Strand, London, WC2A 2LL
B e f o r e :
| THE QUEEN
(on the application of Diana Elias)
|SECRETARY OF STATE FOR DEFENCE
COMMISSION FOR RACIAL EQUALITY
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr Phillip Sales and Mr Martin Chamberlain (instructed by Treasury Solicitors) for the Defendant
Mr David Pannick Q.C. and Mr David Pievsky (instructed by The Commission for Racial Equality) for the Intervenor
Crown Copyright ©
Mr Justice Elias:
This is an application for judicial review. The Claimant Diana Elias is now 81. Her parents were both Jewish; her mother was from Iraq and her father from Iraq or India. She was born in Hong Kong on 9th January 1924 and she was registered, as a British subject, with the British High Commission in Hong Kong. She was still in Hong Kong when the Japanese forces invaded that territory in 1941. The British authorities gave a list of British subjects to the Japanese. Her name was included on that list together with her parents and siblings. Her home was raided and she and her family were all interned by the Japanese, by virtue of being British civilians, in Stanley Camp. She was there between 1941 and the liberation of Hong Kong in 1945. During that period she suffered extremely traumatic experiences which it is not necessary to recount. She has suffered serious psychological effects identified in a medical report from Professor Robbins. Mrs Elias remains a British citizen. From 1945 until 1976 she lived partially in this country and since 1976 she has lived here full time. Her children and all her grandchildren are British citizens.
The scheme in issue in this case has already been the subject of two challenges in the courts. First, in R (Association of British Civilian Internees: Far East Region) v Secretary of State for Defence  EWCA Civ 473  QB 1397 ("the ABCIFER case") it was claimed that the criteria were unlawful because they were disproportionate and /or irrational, and also on the ground that they defeated the legitimate expectation, created it was alleged by the announcement in Parliament setting up the scheme, that those who were British subjects at the time of their internment would be entitled to the compensation. The Court of Appeal, Lord Phillips of Worth Matravers MR, Schiemann and Dyson LJJ rejected the challenge. The court held, after reviewing a number of authorities, that proportionality had not replaced the test of rationality in judicial review claims which raised no Human Rights or European Community Law issues. It was further held that the objective of seeking to limit the beneficiaries of the scheme to those with close links to the United Kingdom at the time of the internment, and the introduction of the birth link criteria to demonstrate those close links, were rational. The court also held that there was no frustration of any legitimate expectation. The grounds now being advanced were not pursued in that case.
I will not set this out in any detail. It was fully and helpfully recounted in the judgment of Lord Justice Dyson handing down the judgment of the court in the ABCIFER case: see paragraphs 8 to 31. The bare bones are as follows. It was announced that the scheme would be set up on 7th November 2000. Dr Mooney, then Parliamentary Under Secretary for Defence, informed the House of Commons that "British civilians who were interned" would receive the compensation.
"In reaching this definition we were guided by our understanding that the Ministerial intention was that there should be a requirement that the Claimant should have had strong links with the UK. We initially considered that a strong link with the UK required that either the Claimant or at least one of their parents was born in the UK.
In extending the link to the UK back to grandparents, we bore in mind representations made by ABCIFER in respect of the Governments proposals on a distinct but analogous matter, namely to revise the policy for determining whether a former civilian Far East internee "belongs to the UK" for the purpose of entitlement to a War Pension".
It is somewhat ironical that it is the extension back to grandparents which is relied upon as an important element in the alleged discrimination in this case. However, if the unlawful discrimination is made out, it is trite law that the fact that it resulted from benign intentions is irrelevant.
In the context of the history of the scheme as a whole, I turn briefly to deal with the factual background relating to Mrs Elias' own claims. Soon after the scheme was set up, she made a claim for compensation. At that stage she understood that she would be eligible as a British citizen, and it was only through correspondence that she appreciated that she was being denied the payment because she did not satisfy the criteria. She wrote a number of letters to the Prime Minister, but to no avail. She was formally notified in a letter from the War Pensions Agency on 25th June 2001 that because of her failure to satisfy the criteria, "you are not eligible to receive the ex gratia payment".
The basic principle of discrimination under the Race Relations Act 1976 is found in section 1.
"A person discriminates against another in any circumstances relevant for the purposes of any provision of this Act if-
a. on racial grounds he treats that other less favourably than he treats or would treat other persons: or
b. he applies to that other a requirement or condition
which he applies or would apply equally to persons not of the same racial group as that other but-
(i) which is such that the proportion of persons of the same racial group as that other who can comply with it is considerably smaller than the proportion of persons not of that racial group who can comply with it; and
(ii) which he cannot show to be justifiable irrespective of the colour, race, nationality or ethnic or national origins of the person to whom it is applied;
(iii) which is to the detriment of that other because he cannot comply with it"
The former discrimination identified in sub paragraph (a) is generally known as direct discrimination and that in sub paragraph (b) as indirect discrimination. The difference between them is that direct discrimination is not capable of being justified whereas indirect discrimination is.
3(1) "racial grounds means any of the following grounds, namely colour, race nationality or ethnic or national origins;
"racial group" means a group of persons defined by reference to colour, race nationality or ethnic or national origins, and references to a person's racial group refer to any racial group into which he falls".
3(2) "The fact that a racial group comprises two or more distinct racial groups does not prevent it from constituting a particular racial group for the purposes of the Act".
"(1A) A person also discriminates against another if, in any circumstances relevant for the purposes of any provision referred to in subsection (1B), he applies to that other as provision, criterion or practice which he applies or would apply equally to persons not of the same race or ethnic or national origins as that other, but-
(a) which puts or would put persons of the same race or ethnic or national origins as that other at a particular disadvantage when compared with other persons.
(b) which puts that other at that disadvantage, and
(c) which he cannot show to be a proportionate means of achieving a legitimate aim".
I preface my analysis of the arguments in this case by making the trite but important observation that I am not concerned directly with the merits of the scheme which have been adopted. It is not for the court to determine whether the government ought to have been more generous or should have committed further public funds to widen the scope of those who might be eligible. The only issue for the court is whether, in adopting the scheme, the government has acted in some way unlawfully. As I have indicated, certain challenges to the lawfulness of the scheme have been tried and failed. But it is accepted that this case raises distinct grounds which were not directly pursued in the ABCIFER case.
The first ground of challenge is that the Minister has acted unlawfully in fettering his discretion and refusing to consider whether Mrs Elias should be treated as an exceptional case, either because of the particularly harsh treatment meted out to her, or because she has developed a very close connection now with the United Kingdom.
"The general rule is that anyone who has to exercise a statutory discretion must not "shut his ears to an application"……I do not think there is any great difference between a policy and a rule. There may be cases where an officer or authority ought to listen to a substantial argument reasonably presented urging a change of policy. What the authority must not do is to refuse to listen at all. But a Ministry or large authority may have to deal already with a multitude of similar applications and then they will almost certainly have evolved a policy so precise that it could well be called a rule. There can be no objection to that, provided the authority is always willing to listen to anyone with something new to say-of course I do not mean to say there need be an oral hearing."
"As the argument before us developed, it became clear that the substance of the applicant's case was that the Home Secretary failed to recognise the fact that the prerogative of mercy is capable of being exercised in many different circumstances and over a wide range and therefore failed to consider the form of pardon which might be appropriate to meet the facts of the present case. Such a failure is, we think, reviewable."
29. Mr Sales prayed in support of his submissions a decision of Girvan J, sitting as a judge of the Queens' Bench Division in Northern Ireland in Re W's Application  NI 19. The applicant suffered injuries as a result of criminal conduct and sought ex gratia compensation from the Secretary of State. This application was refused without considering the particular facts of the case. The judge held that the common law power had in fact been fettered by statute, but considered whether the facts of the individual case had to be considered assuming that the common law power remained in play. He concluded that they did not:
"The applicant's contention that the Secretary of State was bound to consider the individual circumstances of the applicant before declining to make an ex gratia payment is without substance in the absence of a policy or decision by the Secretary of State to put in place an extra-stutory scheme providing for ex gratia compensation (assuming such a power existed). While as a general principle a decision-making body exercising public law functions entrusted with a discretion must not by the adoption of a fixed rule of policy disable itself from exercising its discretion in individual cases, the existence of a general prerogative power available to a minister differs from a specific policy or specific statuary discretionary power conferred on a decision making body. A policy decision not to make provision for ex gratia compensation payments would itself be undermined by the co-existence of a duty to consider circumstance of individual cases. The consideration of individual cases would only be meaningful in the context of the possibility that ex gratia compensation might be paid. Such an exercise would be meaningless when the Secretary of State does not wish to or intend to make a case to the Treasury or Parliament to permit the funding of such compensation. The Treasury, even if a special case were made out to it by the Secretary of State, would inevitably be bound to consider the financial implications and ramifications for the funding of individual ex gratia payments and would require to explore the extent of the financial commitments required. This would be an impossible task in the absence of a clearly formulated policy relating to an extra-statutory compensation scheme which the Secretary of State has determined not to introduce".
This passage was approved by the Court of Appeal for Northern Ireland (Carswell LCJ, Nicholson and McCollum JJ: (1998) NI 219.
30. Mr Sales also relied upon certain observations of Diplock LJ (as he was) in R v Criminal Injuries Compensation Board ex parte Lain  2 QB 864. The court was there faced with the question whether it could review the exercise of powers exercised pursuant to another common law scheme which provides for compensation for the victims of crimes of violence. Diplock LJ said this (page 887):
"The scheme not only constituted and defined the authority of the board to make such payments but as published to applicants, was a lawful proclamation stating the conditions required to be satisfied by subjects seeking payment of compensation and requiring them as a condition precedent to the receipt of any payment to submit their claims to adjudication by the board in the exercise of its judicial functions."
31. As Mr Sales rightly observes, nowhere is it suggested that the Board should consider whether to compensate persons who claim that they have an exceptional claim, falling outside the scheme.
32. Finally, he also submits that as a matter of policy it would be highly undesirable if the Claimant's submission were right. The obligation to make exceptions in appropriate cases would extend the scope of the scheme and make its funding difficult to predict. Government would be disinclined to create such schemes at all if the effects were subject to such unpredictability. More specifically, he submitted that it would be particularly invidious in the context of its scheme for the Minister to make exceptions on the basis that some internees had suffered more grievously at the hands of the Japanese than others. I think there is merit in both these observations but I do not think they bear directly on the point in issue. The Claimant's contention is that it is implicit in the exercise of any common law powers by a public body that the possibility of exceptions will always have to be considered. The particular adverse consequences of requiring the application of such a principle in a particular context cannot be an answer to the existence of the principle itself, although it may be highly relevant to the question how, if there is a duty to consider such exceptions, that duty can properly be exercised.
I turn to the contention that the scheme has unlawfully discriminated against the Claimant on grounds of national origin. The Claimant also submits that there are other forms of unlawful discrimination, but for reasons I give below I do not think that it is necessary to give them separate consideration. It is alleged that there is both direct and indirect discrimination and I will deal with each separately.
The leading authority on the meaning of national origins is Ealing London Borough Council v Race Relations Board  AC 342. In that case the House of Lords had to consider whether discrimination on grounds of national origins encompassed discrimination on grounds of nationality. The background was that the local authority maintained a waiting list of applicants qualified for housing accommodation. It was a condition of being accepted on the list that the person was a British subject within the meaning of the British Nationality Act 1948. At that time the Race Relations Act did not outlaw discrimination on grounds of nationality but only national origin. The House of Lords had to determine whether the rule amounted to such unlawful discrimination. Their Lorships held by a majority (Lord Donovan, Viscount Dilhorne, Lord Simon of Glaisdale, Lord Cross of Chelsea, Lord Kilbrandon dissenting) that it did not. Their Lordships considered what was meant by the concept of national origins. Viscount Dilhorne referred to a passage from Oppenheim's International Law 8th Edition (1955) in which the author had distinguished between two meanings of nationality, one in the sense of citizenship of a state and the other membership of a certain nation in the sense of race. He concluded, bearing in mind the racial objects of the Race Relations legislation, that in the context of this Act the concept "national origins" meant national in the sense of race and not citizenship.
"To me it suggests a connection subsisting at the time of birth between an individual and one or more groups of people who can be described as a "nation" – whether or not they also constitute a sovereign state. The connection will normally arise because the parents or one of the parents of the individual in question are or is identified by descent with the nation in question, but it may also sometimes arise because the parents have made their home among the people in question. Suppose, for example, that a man of purely French descent marries a woman of purely German descent and that the couple have made their home in England for many years before the birth of the child in question. It could, I think, fairly be said that the child had three "national origins": French through the father, German through the mother and English not because he happened to have been born here but because his parents made their home here. Of course, in most cases a man has only a single "national origin" which coincides with his nationality at birth in the legal sense and again in most cases his nationality remains unchanged throughout his life. But "national origins" and "nationality" in the legal sense are two quite different conceptions and they may well not coincide or continue to coincide".
"A person's place of birth may be entirely fortuitous to say that a person was born a German is different from saying he was born in Germany. There is an intrinsic distinction between narrow national origins and place of birth. The distinction was recognised in the opinions of the House of Lords in Ealing London Borough Council v Race Relations Board  AC 342 …
"Would the complainant have received the same treatment from the Defendant but for his or her sex."?
If one applies the "but for" test here it is not possible to say she would inevitably have been treated the same way. Even as someone with non-British national origins she might have qualified had a parent or grandparent been born in the United Kingdom whether or not they were of British national origin. Conversely, a comparator who did have British national origins would not inevitably qualify.
The Secretary of State has rightly conceded, albeit late in the day, that the criteria involved in this case inevitably involve indirect discrimination on grounds of national origin. They treat less favourably those who are of non-British origin. It surely did not need specific statistical evidence to establish that conclusion. Moreover, the Court of Appeal has held, after reviewing the case law of the European Court of Justice, that it is not necessary in all cases to adduce statistical evidence to establish disparate impact: see Secretary of State for Work and Pensions v Bobezes  EWCA Civ 111 per Lord Slynn at para 24. Where the effects are obvious or intrinsic to the scheme being adopted, as in my opinion they clearly are in this case, then a broad approach is justified. I should add that the Claimant has produced her own statistics, admittedly of a somewhat sketchy nature, which nonetheless suggest that the rule has had a discriminatory impact of the kind one might expect. It does not only discriminate on grounds of national origin but also on grounds of ethnic origin. Of the 1100 or so members of ABCIFER rejected on the birth criterion, almost a third are non white and a similar proportion are Jewish (as is Mrs Elias.) These groups would constitute a much smaller proportion of the population of Britain.
The classic test for establishing whether or not the indirect discrimination may be justified is found in Bilka-Kaufhaus GmbH v Weber Von Hartz (Case 170/84)  ICR. At paragraph 36 of its decision the European Court of Justice noted that if a measure which has a disparate impact is to be justified then the national court must be satisfied that the measures "correspond to a real need ….are appropriate with a view to achieving the objectives pursued and are necessary to that end".
The reason why the minister adopted this scheme is explained as follows in the ABCIFER case by Lord Justice Dyson (para 42):
"At the time of internment, large numbers of British subjects had no links to the UK save for their being British subjects by reason of the 1914 Act. By the time the scheme came to be set up, the UK had become a medium size European country which had lost its Empire. The situation was very different from what it was at the time of the war when Britain controlled a huge Empire. No doubt the government could have decided to include in the scheme all those who were British subjects at the time of their internment who were not entitled to compensation from their own country. But its failure to do so was not irrational".
The court therefore concluded that in principle it was rational to adopt a scheme to benefit those with a close link with the United Kingdom.
"The denial of a social security benefit to Ms Carson on the ground that she lives abroad cannot possibly be equated with discrimination on grounds of race or sex. It is not a denial of respect for her as an individual. She was under no obligation to move to South Africa. She did so voluntarily and no doubt for good reasons. But in doing so, she put herself outside the primary scope and purpose of the UK social security system. Social security benefits are part of an intricate and interlocking system of social welfare which exists to ensure certain minimum standards of living for the people of this country. They are an expression of what has been called social solidarity or fraternité; the duty of any community to help those of its members who are in need. But that duty generally recognised to be national in character. It does not extend to the inhabitants of foreign countries. That is recognised in treaties such as the ILO Social Security (Minimum Standards) Convention 1952 (article 69) and the European Code of Social Security 1961)"
"The financial consequences of a decision that every applicant who was a British subject at the time of captivity (including POWs) should receive a payment could run into hundreds of millions of pounds. Given the other calls on public revenues, and given the magnitude of the potential liability, the Government had to and did consider the potential financial impact of its decision to frame the criteria in a particular way."
Of course, this goes only to the legitimacy of the objective. The limited resources do not of themselves justify the criteria chosen since a number of different criteria could be used, each of which would limit those eligible for payment in accordance with the Defendant's wishes.
"It cannot be the law that the United Kingdom is prohibited from treating expatriate pensioners generously unless it treats them in precisely the same way as pensioners at home…..And in deciding what expatriate pensioners should be paid, Parliament must be entitled to take into account competing claims on public funds. To say that the reason why expatriate pensioners are not paid the annual increases is to save money is true but only in the most trivial sense; every decision not to pay more on something is to save money to reduce taxes or spend it on something else."
I turn to what in my opinion is the heart of this case, namely whether the criteria chosen could properly be adopted and was proportional to the aim of the measures.
"For completeness, I should add that arguments based on the extent of the discretionary area of judgment accorded to the legislature lead nowhere in this case. As noted in Wilson v First County Trust Ltd (No 2)  1 AC 816, 844 para 70, Parliament is charged with the primary responsibility for deciding the best way of dealing with social problems. The court's role is one of review. The court will reach a different conclusion from the legislature only when it is apparent that the legislature has attached insufficient importance to a person's Convention rights. The readiness of the court to depart from the view of the legislature depends upon the subject matter of the legislation and of the complaint. National housing policy is a field where the court will be less ready to intervene. Parliament has to hold a fair balance between the competing interests of tenants and landlords, taking into account broad issues of social and economic policy. But, even in such a field, where the alleged violation comprises differential treatment based on grounds such as race or sex or sexual orientation the court will scrutinise with intensity any reasons said to constitute justification. The reasons must be cogent if such differential treatment is to be justified."
"On the assumption that the residence qualification is therefore caught by section 1(1)(b)(i), it is necessary to consider under 1(1)(b)(ii) whether the requirement is "justifiable irrespective of the colour, race, nationality or ethnic or national origins of the [student] to whom it is applied." Nationality is the only one of these grounds which is in question in this appeal. "Justifiable" means, in my opinion, "capable of being justified." "Irrespective of" in that subsection means "without regard to," as I said in Mandla (Sewa Singh) v. Dowell Lee  2 AC 548, 566, and I see no reason to alter that opinion. No doubt the main reason for introducing the residence requirement was, as Mr. Scrivener said, to curtail public expenditure on education in the interest of economy. That reason itself did not involve discrimination on racial grounds. But the particular method of curtailment may have done so. Various methods of curtailing the expenditure were possible; grants to all students could have been cut by an equal percentage, and their fees could have been correspondingly increased, or grants could have been restricted by reference to the academic qualifications of applicants. No doubt many other methods were possible. The method chosen was to concentrate grants on home students, and to cease subsidising foreign students. The justification relied on by the college is set out in more detail in the further and better particulars of their defence which includes statements to the following effect.
"3. The fees of home students are subsidised. There is no good reason why the fees of overseas students should be subsidised from public funds ... 4. The government cannot afford to subsidise overseas students. 6. The use of fees is a legitimate means of regulating the admission of overseas students and has the advantage of reducing public expense ... 7. The previous system had resulted in a large increase in numbers and a large increase in the cost to the British taxpayers with little relationship between the pattern of those large student numbers and Britain's own long-term priorities."
These statements show that the main motive for introducing the residence requirement was economy. But the economy was to be effected at the expense of foreign students. That may have been a perfectly reasonable and justifiable policy for the British Government to adopt but in my opinion the college, on whom the onus lies under section 1(1)(b)(ii), has not been able to justify the requirement without having regard to the nationality of the applicants at whose expense the policy was carried into effect. The typical example of a requirement which was caught by section 1(1)(b)(i) but which was nevertheless justifiable irrespective of racial grounds was Panesar v. Nestle Co. Ltd. (Note)  I.C.R. 144 (mentioned in Mandla (Sewa Singh) v. Dowell Lee  2 AC 548, 567) where it was held that a rule forbidding the wearing of beards in the respondent's chocolate factory was justifiable on hygienic grounds notwithstanding that the proportion of Sikhs who could conscientiously comply with it was considerably smaller than the proportion of non-Sikhs who could comply with it. The justification there was purely a matter of public health and nothing whatever to do with racial grounds. But in the present case the discrimination is in accordance with a policy directed against persons who are not ordinarily resident in the E.E.C. area, and ordinary residence is in my view so closely related to their nationality that the discrimination cannot be justified irrespective of nationality.
For these reasons I agree with May L.J. that the college did discriminate on racial grounds against Mr. Orphanos".
Section 71(1) of the 1976 Act provides that:
"Every body or other person specified in Schedule 1A or of a description falling within that Schedule shall, in carrying out its functions, have due regard to the need-
(a) to eliminate unlawful racial discrimination; and
(b) to promote equality of opportunity and good relations between persons of different racial groups."
The Defendant is one of the persons specified in Schedule 1A.
"A Race Equality Scheme shall state, in particular-
(a) those of its functions and policies, or proposed policies, which that person has assessed as relevant to its performance of the duty imposed by section 71(1) of the Race Relations Act;
(b) that person's arrangements for-
(i) assessing and consulting on the likely impact of its proposed policies on the promotion of race equality;
(ii) monitoring its policies for any adverse impact on the promotion of race equality;
(iii) publishing the results of such assessments and consultation as are mentioned in sub paragraph (i) and of such monitoring as is mentioned in sub paragraph (ii);
(iv) ensuring public access to information and services which it provides; and
(v) training staff in connection with the duties imposed by section 71(1) of the Race Relations Act and this Order
I uphold the application for judicial review on two grounds. First, I consider that the scheme adopted was unlawful and indirectly discriminated against those of non-British national origin. The desire of the government to limit the category of those who could claim under the scheme to persons with a close link with the United Kingdom at the time of internment was a legitimate aim. But in adopting criteria which assessed eligibility by reference to the place of birth of the applicant, a parent or grandparent, the effect was markedly to reduce the proportion of those of non-British national origin compared to those whose national origin was British. The Secretary of State has not satisfied me that these provisions were justifiable in all the circumstances.