It has been the policy of successive British Governments over many years not to pay compensation to former British service personnel for the fact of having been made prisoners of war in any conflict. But, perhaps stimulated by the fact that the Canadian Government made payments to its former far east prisoners of war, the Government looked once again at the particular position of those who had suffered the appalling hardships resulting from being captured by the Japanese. Almost one in four of those who were captured died or were killed in captivity. On the 10^th April 2000, the Prime Minister and Dr Lewis Moonie, the Under Secretary of State for Defence, met a delegation from the Royal British Legion at Downing Street. The suggestion was that there should be a one-off ex gratia payment for far east prisoners of war. The estimate was that the number of ex-servicemen and their widows who would be eligible for such a payment was in the region of 10,000 consisting of 7,000 former prisoners of war and 3,000 widows. As a result, in the summer of 2000, the policy was reconsidered in relation to far east prisoners of war; and discussions took place between the Ministry of Defence, the Foreign and Commonwealth Office, the Department of Health, and the Department of Social Security. A working group under the chairmanship of Mr Tom McKane was set up, and produced a scheme, to be administered by the War Pensions Agency. This was announced by the minister in a statement to the House of Commons on the 7^th November 2000 in the following terms:

He concluded the statement by stating that further details of the scheme were being published in a leaflet a copy of which would be placed in the Library of the House.

This leaflet stated:

Surviving former members of HM Armed Forces who were held as Japanese Prisoners of War in the Far East during the Second World War;

Surviving former service personnel who received payments after the Treaty of Peace with the Japan in 1951. These were certain members of the then Colonial Forces, Indian Army and Burmese Armed Forces;

Surviving members of the Merchant Navy who were imprisoned by the Japanese in the Far East during the Second World War. For the purposes of this scheme, a member of the Merchant Navy is a person who has been employed, or engaged as, or for service as, a mariner in a British ship;

Surviving British civilians who were interned by the Japanese in the Far East during the Second World War; and

The surviving widow or widower of a person who would otherwise have been entitled under Category a), b), c), or d) above provided they were married at the time of death.”

Unhappily, this scheme, benevolent in its intent, has been bedevilled by problems in execution. In particular, the eligibility criteria for civilians was not spelt out in either the statement, the leaflet, or any other contemporaneous document. It became apparent that the Government intended there to be a close link by way of birth to the United Kingdom, the details of which do not matter for the purposes of this appeal. But these criteria produced two pieces of litigation which reached this court. An application for judicial review failed and the appeal was dismissed in R (Association of British Civilian Internees: Far East Region) –v- SS for Defence [2003] QB 1397. Subsequently, a British civilian internee who had been born in Hong Kong but who did not have that link successfully applied for judicial review of the criteria to Elias J on the grounds that they were indirectly discriminatory on racial grounds. She also obtained £3,000 damages from HHJ Harris in a claim for racial discrimination brought in the county court. This court dismissed appeals against both decisions in a combined judgment: R (Elias) –v- Defence Secretary [2006] 1 WLR 3213.

As I have said, we are not concerned in the present case with those criteria. The appellant is a citizen of Pakistan who served in the Indian Army during the Second World War, was captured and became a prisoner of war of the Japanese. It is accepted on his behalf that he does not meet any of the criteria set out in the statement or the leaflet. But he submits that the criteria are racially discriminatory by reason of the inclusion in category (b) of those who received payments after the Treaty of Peace with Japan in 1951. As was expressly stated in the ministerial statement and the leaflet, these were only a small proportion of those who served in particular in the Indian Army; and, it is said, the basic criterion for their receipt of payment was that they were “European”, a description to which I will return. He claims that, as a result, he is the victim of direct discrimination which renders the scheme, as promulgated, unlawful at common law, in that it is infected by unlawful discrimination, and by virtue of the provisions of the Race Relations Act 1976.

In R (Gurung) –v- Ministry of Defence [2002] EWHC 2463 (Admin), McCombe J held that the criterion was discriminatory, and therefore unlawful, in the sense contended for by the appellant in this case, in relation to Gurkhas who were not citizens of India or Pakistan. This decision was not appealed by the Secretary of State. Instead, a further statement was made to the House of Commons on the 5^th November 2003 in the following terms:

Strictly, the appellant’s challenge is to the scheme as amended in that statement. The context of this case is accordingly different from the context in Gurung. But both parties rely on the reasoning of McCombe J to which I will return, for their own purposes. The context of the present case is startling. The material before us establishes that the maximum number of former members of the Indian and Burmese Armies who were entitled to receive monies under the Treaty was 861, although contemporaneous documents identify only 618 as having received relevant payments. Of those 618, there are detailed records of 429, all of whom recorded their nationality as British. By the 2^nd May 2006, when Mr Jonathan Iremonger made his first witness statement in these proceedings on behalf of the respondent, 50,000 expressions of interest had been received from individuals resident in the Indian sub-continent.

Langstaff J dismissed the application. He set out his conclusions as follows:

I do not accept either. Though not without its difficulty of interpretation, the evidence shows that the ground for exclusion was one of nationality. The discrimination that this would otherwise have constituted, following the adoption in 2000 of criteria by reference to whether claimants for benefits had received a distribution under Article 16, and thus adopting the approach then, and which in any event is explicit in the current policy, was and is not unlawful because it is required by the arrangements made, which despite the deficiencies in their promulgation are sufficiently clear. The defence in section 41(2)(d) is thus available to the defendant, and renders the discrimination not unlawful.”

On behalf of the appellant, Mr Rabinder Singh, QC submits that the judge came to the wrong conclusion as to the grounds upon which a distinction was made between the appellant and those who received payments under the treaty. He submits that the contemporaneous documents make it abundantly plain that the underlying justification for the receipt of monies under the treaty was that the member of the Indian or Burmese Army had to be European, and that accordingly, there was clear direct discrimination on racial grounds. In coming to the conclusion that the distinction was based on nationality and not race, the judge was either simply wrong, or had applied the wrong burden of proof. In his submission, the burden of proof was, and is, on the respondent, in accordance with Article 8 of Council Directive, 2000/43 to prove that there had been no breach of “the principle of equal treatment”. He further submitted that the judge applied the wrong test when determining upon what grounds the distinction was made between those who received monies under the Treaty and those who did not. Then, finally, he submits that even if the judge was correct in deciding that the distinction was on the grounds of nationality, the judge was wrong to conclude that the ministerial statements to which I have referred amounted to arrangements approved by a minister of the Crown for the purposes of section 41(2) of the Race Relations Act 1976 (the Act).

It was common ground before the judge, and is common ground before us, that, subject to the argument on burden of proof, the appellant will succeed if the criteria give rise to a distinction between those who will obtain the ex-gratia payment and those who will not, which is made on racial grounds. This is so at common law, and by virtue of section 19B of the Act which makes it unlawful for a public authority to do any act which constitutes discrimination, unless it falls with section 41(2) of the Act. The relevant provisions of the Act are as follows:

on racial grounds he treats that other less favourably than he treats other persons;

In this Act, unless the context otherwise requires “racial grounds” means any of the following grounds, namely colour, race, nationality or ethnic or national origins;

.......

Nothing in Parts II to IV shall render unlawful any act whereby a person discriminates against another on the basis of that other’s nationality or place of ordinary residence or the length of time for which he has been present or resident in or outside the United Kingdom or an area within the United Kingdom if that act is done –

The judge recorded in his judgment that there was no controversy before him as to the law to be applied. He cited passages from the speeches of Lord Nicholls in Nagarajan –v- London Regional Transport [2000] 1 AC 501 at pp510 and 512, and Chief Constable of West Yorkshire Police –v- Khan [2001] 1WLR 1947 at para 29. He also cited passages from the speech of Baroness Hale in R (European Roma Rights Centre and others) –v- the Immigration Officer at Prague Airport and another [2005] 2 AC1 at paras 73, 74 and 82. Before us, however, Mr Rabinder Singh has submitted that these passages do not contain a complete or necessarily appropriate statement of the way in which the courts should approach the question of direct discrimination, particularly when discrimination may be unconscious discrimination, and the question of the relevance of the purpose or intent of the decision maker is in issue. That is so in the present case, as both parties accept, because the avowed intent of the scheme was clearly to provide ex gratia payments to “British groups”, which is the phrase used in both the ministerial statement on the 7^th November 2000 and the leaflet. I will return to the test applied by the judge later in this judgment.

The judge, in paragraph 25 of his judgment, having set out the relevant parts of the Act, and the citations from authority to which I have referred, said this:

If, however, the evidence properly understood is to the effect that entitlement to payment under the auspices of the U.K. government under Article 16 was denied to someone in the position of the claimant not because of his race, but because of his nationality, the exclusion would not inevitably be irrational. The effect of the scheme of 2000, as extended in 2003, would be to draw a distinction, based on nationality, in respect of those who served in British forces during World War II between those who by the time effect was given to Article 16 of the 1951 treaty, were nationals of independent states whose governments were in a position to enter into their own arrangements with Japan, and others. If such was the position, it is difficult to see on what ground this could be said to be irrational (unless nationality as a sole criterion offends against the Race Relations Act: which it will, in light of the wording of section 3(1) unless section 41(2)(d) applies).”

Despite the criticisms to which I have referred, I do not think that Mr Rabinder Singh quarrels with the way in which the judge there describes the issue or issues that he had to determine, in particular the critical issue which he sets out in the first sentence in paragraph 25. His submissions is essentially based upon the fact that the issue so described essentially begs the question as to whether the distinction was on grounds of race or nationality, and fails to acknowledge what he submits is the proper burden of proof. In order to evaluate those submissions, I propose firstly to set out the material available to the judge and us before returning to those legal submissions in order to evaluate them in the light of the authorities.

The Treaty of Peace with which we are concerned is the San Francisco Treaty of the 8^th September 1951 between Japan on the one hand and Australia, Canada, Ceylon, France, Indonesia, the Kingdom of the Netherlands, New Zealand, Pakistan, the Republic of the Philippines, the United Kingdom of Great Britain and Northern Ireland, and the United States of America, on the other (the “Allied Powers”). The Treaty dealt, amongst other things, with claims for reparations for damage and suffering caused by Japan during the war. These are provided for in particular in Articles 14 and 16 of the Treaty. India entered into a separate Treaty of Peace with Japan on the 9^th June 1952. By Article VI of that Treaty, India waived all reparations claims against Japan and, subject to immaterial exceptions, all claims of India and Indian nationals arising out of action taken by Japan in the course of the prosecution of the war. The reasons for this go back to the complex relationship between Indian nationalists and Japan during World War II.

Article 14 of the San Francisco Treaty dealt with the way in which Japanese property within the jurisdiction of the Allied Powers should be disposed of. Article 16, the Article with which we are concerned, provided as follows:

Prima facie, the Treaty would appear to have envisaged that the assets would be distributed by the International Committee of the Red Cross on the basis of nationality, with each of the Allied Powers being responsible for their own nationals. The Pakistan Government would accordingly have been responsible for making claims on behalf of, or for receiving payment on behalf of, nationals of Pakistan who qualified. India was not one of the Allied Powers, and accordingly did not qualify under this Treaty. And by reason of the terms, to which I have referred, of its Treaty of Peace with Japan, it waived any rights it might otherwise have had for compensation on behalf of its nationals.

But there were complications. These arose out of the fact that before Partition and Independence in 1947, the Indian Army was a two tier army divided on essentially racial grounds. On the one hand there were those who were “natives of India” and subject to Indian Military Law, and on the other those who were not, who were subject to British Military Law. The latter, generally speaking, did not become citizens of either India or Pakistan after 1947, whereas the former did. There is an element of circularity in the definition of the phrase “native of India” in the relevant Act, namely the Army Act 1881 as re-enacted and amended, as the definition section, section 109(22) of that Act identifies “a native of India” as a person triable and punishable under Indian Military Law as defined by the Act. But in practical terms, as recognised by McCombe J in Gurung whose judgment in this respect was adopted by Langstaff J in the present case, Indian military law did not apply to any British born subject, or “to any legitimate Christian lineal descendant of the same, whether in the paternal or maternal line”: see the footnote in Vol XXV of Halsbury’s Law of England (1913), cited in paragraph 25 of the judgment of McCombe J.

This distinction, and its essentially racial origin, was underlined by the evidence of a leading academic in this area, David Omissi, relied upon by the claimants in both this case and the Gurung case. He drew attention to notes to section 180(2) of the Army Act which expressly stated:

This background is undoubtedly of great importance in understanding the way in which the British Government approached the task of determining for whom it should be responsible for obtaining payment under Article 16 of the Treaty. And it is also critical for understanding how it was that McCombe J came to decide Gurung as he did.

In order to understand the basis upon which payments were made under Article 16, Langstaff J considered the surviving contemporaneous documentation which led up to the ultimate distribution of the money. In order to evaluate his approach to that material, I must do the same.

The first document we have in which the potential problems with which we are concerned were discussed, is the minutes of a meeting held on the 24^th September 1952 at the Ministry of Pensions between the relevant civil servants and representatives of the Far Eastern Prisoners of War Association. Mr Gordon of the Commonwealth Relations Office identified the problem of determining who should benefit in the Indian Army. Ultimately it was agreed for the purposes of the meeting that “United Kingdom Officers of the Indian Army and Royal Indian Navy should come within the scheme.” And it would appear as though that was the basis upon which matters progressed.

In a letter of the 2^nd April 1953 from the Commonwealth Relations Office to the Foreign Office, Mr Anderson said as follows:

You were, I think, apprehensive lest the inclusion of these men under the United Kingdom umbrella would induce the Government of India (in spite of the fact that India is not an “Allied Power” for purposes of the Peace Treaty) to claim that all Indian ex-POWs should also be included.....

As regards India there are, I agree, more grounds for anxiety. As you know the Indian Army was a Corps of the United Kingdom Forces under the Army Act” (he would appear to have been in error there) “and therefore all members of it, whether Indian or European could, on that criterion alone, be regarded as included in the words “those members of the Armed Forces of the United Kingdom who suffered.... whilst POWs”. In the context of the Japanese Peace Treaty, however, the major criterion is whether a country is an allied power. Since India is not an Allied Power it seems unlikely that she would ask us to stake a claim under Article 16 of the Peace Treaty (since she could not in any case stake a claim herself) for those elements of the old Indian Army i.e. the Indian elements, whose interests she could be most expected to champion, nor object to the inclusion under the United Kingdom umbrella of European elements of the old Indian Army who were distinguished from their Indian colleagues by their close connection with the British Services.....

Without at this stage going in detail into of all these arguments, and without having consulted our own Services Department which deals with all the questions concerning the Indian Civil and Defence Services, I feel there is force in the following points:

The fact that the European Officers of the Indian Army were included in the United Kingdom distribution under article 14 of the Japanese Peace Treaty should be conclusive so far as U.K. departments are concerned.

These officers were recruited through the same door as British Army Officer, they were commissioned in the British Army in the first instance and later transferred to the Indian Army and held King’s Commissions in HM Land Forces.

The United Kingdom Government through the Secretary of State for India decided their conditions of service while in the Indian Army.

The United Kingdom Government bears the cost of applying to them any improvement in benefits since 1947 to disabled officers of the British Services.

The United Kingdom meets the cost of applying to them the benefits of the 1952 Pensions Increase Act.

The United Kingdom Government accepts, at any rate a moral responsibility for their pensions if India or Pakistan should default.

On promotion to the rank of Colonel, these officers ceased to belong to the Indian Army and came on to a common list with British Army officers, (this did not generally apply to Indians, but there were a few exceptions.)

On the 16^th April 1953, Mr Emery of the Foreign Office wrote to Mr Anderson raising the concerns as to what the reaction of the Indian authorities would be if the United Kingdom were to include “the 700 European Officers, ex members of the Indian Army, in their list of ex-prisoners entitled to a share of Japanese assets under Article 16 of the Japanese Peace Treaty, and to exclude Indians who were prisoners of the Japanese”.

The next letter that we have is a letter from Mr Bishop of the Commonwealth Relations Office to Mr Pilcher of the Foreign Office of the 24^th April 1953 dealing with the same subject. The High Commissioner in New Delhi had been asked what the reaction of the Indian Government would be, and in his reply stated that it was unlikely that the Government of India would make any claim. The Commonwealth Relations Office was strongly of the view that the “European Officers” should be included essentially on the grounds that they had been recruited, trained and gazetted to the British Army in the same way as officers who had remained with the British Army throughout their whole careers.

By letter dated the 15^th May 1953, Mr Stobart of the Foreign Office indicated that the Foreign Office took the view that it would be extremely difficult to exclude from benefit the European Officers of the Indian Army, that they should be included in the totals of British prisoners formerly in Japanese hands and that the UK should defend their inclusion to the International Committee of the Red Cross if any questions were raised, on the basis that the Indian nationals had no standing to claim under the treaty by reason of the separate treaty entered into by their government.

Mr Anderson set out the view of the Commonwealth Relations Office in a letter dated the 8^th August 1953 in the following terms:

The question of Pakistan was raised in a letter from Mr Gordon of the Commonwealth Relations Office to Mr Sigsworth at the Foreign Office in a letter of the 13^th August 1953. In that letter Mr Gordon expressed the view that any payments to Pakistan nationals who were members of the Indian Army was a matter for the Pakistan Government, which was entitled to make a claim under Article 16 as an Allied Power. It would appear from a letter of the 1^st July 1953 from the Pakistan High Commission that Pakistan had taken the same view. And it is clear that the Pakistan Government advertised in Pakistan for those who had been prisoners of war to identify themselves for the purposes of any claim the Pakistan Government could make on their behalf.

Mr Morris of the Foreign Office replied to Mr Anderson’s letter of the 8^th August on the 14^th August 1953 in the following terms:

From subsequent correspondence it would appear that the United Kingdom Government took responsibility for collating lists of Commonwealth citizens, as well as citizens of the United Kingdom and Colonies, who had been members of any of the Colonial Forces. This process culminated in an important meeting held at the Foreign Office on the 23^rd June 1954 between the various Government departments involved, and representatives from the Canadian, Australian and New Zealand High Commissions. The notes of the meeting include the following:

It was noted that the Army list sent to the I.C.R.C. did not include the names of officers and other ranks of the Indian Army but only officers and other ranks seconded to the Indian Army. It had been agreed with the I.C.R.C. that all British nationals serving with the Indian Forces should be included in our lists and it was accordingly agreed that the CRO (Commonwealth Relations Office) should prepare a list of British personnel of the Indian Army as soon as possible and after checking, where necessary with Commonwealth Representatives in London and Service Ministries should forward it to the Foreign Office for dispatch to the I.C.R.C.

It would appear as though this latter list was ultimately sent to the Foreign Office under cover of a letter dated 29^th September 1954. Thereafter the question arose as to the treatment of Gurkha prisoners of war which was the subject matter of the decision of McCombe J in Gurung. The first express mention would appear to have been in a letter of the 1^st January 1955 from Mr Anderson to Mr Cortazzi of the Foreign Office. This letter included the following:

On the legal aspect, neither the Gurkhas country of domicile (Nepal) nor the country in whose armed forces they were serving at the time of capture (India) was a signatory of the Japanese Peace Treaty and this criterion would appear to render them prima facie ineligible. It was indeed for this reason alone that the non-European members of the former Indian Army who are now Nationals of the Republic of India were ruled out as ineligible for benefits. Indeed their ineligibility by virtue of this criterion was felt to be so obvious that we did not think it necessary to consult with the Government of India officially on the matter.

In reply Mr Higgins of the Foreign Office said in a letter of the 13^th January 1955:

It would appear that the list collated by the Commonwealth Relations Office in accordance with the notes of the meeting of the 23 June 1954 was agreed by the International Committee of the Red Cross in May 1956, and included 618 names relating to the Indian Army and the Burma Army. This is the list with which we are concerned, in that it is on the basis of this list that the ex gratia payments under the scheme have been made under the 2000 Scheme.

Although McCombe J did not have all the material to which I have referred, he had the relevant parts. He concluded that in so far as the list was based upon the distinction between those who were subject to the Indian Military Code, and those subject to the British Military Code, the distinction was for practical purposes, racial in nature. He based that upon the background to which I have already referred in paragraph 16 to 18 above. It was in the light of that conclusion that he determined that in relation to the Gurkhas, to exclude them was irrational.

His reason was contained in the following paragraphs of his judgment:

It was understandable in 1951 and hence in 2000, that the UK Government saw no need to provide for citizens of those States which, in their own right, had concluded Treaty arrangement with Japan. That included three out of the four Dominions and Pakistan who were parties to the 1951 Treaty, and India, which had concluded a separate Treaty. India was not a signatory to the 1951 Treaty with Japan and

It was in the light of that judgment that the scheme was amended in the form announced on the 5^th November 2003 by Mr Ivor Caplin. The reasons for the decision to amend the scheme in that form are set out in paragraphs 30ff in the second witness statement of Mr Jonathan Iremonger made for the purposes of these proceedings on the 16^th May 2006. The new policy was described in paragraph 31 in the following terms: “the new policy was to pay all members of the Indian Army save those who, in 1951, were nationals of states which had concluded their own treaty arrangements with Japan.”

Having related essentially the same material as I have set out above, the judge said at paragraph 58:

The judge then went on to express some concern, however, particularly as a result of the contents of the letter of the 1^st January 1955 from Mr Anderson to Mr Cortazzi, to which I have already referred. He considered that that raised at least a question as to whether or not, despite the fact that nationality would appear to have been the ultimate basis upon which the list was being compiled, nevertheless the relevant decisions may have been infected by the underlying racial distinction between those who were “natives” and those who were “European”. He acknowledged that much of the correspondence was couched in terms which would appear to have had racial connotations, and posed the question in the following terms:

His conclusion was set out in paragraph 62:

He accordingly concurred with McCombe J as to the treatment of the Pakistani and Indian Nationals. In those circumstances, he concluded that there was nothing irrational about the criterion for inclusion in the scheme, that the scheme was not based upon impermissible racial distinctions, but was based upon nationality which was a perfectly rational justification for the distinctions that was being made, as had been recognised by McCombe J.

He then turned to the question of whether or not even if rational, the policy was nonetheless unlawful as being in breach of the Race Relations Act by reason of the fact that the distinction was indeed based on nationality. The question which had to be answered in that context was whether or not the policy was saved by virtue of section 41(2)(d) of the Act. He referred to Hampson –v- Department of Education and Science [1991] 1AC 171 and in particular the speech of Lord Lowry at page 181 who said that a discriminatory act is only saved by this subsection if it is mandated by the statutory provision, or arrangements (as in this case) in question. The judge concluded that the statement in 2003, taken with the earlier statement, was sufficiently clear to meet that test. As far as the claimant is concerned, he does not fall within the category of those identified in the original statement, nor does he fall within the extended category identified sufficiently, if not with the clarity the judge would have preferred, in the second statement.

I have already referred in general terms to the submissions of Mr Rabinder Singh. The first broad point that he makes is that the judge applied the test set out in the speech of Lord Nicholls in Nagarajan as elucidated in his speech in Khan. From Nagarajan the judge cited the passage starting at page 510H:

The relevant passage in his speech in Khan specifically referred to by the judge is at paragraph 29:

It is said that by selecting these citations, the judge failed to direct himself fully and properly as to the right approach to the statutory question. He failed to reflect adequately the reasoning of Lord Goff in R –v- Birmingham City Council ex parte Equal Opportunities Commission [1989] AC 1155 at pp 1193 to 1194 where he said that the intention or motive of the defendant is not a necessary condition of liability. This was said by Lord Bridge in James –v- Eastleigh Borough Council [1990] AC 751 at page 765 to impose an objective test; in other words, the motive or intention of the decision maker is irrelevant in determining why the alleged act of discrimination occurred. It follows, it is submitted, that the judge should simply have looked at the basis upon which the list was drawn up, namely by using the distinction between “native” and “European” members of the Indian Army, in order to determine whether or not the distinction was made on the grounds of race. It is submitted that there could only be one answer to the question posed in that way; and that answer was clearly given by McCombe J in Gurung.

He further submits in relation to the question as to the grounds upon which the distinction was made, that the judge failed to apply the correct burden of proof. As I have said, he submits that in this context Article 8 of Council Directive 2000/43 (the Race Directive) applies. Paragraph 1 provides:

In the light of the fact that the judge expressed himself in the way that he did in paragraph 62, namely indicating that it was not without hesitation that he came to the conclusion that he did, he cannot, it is said, have taken the burden of proof required by this Article properly into account.

In any event, it is submitted, even if nationality was the ground upon which the distinction was drawn between those who would receive the payment and those who would not, the requirements set out by the House of Lords in Hampson had not been met. In this context, Mr Rabinder Singh submits that even if the scheme as originally announced was sufficiently clear in relation to the claimant to make it plain that the scheme mandated his exclusion, it was not sufficiently clear in the amended scheme. He submits that the scheme lacks sufficient formality to justify the conclusion that it was an “arrangement” within the meaning of section 41(2)(d). The exclusion of arrangements from the protection otherwise provided against discrimination by the Act must involve something more formal than a statement by a Minister. When that statement is incomplete, in that it refers to the “principles” in a judgment, that cannot meet the inherent requirement that Parliament and those affected by the measure in question should be able to understand its precise consequences and ambit.

Mr Rabinder Singh's first point is, in my view, misconceived. The judge did not misunderstand the authorities. In the first sentence of paragraph 25 of his judgment, he set out the correct question. The citations from Lord Goff in the Birmingham City Council case, and Lord Bridge in James have to be read in the light of the speeches of Lord Nicholls in Nagarajan, and Khan. As Lord Nicholls explained in Nagarajan at page 511H Lord Goff and Lord Bridge were not dealing with the nature of the statutory question, namely the grounds upon which the distinction was made, and the relevance of intent to that question, but to the underlying motive for making the distinction. Lord Steyn said the same at page 520G. And Lord Hutton and Lord Hobhouse agreed with both Lord Nicholls and Lord Steyn. This makes it abundantly plain, in my view, that the alleged discriminator’s intent is capable of being a relevant factor in answering the statutory question. Lord Browne-Wilkinson at page 508E said:

It is, however, right to say that Lord Browne-Wilkinson went significantly further than both Lord Nicholls and Lord Steyn. And indeed, at page 509 D indicated that he himself would have considered the reason of the discriminator to be relevant. I have some sympathy with his approach, in that the distinction between intention and reason or motive is a somewhat subtle one. However, it is clear from the speeches of Lord Nicholls and Lord Steyn that the judge did not misdirect himself as to the question which he had to answer.

As far as the burden of proof point is concerned, I do not consider that this is an issue which arises out of the judge’s reasoning. He did not decide the question by reference to the burden of proof. The fact that he expressed some hesitation about his final conclusion is perhaps not surprising against the background that I have described. But his conclusion was clear. He was satisfied that the reason for the alleged discrimination was nationality. He must, necessarily, be taken in those circumstances to have found on the balance of probabilities that the discrimination was not on the grounds of race. Interesting though the arguments before us were about the effect of Article 8 of the Directive in circumstances such as these, they do not arise for determination in this case.

The real question, in my view, is whether the judge, although directing himself correctly as to the question he had to answer, came to the wrong conclusion. There is no doubt, as the judge recognised, that the criterion which was used initially in 1953 to define those in the Indian Army who would be entitled to receive monies from the International Committee of the Red Cross was based on a distinction which was racial in origin. But it was used for the purpose of determining entitlement to payments which the Treaty appears to have envisaged would be based upon nationality. That seems to me to be the necessary inference from the proposed mechanism for distribution of funds under Article 16 “to appropriate national agencies”. When the lists were ultimately compiled for forwarding to the International Committee of the Red Cross, the material that we have indicates that the list was intended to reflect those former members of the Indian Army who were British. The preceding correspondence clearly expressed the view taken at that time that Indian nationals who had been members of the Indian Army could not expect to be included because India was not one of the Allied Powers and concluded its own separate Treaty, and that Pakistan, which was an Allied Power, was responsible for making any claims on behalf of its own nationals. The correspondence in relation to the Gurkhas is undoubtedly redolent of attitudes which have racial undertones. But I do not think that that vitiates in any way the conclusion that the lists were drawn up on grounds of nationality. The vice, as McCombe J recognised, was to exclude the Gurkhas by equating them with Indian nationals when the reason for excluding Indian nationals did not apply to the Gurkhas.

It is in the light of that background that the relevant question has to be asked, namely what was the ground upon which the distinction was made in the scheme, as amended in 2003. On its face, the scheme is based upon the premise that those who were to obtain the ex-gratia payments should be British. The preamble to both the statement and the leaflet in 2000 clearly state that the payments are to be made to the “British groups”. In other words, the criteria were intended to make a distinction on the basis of nationality. Whilst nice questions might have arisen as to the difference between intent and motive had the distribution of monies in 1954 being clearly based upon race, rather than nationality, it seems to me that the judge was right to conclude that the distinction made in the present case was “on the grounds of” nationality and not race. This accords with the reasoning of McCombe J in Gurung when he considered the position of Pakistan and Indian nationals. McCombe J’s decision as to irrationality was based solely upon the way in which the Gurkhas had been dealt with; and their position has been remedied in the scheme with which we are concerned.

The final question, therefore, is whether the scheme, as so amended, amounts to “arrangements” made “by or with the approval of, or for the time being approved by, a Minister of the Crown” within the meaning of s.41(2)(d) of the Act. The judge considered that an arrangement for the purposes of the statute was “a formal organisation of practical measures for others to adopt”. He considered that both the scheme in its original form and the 2003 amendment to the scheme could therefore be properly described as “arrangements” for the purposes of the statute. As they were both announced by Ministers of the Crown, they could properly be described as having been arrangements made by, or at the very least with the approval of, a Minister of the Crown. I agree.

Mr Rabinder Singh, however, argues, as I have said, that even if these requirements of section 41 had been met, it could not properly be said that the 2003 scheme “mandates” the particular distinction made in the case of his client. The scheme is said to have been extended in accordance with the “principles” of the judgment of McCombe J, without defining, beyond the express inclusion of the Gurkhas, the ambit of those principles, and therefore the ambit of the scheme. The judge, however, concluded that the principles were sufficiently clear, certainly in relation to Pakistani nationals, who were expressly identified in the judgment as being persons properly excluded from the ambit of the scheme. I entirely agree with the judge, for the reasons that he gave.

I would accordingly dismiss this appeal.

I agree.

I also agree.