Background
Graham Phillips owned and ordinarily resided at a property in Islington. After the Foreign Secretary designated him under the Russia sanctions regime in July 2022, his assets were frozen and he said that he could no longer earn income or pay his council tax. His earlier challenge to the designation had failed. Although Phillips later obtained an Office of Financial Sanctions Implementation licence covering basic needs, he maintained that he remained destitute and unable to raise funds.
Islington obtained a council-tax liability order and, by August 2025, Phillips owed more than £7,000. The council rejected his claim that the property was exempt because he was detained elsewhere by court order, and it declined to continue staying enforcement beyond October 2025. Phillips sought judicial review, alleging that refusing to waive or reduce the liability or stay enforcement disproportionately interfered with his property rights under Article 1 of Protocol No. 1 and was irrational under public-law principles. After permission was refused on the papers, he renewed his application at an oral hearing.
The Court’s Holding
Nigel Cooper KC, sitting as a Deputy High Court Judge, refused permission because neither ground had a realistic prospect of success. Phillips could not qualify for the claimed statutory exemption because he was not detained in prison pursuant to an order of a United Kingdom court. Islington had a broad discretion under section 13A(1)(c) of the Local Government Finance Act 1992, had considered Phillips’s circumstances, and had already allowed a substantial period without enforcement. Its refusal to reduce the liability or extend the stay was not arguably irrational or Wednesbury unreasonable.
The court also held that the property-rights claim was not realistically arguable. Collecting council tax to fund local public services was a legitimate aim; maintaining Phillips’s liability and ending the enforcement stay were rationally connected to that aim; and no less intrusive means of obtaining payment had been identified. The balance was not arguably unfair given the council’s published reduction policy, the time already allowed, Phillips’s failure to seek welfare support from the council, and the ability under his OFSI licence to pay council tax or seek a variation. The claim was, in substance, an impermissible collateral attack on a sanctions designation already upheld as lawful and proportionate.
The court confirmed the earlier £2,925 costs order but made no further costs order. It declined to grant the broad anonymity and sealing relief sought, instead directing limited protections involving notice of non-party document-access applications and the availability of redacted statements of case unless otherwise ordered.
Key Takeaways
- A sanctions-related inability to access or raise funds does not itself require a billing authority to waive council tax or suspend enforcement.
- The statutory exemption for a dwelling left vacant because its resident is detained did not apply because Phillips was not imprisoned under an order of a United Kingdom court.
- A human-rights challenge to ordinary tax enforcement cannot be used as a collateral means of reopening the lawfulness or proportionality of an asset freeze already upheld by the courts.
Why It Matters
The decision illustrates the high threshold for obtaining permission to challenge a local authority’s exercise of its broad discretionary council-tax reduction power. Even exceptional personal circumstances will not establish an arguable public-law error where the authority considered those circumstances, followed a lawful policy, and pursued the legitimate objective of funding public services.
For sanctioned individuals, the ruling also distinguishes the consequences of an asset freeze from the independent enforcement of ordinary tax liabilities. Difficulties caused by sanctions generally must be addressed through the sanctions-licensing and review framework, not by requiring a separate public authority to extinguish or indefinitely defer lawful debts.