JUDGMENT
R v Forsyth (Appellant)
R v Mabey (Appellant)
before
Lord Hope, Deputy President
Lord Rodger
Lord Walker
Lady Hale
Lord Brown
JUDGMENT GIVEN ON
23 February 2011
Heard on 6 December 2010
Appellant (F) Respondent
John Kelsey-Fry QC Philip Mott QC
Jonathan Barnard Peter Blair QC
Peter Finnigan QC
(Instructed by BCL
Burton Copeland)
(Instructed by Serious
Fraud Office)
Appellant (M) Respondent
Nicholas Purnell QC Philip Mott QC
Clare Sibson Peter Blair QC
Peter Finnigan QC
(Instructed by Kingsley
Napley)
(Instructed by Serious
Fraud Office)
Page 2
LORD BROWN, delivering the judgment of the court
1. The appellants await trial in the Crown Court at Southwark on three counts
of an indictment. Count two charges them with “making funds available to Iraq,
contrary to articles 3(a) and 11(4) of the Iraq (United Nations Sanctions) Order
2000 and section 1 of the United Nations Act 1946”. The particulars of offence
allege that the appellants “being directors of Mabey & Johnson Ltd, between 1
May 2001 and 1 November 2002, consented to, or connived in, the making of
€422,264 available to the government of the Republic of Iraq, or a person resident
in the Republic of Iraq, by Mabey & Johnson, without the authority of a licence
granted by the Treasury.”
2. Mabey & Johnson Ltd were in the business of exporting pre-fabricated
bridges to developing countries and the essential allegation against the appellants
is that they consented to the company’s entering into an arrangement which
facilitated the Iraqi Government’s avoidance of international sanctions by allowing
it indirectly to access funds held in a United Nations controlled account. The
appellants have pleaded not guilty both to that count and to the other two counts,
each of false accounting.
3. The appellants have sought to have count two quashed on the basis that the
Iraq (United Nations Sanctions) Order 2000 (SI 2000/3241) was ultra vires section
1 of the United Nations Act 1946. In essence they say that such an Order cannot be
made under the 1946 Act unless made “at or about the same time” as the Security
Council Resolution which it is implementing is itself made. This Order was made
10 years after the relevant Resolution. The argument failed before Judge Rivlin
QC, the Recorder of Westminster, at a preparatory hearing at Southwark on 18
June 2010 (conducted pursuant to section 7 of the Criminal Justice Act 1987). It
failed again on an interlocutory appeal (brought by leave of the Recorder pursuant
to section 9(11) of the 1987 Act) to the Court of Appeal (Criminal Division),
(Hooper LJ, Owen and Roderick Evans JJ) on 22 October 2010: [2010] EWCA
Crim 2437. The Court of Appeal refused leave to appeal but certified two points of
law of general public importance:
“(i) May the power to create criminal offences granted to Her
Majesty in Council by section 1 of the United Nations Act 1946 only
lawfully be exercised at or about the time of the relevant Security
Council Resolution?
Page 3
(ii) If yes, are articles 3(a) and 11(4) of the Iraq (United Nations
Sanctions) Order 2000 to the extent to which they create a criminal
offence, ultra vires section 1 of the United Nations Act 1946 given
that the relevant Security Council Resolution was adopted in 1990?”
The matter came before this court on 6 December 2010 when, at the outset of the
hearing, the appellants were granted permission to appeal; at the conclusion of the
hearing the appeal was dismissed for reasons to be given later. These reasons now
follow.
4. It is convenient at once to set out the most material parts of the three
instruments here calling for particular consideration, beginning with the Security
Council Resolution (“SCR”) referred to in the two certified questions.
(1) SCR 661 (1990) (“SCR 661”) was adopted by the Security Council under
Chapter VII of the UN Charter on 6 August 1990 (four days after Iraq invaded
Kuwait, an invasion condemned that same day by SCR 660 (1990)). The Council
reaffirmed SCR 660; by article 2 they decided to take measures to secure Iraq’s
compliance with it; by article 3 they imposed an embargo on trade with Iraq and
Kuwait; and by article 4 the Council:
“decides that all states shall not make available to the government of
Iraq, or to any commercial, industrial or public utility undertaking in
Iraq or Kuwait, any funds or any other financial or economic
resources and shall prevent their nationals and any persons within
their territories from removing from their territories or otherwise
making available to that government or to any such undertaking any
such funds or resources and from remitting any other funds to
persons or bodies within Iraq or Kuwait, except payments
exclusively for strictly medical or humanitarian purposes and, in
humanitarian circumstances, foodstuffs”.
(2) The United Nations Act 1946 (the 1946 Act) provides by section 1(1):
“If, under article 41 [in Chapter VII] of the Charter of the United
Nations . . . (being the article which relates to measures not
involving the use of armed force) the Security Council of the United
Nations call upon His Majesty’s Government in the United Kingdom
to apply any measures to give effect to any decision of that Council,
His Majesty may by Order in Council make such provision as
appears to Him necessary or expedient for enabling those measures
Page 4
to be effectively applied, including (without prejudice to the
generality of the preceding words) provision for the apprehension,
trial and punishment of persons offending against the Order.”
(3) The Iraq (United Nations Sanctions) Order 2000, made on 13 December
2000 and coming into force on 14 December 2000 (“the 2000 Order”), recites:
“Whereas under article 41 of the Charter of the United Nations the
Security Council of the United Nations have, by a resolution adopted
on 6 August 1990, called upon Her Majesty’s Government in the
United Kingdom and all other states to apply certain measures to
give effect to a decision of that Council in relation to Iraq:
Now, therefore, Her Majesty, in exercise of the powers conferred on
Her by section 1 of the United Nations Act 1946, is pleased, by and
with the advice of Her Privy Council to order, and it is hereby
ordered, as follows.”
Articles 3 and 11 (the two articles referred to in count 2 and in the second certified
question) provide:
“3. Any person who, except under the authority of a licence granted
by the Treasury under article 5 –
(a) makes any funds available to the Government of the Republic of
Iraq or any person who is resident in the Republic of Iraq, or,
(b) otherwise remits or removes any funds from the United Kingdom
to a destination in the Republic of Iraq,
is guilty of an offence.
11. (1) Any person guilty of an offence under article 3 . . . shall be
liable –
(a) on conviction on indictment to imprisonment for a
term not exceeding seven years, or a fine, or both . . .
Page 5
(4) Where a body corporate is guilty of an offence under this Order,
and that offence is proved to have been committed with the consent
or connivance of, or to be attributable to any neglect on the part of,
any director, manager, secretary or other similar officer of the body
corporate or any person who was purporting to act in any such
capacity, he, as well as the body corporate, shall be guilty of that
offence and shall be liable to be proceeded against and punished
accordingly.”
5. Essentially the appellants’ argument comes to this. The 1946 Act was
enacted, and the government was thereby permitted to introduce by executive
order highly restrictive measures including new criminal offences and sanctions
without a parliamentary majority or even parliamentary scrutiny, specifically so as
to enable urgent (prompt, hasty, speedy and immediate were other words used by
the appellants in the course of argument) action to be taken to implement article 41
UN Resolutions. Urgency alone justifies such wide executive power and the
bypassing of the ordinary parliamentary processes and safeguards. The power,
therefore, must be construed as subject to there being a need for its immediate
exercise and limited, therefore, to its being exercised within a very short timescale. If not exercised “at or about the same time” as the Resolution being
implemented, runs the argument, the power is lost by the effluxion of time. The
appellants candidly acknowledge that they can find no example of any other power
once given expiring by the effluxion of time (absent, obviously, legislation
containing express sunset clauses). They submit, however, that, novel as their
argument may be, there is support for it to be found in a number of the speeches
made during the parliamentary debates leading to the passage of the 1946 Act and
some support too in the judgments of this court in A v HM Treasury [2010] 2 AC
534.
6. Principal amongst the passages from Hansard relied upon are these:
(i) “Subsection (4) provides that Orders in Council shall be laid
forthwith before Parliament, but it excludes the application of a
provision in the Rules Publication Act requiring the publication in
the ‘London Gazette’ of notice of the proposal to make the Order in
Council for 40 days before the Order is made, it being obvious that
the urgency with which decisions of the Security Council must be
carried out renders any such notice quite impracticable.” (Lord
Jowitt LC, introducing the Bill at its second reading in the House of
Lords: Hansard (HL Debates), 12 February 1946, col 376.
(ii) “[The Lord Chancellor] is fortunate in being able to bring
forward a Bill to enable this Government to do things by Order in
Page 6
Council which will, I believe, have the complete, unanimous, and
enthusiastic support of everybody in this House. If this organisation
fails, all fails. If it is to succeed, it must be able to take effective
action, and that action must be prompt and immediate. All the world
must know that when it takes a decision, all the member states will
be prompt and loyal in giving effect to such a decision. For the
reasons the noble and learned Lord Chancellor has given, this
method of Orders in Council is the only effective way by which we
can do that.” (Viscount Swinton, supporting the Bill at its second
reading: Hansard (HL Debates), 12 February 1946, col 377.
(iii) “Subsection (4) provides that Orders in Council shall be
forthwith laid before Parliament, but it excludes the application of a
provision in the Rules Publication Act requiring publication in the
‘London Gazette’ of notice of the proposal to make the Order in
Council for 40 days before the Order is made. It is evident that that
must be so, because, if we are to take action at all in pursuance of a
decision by the Security Council, it must be taken with the least
possible delay. Therefore, any such notice of 40 days would be really
out of the question.” (Mr Philip Noel-Baker, Minister of State,
introducing the Bill’s second reading before the House of Commons:
Hansard (HC Debates, 5 April 1946, col 1516.
(iv) “The procedure by way of Order in Council under this Bill when
it becomes an Act possesses the necessary combination of speed and
authority to enable instant effect to be given to these international
obligations to which we are pledged.” (Mr W S Morrison, supporting
the Bill’s second reading in the House of Commons. Hansard (HC
Debates, 5 April 1946, col 1517).
The terms of these debates, submit the appellants, demonstrate Parliament’s clear
intention that the powers granted under section 1(1) of the 1946 Act must be used
with haste after the passing of the relevant United Nations Resolution requiring
implementation. It was for that reason alone, they contend, that Parliament
consented to the summary procedure for which the Act provides. The power must
therefore be exercised speedily or not at all.
7. As for the recent decision of this court in A v HM Treasury [2010] 2 AC
534, the appellants fix in particular upon passages in the judgments which
recognise – as had earlier judgments in the House of Lords, most notably in R v
Secretary of State for the Home Department, Ex p Pierson [1998] AC 539 and R v
Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115 – that a
power conferred by Parliament in general terms is not to be taken to authorise the
Page 7
overriding of fundamental human rights or basic legal principles unless
unambiguously conferred with that intention. They rely, for example, upon Lord
Hope’s judgment at p 626, para 47: “I would approach the language of section 1 of
the 1946 Act, therefore, on the basis that Parliament did not surrender its
legislative powers to the executive any more than must necessarily follow from the
words used by it. The words ‘necessary’ and ‘expedient’ both call for the exercise
of judgment. But this does not mean that its exercise is unlimited.”
8. As, however, the appellants rightly recognise, A was concerned with a very
different aspect of the scope of the power under the 1946 Act than is under
consideration here. Whereas A was concerned with the proper limits of the content
of Orders that can be made under the Act, the present appeal seeks to impose limits
upon the time within which the power is properly exercisable. It is not suggested
that an Order precisely in the terms of the 2000 Order could not properly have
been made at around the time SCR 661 was adopted on 6 August 1990. What is
contended is rather that, by 13 December 2000, the 1946 Act had long since ceased
to be an available legislative route by which to implement the 1990 Resolution; the
appellants argue that the new offences created by the 2000 Order could at that
stage only have been introduced by ordinary parliamentary legislation. By the
same token that A demonstrates the Order-making power under the 1946 Act not to
be unrestricted as to content, so too, the appellants submit, this court should now
hold it not to be unrestricted as to the time of implementation either. And certainly,
if the urgency of the need to give effect to a United Nations Resolution were
indeed a precondition of the right to exercise the power, the strength of the
appellants’ case would be obvious: ten years elapsed before the 2000 Order gave
effect to (part of) the measures required by article 4 of SCR 661.
9. Is, then, the suggested analogy between the situation facing the court in A
and that arising here a true one? In our judgment it is not. The critical feature of
the Orders in Council under consideration in A was that they plainly overrode the
fundamental rights of those affected. Orders of that kind, the court held, were
impermissible: the 1946 Act had neither expressly nor by necessary implication
conferred so extreme a power.
10. The essential reason why the court in A was prepared, indeed anxious, to
examine the parliamentary material surrounding the passage of the 1946 Act was
to make sure that there had in fact been nothing said by those introducing the Bill
to suggest that the executive power being conferred was intended to permit
fundamental human rights to be overridden. In short, Hansard was being examined
to confirm the absence of a clear statement of such intention, the argument there
being that a power of the width contended for by the Minister needed to have been
conferred unambiguously.
Page 8
11. In the present case, by contrast, we can see no good reason to look behind
the enactment of the 1946 Act, and a real risk of breaching parliamentary privilege
if one does. As already stated, it is not suggested here that the 2000 Order
overrides anyone’s fundamental human rights or is otherwise ultra vires the ordermaking power conferred by the 1946 Act (save as to the delay in the Order being
made). Obviously it was envisaged that the order-making power would ordinarily
need to be exercised speedily. But that is a far cry from saying that it was
Parliament’s clear intention to confine it to urgent use. Had that been the intention,
one would have expected it to be clearly provided for in the Act. And inevitably, if
it had been, some identifiable limit of time would have been formulated: how
otherwise is the Minister, or the court in the event of legal challenge, to determine
what precisely is the legal limit of the power?
12. So far from anything of this kind being found in the legislation, it is entirely
silent on the question, there being no hint of any such restriction in the language of
the section. Indeed, it goes somewhat further even than this: section 1(3) of the
1946 Act provides: “Any Order in Council made under this section may be varied
or revoked by a subsequent Order in Council.” The appellants necessarily,
therefore, recognise that some variations may be made to existing Orders by
subsequent Orders made perhaps years later. They are thus constrained to argue
rather that this power of variation cannot be invoked to create serious criminal
offences. Once the initial urgency has passed, they must submit, such offences can
only be created through the normal legislative process. Again, however, had
Parliament intended to place such limitations upon this power of variation, one
would have expected it to say so rather than leave the position entirely uncertain.
13. We have considered the issue thus far purely as one of principle and on the
barest of facts, by reference simply to the long passage of time between the United
Nations Resolution requiring measures to be taken and the Order giving effect to
it. The Crown, indeed, have been anxious that we should do so, concerned no
doubt lest otherwise anyone wishing to contest the vires of an apparently delayed
1946 Act Order will be able to require an explanation as to how the delay came
about. As will now be apparent, moreover, even on this somewhat blinkered
approach, it is our clear conclusion that the appellants’ argument must fail.
14. We think it right, however, briefly to sketch in something of the broader
context in which the 2000 Order in fact came to be made, partly to show that the
case is not simply one of inexplicable tardiness on the part of a negligent
government (indeed, succession of governments), but in part also to demonstrate
that there may be perfectly good reason to act as the government did here – which,
of course, assuming that is so, makes it yet more unlikely that Parliament on
conferring the power had been intent upon tightly circumscribing the time within
which it could lawfully be exercised.
Page 9
15. As already indicated, SCR 661 was adopted on 6 August 1990, four days
after Iraq invaded Kuwait. In the meantime, on 4 August, the Treasury had already
given directions in exercise of powers conferred by section 2 of the Emergency
Laws (Re-enactments and Repeals) Act 1964 forbidding (save with Treasury
permission) the carrying out of orders by the Government of, or any resident in,
Iraq requiring any person “to make any payment or to part with any gold or
securities” or requiring “any change to be made in the persons to whose credit any
sum is to stand or to whose order any gold or securities are to be held”. To an
extent, therefore, these directions anticipated the requirements of SCR 661.
16. Shortly afterwards, namely two days after SCR 661 and in substantial
implementation of the measures required by it, the Government on 8 August made
the Iraq and Kuwait (United Nations Sanctions) Order 1990 (SI 1990/1651)
pursuant to the 1946 Act power, imposing restrictions (as the Explanatory Note put
it) “on the exportation of goods from Iraq and Kuwait and on supply of goods to
Iraq and Kuwait as well as certain related activities and dealings, including the
carriage of such goods in British ships or aircraft”. This Order thus gave effect to
the entirety of SCR 661 save just a part of article 4. It was then amended on 29
August to add a new article 4A so as to ban the payment of any bond given in
respect of a contract whose performance was prohibited under any other article:
article 4 of the Iraq and Kuwait (United Nations Sanctions) (Amendment) Order
1990 (SI 1990/1768).
17. There followed a succession of SCRs dealing with the Iraqi situation as it
continued to develop over the next ten years. Putting it very shortly, on 15 August
1991 SCR 706 (1991) authorised the setting up of an oil-for-food programme, a
programme, however, which was then rejected by Iraq on the grounds that it
interfered with their sovereignty. On 14 April 1995 SCR 986 (1995) again
authorised such a programme and this finally began to operate at the end of 1996.
Thereafter the programme was extended on a six-monthly basis by further
Resolutions, each of which re-affirmed the terms of SCR 661. With the passage of
time, however, the scale and complexity of the humanitarian programme grew, and
oil prices increased, to the point where there was ever greater scope for the
manipulation of the programme by the Iraqi government. By September 2000 there
were consistent reports of Iraq demanding a surcharge on all oil sales and on the
purchase of all humanitarian goods, to be paid directly or indirectly to the
Government of Iraq. In December 2000 the United Nations 661 Committee agreed
that the payment of all such surcharges was illegal and in breach of the UN
sanctions imposed on Iraq. On 5 December 2000 SCR 1330 (2000) was adopted
inter alia “allow[ing] the Council to take further action with regard to the
prohibitions referred to in Resolution 661 …”. It was in the context of this everchanging diplomatic and international landscape that on 13 December 2000 the
2000 Order came to be made.
Page 10
18. If this brief history establishes nothing else, it demonstrates surely that
Security Council Resolutions are not simply one-off measures requiring immediate
implementation by member states and then receding into history, and that
situations can develop in the course of their subsequent enforcement which call for
further measures to be taken, sometimes with considerable urgency, to meet
emerging problems. It would be not merely inappropriate as a matter of
construction but regrettable as a matter of fact were this court now to stultify the
power conferred under the 1946 Act by confining its exercise within an artificially
restricted time-frame.
19. For the sake of completeness we record that, since the above judgment was
written, the appellants have now been convicted on count 2, the sanctions count.
We have in the result lifted the anonymity order which was earlier imposed in
these proceedings.
