Claimant based in Donbas and under sanctions loses appeal over council tax liability

Nigel Cooper KC, sitting as a deputy High Court judge, said claimant Graham Phillips had no realistic prospect of success.

The judge refused permission to seek judicial review of decisions of the London Borough of Islington, saying he was making “a collateral attack” on the foreign secretary’s decision to sanction him for this activities in Donbas,

Mr Phillips was in 2022 designated by the foreign secretary under the Russia (Sanctions) (EU Exit) Regulations 2019.

At the time he was in the Donbas region war zone of Ukraine generating social media output for his YouTube channel.

He said following his designation, he had no access to his bank accounts and no means of supporting himself.

A review by the FCDO and an application to the High Court both failed to get the designation lifted.

Mr. Justice Johnson noted at that time that Mr Phillips refused to apply for a licence from the Office of Financial Sanctions Implementation (OFSI) to vary the conditions imposed on him because he did not wish to “buy into” the system.

The Court of Appeal refused permission to appeal the judgment of Johnson J leaving him with no further domestic remedy.

Islington later made a council tax liability order against him.

Mr Phillips subsequently did gain an OFSI licence permitting him to spend £1,979.67 per month on basic needs but said he could not use these funds to return to the United Kingdom and had no means of meeting his council tax liability.

In August 2025, the council confirmed he could not be exempt from council tax under a provision for prisoners because that applied only to those imprisoned by a UK court. The council said it would begin recovery action.

Mr Phillips then sought judicial review on two grounds. The first was that Islington’s refusal to reduce or waive council tax liability was illegal under s.6 of the Human Rights Act 1998 because there was a breach of Article 1 of Protocol 1 (A1P1) of the European Convention on Human Rights.

“In summary, the claimant says that the decision of the defendant to enforce a council tax liability, which the state has stripped him of the ability to pay, is an arbitrary and disproportionate interference with the claimant's A1P1 rights,” Mr Cooper said.

His second ground was that Islington’s decision to pursue enforcement action was Wednesbury unreasonable because the state had deprived him of his ability to meet his liabilities.

He said this meant the council should have exercised its discretion under s.13A of the Local Government Finance Act 1992 in his favour.

Islington submitted permission should not be granted for judicial review because there was a suitable alternative remedy through an appeal to the valuation tribunal, the claim was out of time and there were lawful routes including an application for a specific licence.

The council said the proper mechanism to challenge the lawfulness of continued designation was an application for ministerial review under s.23 of the Sanctions and Anti-Money Laundering Act 2018.

Islington said there is no violation of the claimant's A1P1 rights and even if the assets freeze did affect his liability to pay council tax, this does not require Islington to stay enforcement action or reduce his liability to nil.

Mr Cooper concluded: “…the claimant has no argument with any realistic prospect of success that the defendant acted illegally, irrationally or in a way which is Wednesbury unreasonable”.

He said there could be no challenge to the lawfulness of the foreign secretary's imposition of sanctions “in circumstances where that decision and the subsequent refusal to review that decision have been upheld by this court and the Court of Appeal”.

Islington was pursuing the legitimate aim of funding local public services through council tax, which was an objective that justified the limitation of Mr Phillips' A1P1 rights.

“There is no lawful basis on which the claimant can claim an exemption,” Mr Cooper said.

“The council is entitled as a matter of its discretion to end the stay of enforcement that was in operation until the end of October 2025. More generally, the defendant is entitled to conclude that the fact that a person is a sanctioned individual is not a ground on which to stay enforcement of that person's liability to council tax.”

He concluded: “The essence of the claimant's case is that the state has frozen his assets and stripped him of the ability to raise any funds such that it would be unfair for the defendant to now maintain a tax liability against the claimant.

“This simply highlights that the claimant's case against the defendant is a collateral attack on the decision by the Secretary of State to designate the claimant and impose an asset freeze on him.”

Mark Smulian