted (or proposes to act) in a way which is made unlawful by section 6(1) may (a) bring proceedings against the authority in the appropriate court or tribunal, or (b) rely on the Convention rights concerned in any legal proceedings, provided he is (or would be) a “victim” of the unlawful acts.

Accordingly, Parliament has made violation of a Convention right, contrary to section 6(1) of the HRA, one of the grounds upon which a claim for judicial review can be brought. Section 38(4) of SAMLA provides that: “In determining whether the decision should be set aside, the court must apply the principles applicable on an application for judicial review.” Accordingly, breach of section 6(1) of the HRA is a ground for review under section 38 of SAMLA.

The principle of proportionality

The question whether or not an act of a public authority is incompatible with a Convention right will often depend on whether it complies with the principle of proportionality. That principle has been explained in the authorities as having four limbs, as set out by Lord Reed JSC in Bank Mellat v HM Treasury (No 2) [2013] UKSC 39; [2014] AC 700 (“ Bank Mellat”), at para 74. It is necessary to determine: (1) whether the objective of the measure is sufficiently important to justify the limitation of a protected right; (2) whether the measure is rationally connected to the objective; (3) whether a less intrusive measure could have been used without unacceptably compromising the achievement of the objective; and (4) whether the measure's contribution to the objective outweighs the effects on the rights of those to whom it applies. The fourth limb is sometimes referred to as the “fair balance” issue or “proportionality stricto sensu”, i.e. in the strict sense. Although Lord Reed was in the minority in Bank Mellat, there was nothing in his formulation of the concept of proportionality with which Lord Sumption JSC (who gave the main judgment for the majority) disagreed: see para 20.

As Lord Reed made clear at paras 72–73, the origins of the four-limb test in Bank Mellat can be found in the judgment of Dickson CJ in the Supreme Court of Canada in R v Oakes [1986] 1 SCR 103 (“ Oakes”) and the Judicial Committee of the Privy Council in de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing [1999] 1 AC 69 (“ de Freitas”), at page 80 (Lord Clyde). The fourth limb was to be found in Oakes but had been (apparently inadvertently) omitted in de Freitas. It was reinstated by the House of Lords in Huang v Secretary of State for the Home Department [2007] UKHL 11; [2007] 2 AC 167 (“ Huang”), at para 19 (Lord Bingham).

The role of the first-instance court when assessing proportionality

It is well-established that the question whether an act is incompatible with a Convention right is a question of substance for the court itself to decide; the court's function is not the conventional one in public law of reviewing the process by which a public authority reached its decision: see e.g. Belfast City Council v Miss Behavin' Ltd [2007] UKHL 19; [2007] 1 WLR 1420, at paras 13–15 (Lord Hoffmann). As Lord Hoffmann put it at the end of para 15:

“… the question is … whether there has actually been a violation of the applicant's Convention rights and not whether the decision-maker properly considered the question of whether his rights would be violated or not.”

I have some sympathy with first-instance judges such as Garnham J in Shvidler because what the appellate courts have sometimes said may be apt to mislead unless read very carefully. By way of example in R (Al Rawi and Others) v Secretary of State for Foreign and Commonwealth Affairs and Another [2006] EWCA Civ 1279; [2008] QB 289, in a well-known passage at para 148, Laws LJ (when considering issues touching both the conduct of foreign relations and national security) said that:

“The court's role is to see that the Government strictly complies with all formal requirements, and rationally considers the matters it has to confront. Here, because of the subject matter, the law accords to the executive an especially broad margin of discretion.”

The reason why that passage may be apt to mislead is that the first sentence may give the impression that the court is confined to asking whether the Government has “rationally considered” the matters which it must confront, whereas the second sentence makes it clear that the true principle is that the executive is afforded an “especially broad margin of discretion”. So long as it is understood that the court's function is still to decide for itself whether there has been compliance with the principle of proportionality, and not simply to apply a standard of rationality, the first-instance court will not fall into error.

The fact that the court is the arbiter of proportionality does not mean that there is no room for appropriate respect and weight to be given to the views of the executive or legislature. This was made clear by Lord Sumption in Bank Mellat, at para 21, where he referred to the need, in the context of that case, to allow “a large margin of judgment”; and by Lord Reed, at paras 70–71, where he said that the “intensity of review varies considerably according to the right at issue and the context in which the question arises”.

Lord Sumption repeated this important point in R (Lord Carlile of Berriew and Others) v Secretary of State for the Home Department [2014] UKSC 60; [2015] AC 945 (“ Lord Carlile”), at para 20. As Lord Sumption said at para 30, it is preferable to avoid the...