UKSC 38
On appeal from:  EWCA Civ 1
Bank Mellat (Appellant) v Her Majesty's Treasury (Respondent) (No. 1)
Michael Brindle QC
Dr Gunnar Beck
(Instructed by Zaiwalla and Co)
Jonathan Swift QC
Tim Eicke QC
(Instructed by Treasury Solicitors)
Martin Chamberlain QC
(Instructed by the Special Advocates Support Office)
|Advocate to the Court
Robin Tam QC
(Instructed by Treasury Solicitors)
Nicholas Vineall QC
(Instructed by Zaiwalla and Co)
Dinah Rose QC
(Instructed by Liberty)
LORD NEUBERGER (with whom Lady Hale, Lord Clarke, Lord Sumption and Lord Carnwath agree)
(i) Is it possible in principle for the Supreme Court to adopt a closed material procedure on an appeal? If so,
(ii) Is it appropriate to adopt a closed material procedure on this particular appeal?
A closed material procedure involves the production of material which is so confidential and sensitive that it requires the court not only to sit in private, but to sit in a closed hearing (ie a hearing at which the court considers the material and hears submissions about it without one of the parties to the appeal seeing the material or being present), and to contemplate giving a partly closed judgment (ie a judgment part of which will not be seen by one of the parties).
Open justice and natural justice
"[T]he right to be confronted by one's accusers is such a fundamental element of the common law right to a fair trial that the court cannot abrogate it in the exercise of its inherent power. Only Parliament can do that".
"Where, however, the open material consists purely of general assertions and the case against the [excluded party] is based solely or to a decisive degree on closed materials the requirements of a fair trial will not be satisfied, however cogent the case based on the closed materials may be."
The statutory and factual background to this appeal
The closed material procedure in the courts of England and Wales
"The following provisions apply to rules of court relating to—
(a) financial restrictions proceedings, or
(b) proceedings on an appeal relating to financial restrictions proceedings."
Section 66(2) requires the "rules of court" to have regard to "the need to secure that" both (a) directions made under schedule 7 to the 2008 Act "are properly reviewed", and (b) that information is not disclosed "when [it] would be contrary to the public interest".
"'rules of court' means rules for regulating the practice and procedure to be followed in the High Court or the Court of Appeal or in the Court of Session".
The statutory provisions and procedural rules of the Supreme Court
"(1) Every contested appeal shall be heard in open court except where it is necessary in the interests of justice or in the public interest to sit in private for part of an appeal hearing.
(2) Where the Court considers it necessary for a party … to be excluded from a hearing or part of a hearing in order to secure that information is not disclosed contrary to the public interest, the Court must conduct the hearing, or that part of it from which the party [is] excluded, in private but the Court may exclude a party … only if a person who has been appointed as a special advocate to represent the interests of that party is present when the party [is] excluded.
(3) Where the Court decides it is necessary for the Court to sit in private, it shall announce its reasons for so doing publicly before the hearing begins.
Can the Supreme Court conduct a closed material procedure: introductory
The case for saying that this Court can conduct a closed material procedure
The arguments that we cannot conduct a closed material procedure
i. A closed material procedure is such a serious inroad into natural justice that it can only be justified by clear and unambiguous statutory words, such as are found in Part 6 of the 2008 Act, but not in the 2005 Act;
ii. Parliament has plainly limited the closed material procedure under the 2008 Act to the High Court, the Court of Appeal and the Court of Session;
iii. It is appropriate to exclude the Supreme Court from the courts which can have a closed material procedure, given its role as a constitutional court and ultimate guardian of the common law;
iv. A closed material procedure requires a set of rules such as CPR 79 which are detailed and appropriately modify the generally applicable rules, and there is no such set of rules for the Supreme Court.
The decision to have a closed material procedure on this appeal
Applications for closed material hearings on appeal
LORD HOPE (dissenting)
(a) the issue of principle
"The common law principles to which I have referred are extremely important and should not be eroded unless there is a compelling case for doing so. If this is to be done at all, it is better done by Parliament after full consultation and proper consideration of the sensitive issues involved. It is not surprising that Parliament has seen fit to make provision for a closed material procedure in certain carefully defined situations and has required the making of detailed procedural rules to give effect to the legislation."
In para 69 he agreed with the Court of Appeal that the issues of principle raised by the closed material procedure were so fundamental that a closed material procedure should only be introduced in ordinary civil litigation if Parliament saw fit to do so. He then added these words:
"No doubt, if Parliament did decide on such a course, it would do so in a carefully defined way and would require detailed procedural rules to be made (such as CPR Pts 76and 79) to regulate the procedure."
(b) should the closed material be seen and considered in this case?
"See further, the last sentence of para 5 of the closed judgment. This point is important in its own right in demonstrating the existence of the rational/proportionate connection."
Mr Eicke QC for the Treasury was asked repeatedly to say what "the point" was to which this paragraph refers. It was made clear that the court was looking not for the details which supported whatever was said in that sentence, but simply for an indication of its subject matter. Mr Eicke declined, no doubt on instruction, to provide this information. He declined also to say what "the point" was to which para 6(3) was directed, where it was said that, to the extent that it was necessary to do so, the Bank's case at para 60 was contradicted by the point at para 2 of the closed judgment. In para 60 of its case the Bank states that there is nothing in the judge's findings to suggest that the Bank had done anything to materially increase the risk that the United Kingdom financial sector would be embroiled in proliferation-related transactions. It seemed reasonable to ask how looking at the closed judgment would assist on this point, but the court was provided with no answer as to how it might do so.
(c) should the court issue a closed judgment?
LORD KERR (dissenting)
"10. There are certain features of a common law trial which are fundamental to our system of justice (both criminal and civil). First, subject to certain established and limited exceptions, trials should be conducted and judgments given in public. The importance of the open justice principle has been emphasised many times: see, for example, R v Sussex Justices, Ex p McCarthy  r KB 256, 259, per Lord Hewart CJ, Attorney General v Leveller Magazine Ltd  AC 440, 449H-450B, per Lord Diplock, and recently R (Mohamed) v Secretary of State for Foreign and Commonwealth Affairs (No 2) (Guardian News and Media Ltd intervening) QB 218, paras 38-39, per Lord Judge CJ.
11. The open justice principle is not a mere procedural rule. It is a fundamental common law principle. In Scott v Scott  AC 417, Lord Shaw of Dunfermline (p 476) criticised the decision of the lower court to hold a hearing in camera as constituting 'a violation of that publicity in the administration of justice which is one of the surest guarantees of our liberties, and an attack upon the very foundations of public and private security'. Viscount Haldane LC (p 438) said that any judge faced with a demand to depart from the general rule must treat the question 'as one of principle, and as turning, not on convenience, but on necessity'.
12. Secondly, trials are conducted on the basis of the principle of natural justice. There are a number of strands to this. A party has a right to know the case against him and the evidence on which it is based. He is entitled to have the opportunity to respond to any such evidence and to any submissions made by the other side. The other side may not advance contentions or adduce evidence of which he is kept in ignorance. The Privy Council said in the civil case of Kanda v Government of Malaya  AC 322,337:
'If the right to be heard is to be a real right which is worth anything, it must carry with it a right in the accused man to know the case which is made against him. He must know what evidence has been given and what statements have been made affecting him: and then he must be given a fair opportunity to correct or contradict them.'
13. Another aspect of the principle of natural justice is that the parties should be given an opportunity to call their own witnesses and to cross-examine the opposing witnesses. As was said by the High Court of Australia in Lee v The Queen (I998) I95 CLR 594, para 32: 'Confrontation and the opportunity for cross-examination is of central significance to the common law adversarial system of trial.'"
"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);
(c) about the functions of a person appointed as a special advocate;
(d) enabling the court to give a party to the proceedings a summary of evidence taken in the party's absence."
"(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);
(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."
"(1) The relevant law officer may appoint a person to represent the interests of a party to-
(a) financial restrictions proceedings, orb) proceedings on an appeal, or further appeal, relating to financial restrictions proceedings, in any of those proceedings from which the party (and any legal representative of the party) is excluded.
This is referred to in this Chapter as appointment as 'a special advocate'."
"(5) The Court has power to determine any question necessary to be determined for the purposes of doing justice in an appeal to it under any enactment."
"(2) Where the Court considers it necessary for a party and that party's representative to be excluded from a hearing or part of a hearing in order to secure that information is not disclosed contrary to the public interest, the Court must conduct the hearing, or that part of it from which the party and the representative are excluded, in private but the Court may exclude a party and any representative only if a person who has been appointed as a special advocate to represent the interests of that party is present when the party and the representative are excluded."
LORD REED (dissenting)
The issue of principle
Whether this court should have adopted a closed material procedure in the present case
LORD DYSON (dissenting in part)