Law Report: Minister acted unfairly towards the Fayeds

R v Secretary of State for the Home Department, ex parte Fayed and another; Court of Appeal (Lord Woolf, Master of the Rolls, Lord Justice Kennedy, Lord Justice Phillips) 13 November 1996

The provision in section 44(2) of the British Nationality Act 1981, that the Home Secretary was not required to give reasons for refusing an application for British citizenship, did not relieve him of the obligation to be fair. Fairness dictated that, while he need not give reasons for his decision, he ought in some circumstances to inform the applicant beforehand of any matters weighing against the grant of naturalisation, so the applicant could address him on those matters.

The Court of Appeal by a majority (Lord Justice Kennedy dissenting) allowed an appeal by Mohammed and Ali al-Fayed, reversed the decision of Mr Justice Judge, and quashed the Home Secretary's refusal to grant them British citizenship. The Home Secretary must now reconsider their applications.

The 1981 Act provided by section 6 that the Home Secretary "may, if he thinks fit," grant an applicant who "fulfils the requirements of Schedule 1" for a certificate of naturalisation. Among the requirements in Schedule 1 was "that he is of good character". By section 44(2):

The Secretary of State . . . shall not be required to assign any reason for the grant or refusal of any application under this Act the decision on which is at his discretion; and [his] decision . . . shall not be subject to appeal to, or review in, any court.

Both Fayed brothers were born in Egypt but had lived in the UK since the 1960s and had been granted indefinite leave to remain. Mohammed was married to a Finnish citizen but his children were British citizens; Ali's wife and children were all British citizens. Both brothers had substantial business interests in the UK and were resident for tax purposes.

In February 1993 Ali applied for naturalisation as a British citizen under the 1981 Act. Mohammed applied in February 1994. After long delays, during which the Home Secretary stated publicly that the applications were regarded as "especially difficult or sensitive", the applications were both refused in February 1995. No reasons were given and their request for reasons was refused.

Michael Beloff QC and Rabinder Singh (D.J. Freeman & Co) for Mohammed al-Fayed; M. Beloff QC and Mark Shaw (Palmer Cowen) for Ali al-Fayed; Stephen Richards and Stuart Catchpole (Treasury Solicitor) for the respondent.

Lord Woolf MR said neither of the applicants had ever been told what aspects of their applications had given rise to difficulties or reservations. Without information as to this it would be impossible for them to volunteer information to support their applications.

The refusal of their applications was damaging to their reputations, and deprived them of the substantial benefits of citizenship. The minister's decisions were therefore classically ones which, but for section 44(2), would involve an obligation on him to give the applicants an opportunity to be heard before the decision was reached.

The fact that the minister might refuse an application because he was not satisfied that the applicant fulfilled the rather nebulous requirement of good character or "if he thinks fit" underlined the need for an obligation of fairness.

The provision in section 44(2) that his decision was not subject to appeal or review did not relieve the minister of his obligation to be fair, nor deprive the court of its power to ensure the needs of fairness were met.

His Lordship rejected the submission that the prohibition in section 44(2) on the minister being required to give reasons impliedly excluded any requirement to give the applicants the notice which fairness dictated they needed to make an application.

Justice must not only be done but must be seen to be done and it had not been seen to be done in relation to the Fayeds' application. The minister's decisions must be quashed so they could be retaken in a manner which was fair.

Paul Magrath, Barrister