[1975] 1 All ER 538

The taxpayer was born in Germany in 1896 and was therefore a German national by birth. He was a Jew and for many years was a teacher at a Jewish orphanage in Bavaria. In 1939, after a period of detention in a concentration camp under the Nazi regime, he came to live in England where he remained during the war. A German decree enacted on 25 November 1941 provided, inter alia: 'A Jew loses his German citizenship (a) if at the date of entry into force of this regulation, he has his usual place of abode abroad ... ' The decree also provided for the confiscation of the property of Jews thus deprived of their nationality and for the use of that property 'to further aims connected with the solution of the Jewish problem'. Hostilities between the United Kingdom and Germany ceased on 8 May 1945. On 24 May 1948 the taxpayer became a British subject by naturalisation. The German nationality law of 1913 provided that a German who had neither his habitual residence nor his permanent abode in Germany lost his nationality when he acquired a foreign nationality if such acquisition was made on application by him unless he had the written permission of the competent authority of his native country to retain his nationality. In May 1949, on the founding of the Federal Republic of Germany, a Basic Law was enacted which, by art 116(2)^a, provided that former German citizens who had been deprived of their German nationality during the period from 1933 to 1945, 538were to be 'renaturalised' on application and, furthermore, were to be considered as not having been deprived of their nationality if they took up residence in Germany after 8 May 1945 and did not express any wish to the contrary. The taxpayer, however, remained resident in the United Kingdom. The war between the United Kingdom and Germany officially ended on 9 July 1951. In 1953 the Federal Government of Germany awarded the taxpayer, as an employee of a Jewish religious community, a pension from 1 October 1952 to compensate for his persecution under the Nazi regime. He was given a second pension by the German authorities in 1961 when he attained the age of 65. Both pensions were payable out of public funds of the Federal Republic. In 1968 the German Federal Constitutional Court held that art 116 of the Basic Law had been formulated on the assumption that the 1941 decree 'was void ab initio' but that the effect of art 116(2) was that 'persecutees' who had acquired a foreign nationality could regain their nationality by taking up residence in Germany or by making an application but that for persecutees who had not acquired a foreign nationality the effect of art 116(2) was that the German state 'does not treat them as Germans unless they assert their German nationality by taking up residence or making an application'. The taxpayer was assessed to income tax in respect of the pensions paid to him by the German government for each of the years of assessment 1953-54 to 1967-68 inclusive. The taxpayer, who had continued to be resident in the United Kingdom during those years and had made no application to be renaturalised under art 116(2) of the Basic Law, appealed against the assessments, claiming exemption under double taxation conventions concluded between the United Kingdom and Germany in 1954 and 1964. Under the provisions of each of those conventions, which were set out in the schedule to statutory instruments of 1955 and 1967^b, the pensions were exempt from United Kingdom income tax if during the relevant years the taxpayer was a 'national' both of the United Kingdom and Germany, but they were not exempt if he was a national of the United Kingdom only. The taxpayer contended that during the relevant years of assessment he had retained his German nationality since (i) the 1941 decree could not be recognised by English law, (ii) the 1913 nationality law had not operated to deprive him of his German nationality when he became a British subject in 1948, and (iii) after the enactment of art 116(2) of the Basic Law he continued to be a German national even though, in default of an application for renaturalisation, he was not treated as such by the German state. See the Double Taxation Relief (Taxes on Income) (Federal Republic of Germany) Order 1955 (SI 1955 No 1203), Sch, art IX(1), and the Double Taxation Relief (Taxes on Income) (Federal Republic of Germany) Order 1967 (SI 1967 No 25), Sch, art IX(2)

Held - The question whether under German law the taxpayer had retained his German nationality was to be determined by the English courts as a question of fact. The evidence showed that, on the assumption that the taxpayer had not lost his German nationality on becoming a naturalised British subject in 1948, he had nevertheless lost it in May 1949 when the Basic Law was enacted. Since he had neither applied for renaturalisation nor taken up residence in Germany during the relevant years of assessment, he was not treated by German law as a German national and no distinction could be drawn between a person who was not a German national and a person who was in law 'not treated' as a German national; it was, furthermore, immaterial that the taxpayer had an automatic right to acquire German nationality on application or on returning to live in Germany. It followed that the taxpayer was not, during the relevant years of assessment, a German national and accordingly was not entitled to relief under the relevant conventions (see p 554 c and d, p 556 c and g, p 557 a, p 562 b to g, p 564 j and p 572 j to p 573 c, post)
   Per Curiam. (i) The English courts will only refuse to recognise a change in the status of an enemy alien effected under the law of the enemy country during wartime so long as the war subsists. Once the war is over the courts will recognise and give539 effect to the change. For that purpose 'wartime' is to be regarded as coming to an end when fighting ceases and not as continuing until the United Kingdom government declares officially that the state of war is over (see p 553 g, p 556 g, p 557 a, p 565 c and f to h and p 570 d, post); R v Home Secretary, ex parte L [1945] KB 7 and Lowenthal v Attorney General [1948] 1 All ER 295 explained.
   (ii) Where a national of an enemy state becomes a British subject by naturalisation in time of war it does not follow that he thereby ceases to be a national of the enemy state (see p 555 f to h, p 556 g, p 557 a, p 569 a and p 570 d, post).
   (iii) The fact that legislation by which a foreign state deprives a man of his status as a citizen of that state can be described as 'confiscatory' does not necessarily entail the consequence that English law should deem him to remain a citizen of that state for the purpose of deciding whether or not he is entitled to property in England, his right to which depends on his being or not being a citizen of that state at some point in time (see p 553 g, p 556 g, p 557 a, p 566 d to f and p 570 d, post).
   Per Lord Hodson, Lord Cross of Chelsea and Lord Salmon (Lord Hailsham of St Marylebone and Lord Pearson dissenting). Legislation enacted by a foreign state, such as the 1941 decree, which takes away without compensation from a section of the citizen body singled out on racial grounds all their property on which the state can lay its hands and, in addition, deprives them of their citizenship is contrary to international law and constitutes so grave an infringement of human rights that the English courts ought to refuse to recognise it as law at all (see p 556 j to p 557 a, p 566 g, p 567 a to g, p 570 j to p 571 a and p 572 c d and f, post).
   Decision of the Court of Appeal [1972] 3 All ER 1106 affirmed on different grounds.

Notes
For double taxation relief, see 20 Halsbury's Laws (3rd Edn) 455, para 855, and for cases on the subject, see 28(1) Digest (Reissue) 454, 455, 1636-1638.
   For alien enemies, see 4 Halsbury's Laws (4th Edn) 458, para 950, and for cases on the subject, see 2 Digest (Repl) 212-215, 259-288.
   For the recognition of foreign decrees effecting seizure of property, see 8 Halsbury's Laws (4th Edn) 446, para 663, and for cases on the subject, see 11 Digest (Repl) 325, 19, 20.

540

At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts held on 19 January 1970 Meier Oppenheimer appealed against assessments to income tax in the sum of £800 for each of the years 1953-54 to 1967-68 inclusive. Shortly stated the question for the commissioners' decision was whether certain pension payments received by Mr Oppenheimer from German public funds qualified for exemption from income tax under the terms of the double taxation relief conventions made between the United Kingdom and the Federal Republic of Germany. The commissioners heard evidence from Dr Ernst Josef Cohn, a Doctor of Laws of the University of Breslau, formerly Professor of Law at the university, and an Honorary Professor of Laws in the University of Frankfurt-am-Main.
   As a result of the evidence both oral and documentary adduced before the commissioners they found the following facts proved or admitted: (1) Mr Oppenheimer was born in Germany in 1896. From 1919 to 1938 he was a teacher at a Jewish orphanage at Furth, Bavaria. On his release in December 1938 from a period of detention in the concentration camp at Dachau he resumed teaching until, in April 1939, he emigrated to England where he had since resided. He became a naturalised British subject in 1948. The certificate of naturalisation issued to the taxpayer showed in the particulars relating to him 'Nationality German'. (2) In 1953 Mr Oppenheimer was notified by the German Federal Department for Compensation to Employees of Jewish Religious Communities that he had been awarded a pension (the 'first pension') with effect from 1 October 1952. In April 1961 he attained the age of 65 and was awarded a pension (the 'second pension') under the provisions of s 25(1) of the 'Angestelltenversicherungsgesetz in der Fassung vom 23.2.1957 (AVG)' with effect from 1 April 1961, from which date the first pension was abated by 87ב8 per cent. The provisions of s 25(1) of the AVG provided:

Both the first pension and the second pension were payable out of public funds of the Federal Republic of Germany. (3) The evidence given by Dr Cohn, which was accepted, was to the following effect: (a) by a decision of the Federal German Constitutional Court given in 1968, which was binding on all Federal German courts by virtue of a subsequent decree of the Federal German Government, the decree of 25 November 1941 was absolutely void ab initio; (b) that decision had no retrospective effect; (c) the German nationality law of 22 July 1913 remained in force (with certain amendments not relevant for present purposes) and was unaffected by the decision; (d) in his opinion, under German law, if the taxpayer had not lost German nationality under the decree of 25 November 1941 he lost it under the German nationality law of 22 July 1913 on being naturalised a British subject in 1948.
   No dispute arose regarding figures, and the only question for the commissioners' decision was whether or not the pension payments made to Mr Oppenheimer were exempt from United Kingdom income tax (for the years 1953-54 to 1959-60) by virtue of para (1) of art IX of the convention between the United Kingdom and the Federal Republic of Germany for the avoidance of double taxation which was set out in the schedule to the Double Taxation Relief (Taxes on Income) (Federal Republic of Germany) Order 1955^c and (for the years 1960-61 to 1967-68) by virtue of para (2) of art IX of the similar convention set out in the schedule to the Double Taxation Relief 541(Taxes on Income) (Federal Republic of Germany) Order 1967^d. It was common ground that, for the aforementioned exemptions to apply, it would require to be shown (i) that when he received the pension payments Mr Oppenheimer (who was admittedly a national of the United Kingdom at the material times) was also a German national, and (ii) that the pension payments fell within the description 'Remuneration, including pensions, paid, in respect of present or past services or work ... ' In regard to the question whether Mr Oppenheimer was a German national at the material times, 'national' in the context in which it appeared in art IX of each of the conventions was not defined in either convention. Having regard to the terms of art II (3) of each convention, it was agreed before the commissioners that the question fell to be determined according to English law. It was not in dispute that Mr Oppenheimer was a German national from birth until at least 25 November 1941. On that date there was promulgated, with immediate effect, a decree of the then National Socialist Government of Germany depriving of German citizenship Jews whose usual place of abode was outside Germany-a class which included Mr Oppenheimer.

   It was contended on behalf of Mr Oppenheimer: (1) that Mr Oppenheimer's loss or purported loss of German citizenship under the decree could not be recognised by the English courts, and that, whatever the position might have been under German law, under English law Mr Oppenheimer remained a German national after 25 November 1941 on the grounds that: (a) English law did not recognise a change of status in its nationals brought about by a decree of a foreign enemy state in wartime, and/or (b) English law would not give effect as far as it related to matters in this country to a penal and confiscatory decree of a foreign country; (2) that payments made to Mr Oppenheimer by way of both the first pension and the second pension fell within the description 'Remuneration, including pensions, paid in respect of present or past services or work ... '; (3) that the payments were exempt from tax under the provisions of art IX of the conventions.
   It was contended on behalf of the Crown: (1) that under English law the question whether an individual was a national of a foreign state fell to be determined by reference to the municipal law of that state; (2) that so far as the English courts were concerned questions of foreign law were questions of fact; (3) that even if Mr Oppenheimer did remain a German national after 25 November 1941, which was not admitted, he ceased to be such on applying for and acquiring British nationality in 1948 (not having, prior to the acquisition, applied for and been granted the written permission of the competent German authority to retain his German nationality) by virtue of the German nationality law of 22 July 1913; (4) that payments made to Mr Oppenheimer by way of the second pension did not fall within the description 'Remuneration, including pensions, paid, in respect of present or past services or work ... '; (5) that no exemption was due in respect of payments made to the taxpayer by way of either the first pension or the second pension under the provisions of art IX of the conventions; (6) that the appeal should fail in principle and should be adjourned for the agreement of figures.
   The commissioners who heard the appeal took time to consider their decision and gave it in writing on 18 February 1970 as follows:

Figures were subsequently agreed between the parties and on 30 June 1970 the commissioners adjusted the assessments accordingly.
   Mr Oppenheimer appealed against that decision. On 21 December 1971 Goulding J ([1972] 2 All ER 529, [1972] Ch 585) allowed the appeal and remitted the assessments to the commissioners for adjustment or discharge, holding that Mr Oppenheimer was both a German and British national during the relevant years of assessment on the grounds (i) that the 1941 decree could not be recognised since an enemy decree made during wartime and purporting to make enemy nationals stateless would not be recognised by the English courts; (ii) that accordingly Mr Oppenheimer remained a national of Germany for the purposes of English law; and (iii) that since the 1941 decree was, however, effective in German law to deprive him of his German nationality, the nationality law of 1913 could not operate to deprive him of German nationality in 1948 for, at the time when he acquired British nationality, he was not in German law a German national. The Crown appealed against that decision and, on 20 July 1972, the Court of Appeal ([1972] 3 All ER 1106, [1973] Ch 264) (Lord Denning MR, Buckley and Orr LJJ) reversed the decision of Goulding J holding that during the relevant years of assessment Mr Oppenheimer was a national of the United Kingdom only on the following grounds: (i) (by Buckley and Orr LJJ) that, although so long as the war continued, English courts could not recognise a wartime decree made by an enemy state which purported to deprive its citizens of their enemy nationality, once the state of war had terminated, the courts were bound to recognise the change of status brought about by such a decree if the decree was still valid and effective under the law of the former enemy state, and that, accordingly, following the conclusion of the peace treaty with Germany on 9 July 1951, the English courts were bound to recognise the 1941 decree as having deprived Mr Oppenheimer of his German nationality; and (ii) (by Lord Denning MR) that Mr Oppenheimer had lost543 his German nationality on becoming a British subject in 1948 when the United Kingdom and Germany were still at war for, at such a time, allegiance to both countries was incompatible and, by applying for naturalisation, Mr Oppenheimer had accepted the repudiation by the German authorities in 1941 of their obligation to protect him by depriving him of his German nationality. Mr Oppenheimer appealed to the House of Lords.

5 February 1975. The following opinions were delivered.

LORD HAILSHAM OF ST MARYLEBONE LC. My Lords, I have had the opportunity of reading the speech of my noble and learned friend, Lord Cross of Chelsea, and, for the reasons he gives, I agree the cause be remitted back to the Special Commissioners for further consideration.

LORD HODSON. My Lords, I agree with the terms of the order proposed by my noble and learned friend, Lord Cross of Chelsea.

LORD PEARSON. My Lords, I have had the advantage of reading the opinion of my noble and learned friend, Lord Cross of Chelsea, and I agree that for the reasons which he has given an order should be made in the terms which he has proposed.

LORD CROSS OF CHELSEA. My Lords, the question at issue in this appeal is whether the appellant, Mr Oppenheimer, is liable to pay United Kingdom income tax for the tax years 1953-54 to 1967-68 inclusive on certain pension payments which he received during those years from German public funds. Mr Oppenheimer, who is a Jew, was born in Germany in 1896. From 1919 to 1939 he taught at a Jewish orphanage in Bavaria but in 1939, after having been detained for a short period in a concentration camp, he succeeded in leaving Germany and coming to this country where he has lived ever since. In 1948 he applied for and was granted a certificate of naturalisation and became a British subject. As a former employee of a Jewish religious community he has been since 1953 in receipt of a pension payable out of the revenues of the German Federal Republic. Conventions with regard to double taxation relief were made between the United Kingdom and the Federal Republic in 1954 and 1964 and made law in this country by the Double Taxation Relief (Taxes on Income) Federal Republic of Germany Orders 1955 and 1967. Article IX(1) of the former convention-which Mr Oppenheimer contends is applicable to the first seven assessments in dispute-runs as follows:

Article IX(2) of the second convention which Mr Oppenheimer contends is applicable to the other eight assessments is to the same effect. Mr Oppenheimer is, of course, undoubtedly a national of this country and the Crown admits for the purpose of this case that the pensions in question fall within the description in the Conventions. The point at issue is whether the appellant was in the years of assessment not only a British subject but also a German national. Dr Cohn, an expert in German law called544 by the Crown, gave evidence before the commissioners, to whom Mr Oppenheimer had appealed against the assessments made on him, which the commissioners understood to be to the following effect: (1) The German nationality law of 22 July 1913 provides that a German who is neither domiciled nor permanently resident in Germany loses his nationality on acquiring a foreign nationality unless he has the previous written permission of the appropriate German authority to retain it. (2) A decree of 25 November 1941, enacted by the 'Nazi' government during the war, provided that a Jew of German nationality who had his usual place of abode abroad when the decree came into force should lose his nationality forthwith. (3) By a decision of the Federal German Constitutional Court given in 1968 the decree of 25 November 1941 was held to be absolutely void ab initio but nevertheless that decision had no retrospective effect. (4) In Dr Cohn's opinion, if Mr Oppenheimer had not lost his German nationality under the decree of 25 November 1941 he lost it under the nationality law of 22 July 1913 on becoming naturalised as a British subject in 1948.
   The commissioners accepted the evidence of Dr Cohn, and held that Mr Oppenheimer ceased to be a German national at latest on 4 June 1948, when he became a British subject. They therefore confirmed the assessments. At the request of the appellant they stated a case for the opinion of the court which came before Goulding J ([1972] 2 All ER 529, [1972] Ch 585) who reversed their decision. He held first that English law would not recognise the decree of 25 November 1941 as having any effect with regard to Mr Oppenheimer since it purported to alter during wartime the nationality of someone who was then an enemy alien and, secondly, that Mr Oppenheimer had not lost his German nationality by the law of 22 July 1913, since under German law he had already ceased to be a German national before he became a British subject-although our law regarded him as still a German national. The respondents appealed to the Court of Appeal ([1972 3 All ER 1106, [1973] Ch 264) (Lord Denning MR, Buckley and Orr LJJ) who reversed the decision of Goulding J and restored that of the commissioners. Lord Denning MR held that whatever the position might be under German law English law would not regard an enemy alien whom it allowed to become naturalised as a British subject during wartime as continuing thereafter to be a national of the enemy country as well as a British subject. Buckley and Orr LJJ based their judgments on a different ground-namely, that although English law would not recognise a change in the status of an enemy alien effected by the alien's domestic law during wartime, that non-recognition only lasted so long as the state of war lasted, and that consequently when the state of war between this country and Germany came to an end, our law would recognise that Mr Oppenheimer had been deprived of his status as a German national by the decree of 25 November 1941. Mr Oppenheimer appealed to this House from the decision of the Court of Appeal and the appellate committee heard arguments from both sides on the basis of the findings as to German law made by the commissioners and set out in the stated case. But before we reported our views to the House we became aware that there were grounds for thinking that the findings of the commissioners as to the relevant German law might have been based on inadequate material and that, in particular, art 116(2) of the Constitution of the Federal Republic enacted in 1949 before the years of assessment might have a bearing on the point to be decided. We therefore put the appeal back into the list for further argument and, as a result of the discussion which then ensued, it became clear-and was accepted by counsel on both sides-that the case ought to be sent back to the commissioners for further findings as to the relevant German law. I would, therefore, propose that an order be made in the following terms:

LORD SALMON. My Lords, I agree with my noble and learned friend, Lord Cross of Chelsea.

Order accordingly.
   The following supplementary case was stated by the commissioners under the direction of the House of Lords.
   [Paragraph 1 recited the order made by the House of Lords and continued:] Of the two commissioners who heard Mr Oppenheimer's appeal on 19 January 1970 one has since retired from the public service and was not available to carry out the direction of the House of Lords. One of the parties was not prepared to consent to the proceedings being continued before the continuing commissioner under the terms of s 45(3) of the Taxes Management Act 1970. With the agreement of both parties to the appeal, the proceedings were continued with the continuing commissioner and another commissioner.
   2. At a further meeting of the commissioners held on 29 April to 3 May 1974 inclusive, the order of 13 December 1973 was read, and evidence heard from Dr Franz Paul Jaques, a member of the English Bar, a practising German lawyer and a Doctor of Law of the University of Hamburg together with further evidence from Dr Ernst Josef Cohn and the observations of counsel on all the evidence adduced before the commissioners.
   [Paragraph 3 listed the documents produced before the commissioners.]
   4. As a result of the evidence both oral and documentary adduced before the commissioners the following facts were proved or admitted:

Background information
   (a)(i) The basis of the German law relating to nationality is the 1913 law which in s 17 thereof sets out grounds for loss of nationality and in art 25 thereof provides for loss of German nationality by the reason of the acquisition of a foreign nationality. This law is hereinafter referred to as 'the nationality law'. (ii) The Nazis came into power in Germany in 1933 and in July of that year there was passed a law which gave the government power by decree to deprive of their German nationality individuals considered undesirable. Under that law numerous Germans were individually deprived of German citizenship. In 1935 there was enacted another act546 which created two classes of citizens, those of German or kindred blood and, secondly, all others. This act enabled the German government by decree to deprive of their nationality citizens in the second class. The 1941 decree or 11th Ordinance was made under the 1935 legislation. (iii) The Nazis surrendered to the Allied Powers on 8 May 1945, and shortly thereafter the 1941 decree was repealed by Allied Military Government legislation. It is generally accepted by German lawyers that this repeal by the appropriate occupying authority was without any retrospective effect. (iv) Between 1945 and 1948 the governments of the various German lander in the United States zone of occupation of Germany passed a uniform law whereunder expatriates resident in the respective lander were given the right to apply to have their expatriation declared null and void. (v) The new constitution of the Federal Republic of Germany was promulgated as the Basic Law on 23 May 1949. (vi) By a declaration dated 9 July 1951 the government of the United Kingdom declared that the state of war between the United Kingdom and Germany had ended. (vii) There is a presumption in German law that German civilians who went missing during the Second World War or who were sent to concentration camps and never came out had died on 8 May 1945 the day on which the German armed forces surrendered to the Allied forces. (viii) The Constitutional Court is the supreme court in Germany in relation to matters affecting the constitution as enacted in the Basic Law. Its jurisdiction is set out in art 93 of that law. The decisions of the Constitutional Court are declaratory and, therefore, retrospective. A decision of the Constitutional Court declaring a Federal statute valid or invalid must be published in the official gazette and when published has the force of a statute. Other decisions of the Constitutional Court (for instance those interpreting the Constitution) do not have the force of a statute but all governmental agencies and all courts are nonetheless bound not only by the decision but by the principle on which it is based. That part of the reasoning of the Constitutional Court which is not essential to its decision is not binding on other courts but in practice is normally followed. (ix) In 1948 when the appellant was applying for British nationality conditions in Germany were such that he could not have effectively made application under the nationality law for the written permission of the competent authority to retain his German nationality. (x) The following terms are used in succeeding paragraphs: 'expatriate' or 'persecutee', a German affected by a decree made under the Nazi legislation of 1933 or 1935; hence 'expatriation' and 'expatriated'; Germany, the Federal Republic of Germany; art 116, art 116 of the Basic Law.
   (b) It was agreed between the parties to the appeal that before considering what answers should be given to the question posed to the commissioners it was desirable to consider the decisions of the German courts. Those decisions were all concerned with various matters affecting the rights and liabilities of expatriates. As they made plain, the question of the proper treatment of those individuals under the law was a peculiarly sensitive one for the new German state. It was anxious on the one hand to restore to the expatriate the nationality which the Nazis had purported to take away, but it was not disposed on the other hand to force such restoration on an unwilling recipient. That somewhat ambivalent attitude finds expression in the various cases and makes them neither easy of reconciliation nor productive of clear principles of general application.
   (c) The commissioners considered the relevant decisions: (i) They were referred to two decisions of the Federal Constitutional Court. The later of those two decisions, the 1968 decision, dealt with a German Jewish refugee who had emigrated to Amsterdam shortly before the Second World War, had apparently been deprived of his German nationality by the 1941 decree and had subsequently been deported from Amsterdam in 1942. Since nothing was known of his fate thereafter, he was presumed to have died on 8 May 1945 in accordance with the relevant compensation law. The question which fell to be decided was whether he had died a German national, or without nationality. As the commissioners understood the evidence of the expert witnesses three points decided by the Constitutional Court formed part of the binding547 ratio decidendi of that case: (a) that the 1941 decree was void ab initio; (b) that art 116(2) was not directly applicable to persecutees who died before 8 May 1945; and (c) that German nationality should be forced on persecutees who died before 8 May 1945, as little as on those who died after that date; only if there were any concrete indications showing that the persons in question, knowing that they could return to a free, democratic and lawful Germany-a Germany governed by the rule of law-would not have wanted to make use of that possibility, was it to be assumed that they wished to renounce their German nationality. In relation to those points there was substantial agreement between the witnesses; divergence between their views emerged when it came to reconciling the 1968 with the 1958 decision and applying art 116(2) to persecutees who survived 8 May 1945. In the course of the decision of the Constitutional Court in the 1968 case the following passage occurred following a reference to and citation of art 116(2):

Following that passage and a review of the legislative history of art 116 there occurs a further passage on which the views of the witnesses diverged:

Dr Jaques approached those passages on the basis that it was fundamental to the decision of the Constitutional Court that the 1941 decree was void ab initio and had not deprived the persecutees affected by it of their German nationality. In the case of a persecutee who died before the Basic Law took effect, in the absence of the clearest possible evidence of an intention to renounce German nationality, he had to be taken to have died a German since nothing had occurred to deprive him of his German nationality. The reference to persecutees who survived being entitled to similar treatment implied that they, too, retained their German nationality since nothing had occurred to deprive them of it. Assertion of German nationality in one of the ways contemplated in art 116(2) would be no more than declaratory. Article 116(2) could not itself be said to have deprived the persecutees of their German nationality since its purpose was indemnificatory: it was certainly not the function of art 116(2) to give effect to the National Socialist legislation declared by the Constitutional Court to be void ab initio. The principle of not forcing German nationality on a persecutee against his will was to be met by the state not considering a persecutee as a German national until he himself took one of the simple steps identified in art 116(2) to assert his German nationality. Dr Cohn took a different view. In the548 passage cited he considered that what the Constitutional Court was saying with regard to persecutees who survived was that, notwithstanding the fact that they did not lose their German nationality by virtue of the 1941 decree which was void, nonetheless the German state would not treat them as being Germans unless they relied on their nationality by residence or application. It had been suggested that they retained a kind of shadowy, theoretical or 'half' nationality. But Dr Cohn preferred to interpret the words used somewhat differently. The Constitutional Court did not say that surviving persecutees still possessed German nationality. It only said that they did not lose it through the expatriation which the 1941 decree purported to effect. Though not in the position of having lost their nationality, they no longer currently had it unless they established residence or made application. Any other conclusion would result in German nationality being forced on them. The Constitutional Court was in effect saying to such persecutees, although you have not been expatriated, unless you assert your nationality you are deemed not to be Germans. The furthest Dr Cohn felt himself able to go in expressing the matter in English terms was to say that a persecutee in the position of Mr Oppenheimer could not be said to have been deprived of his German nationality by the 1941 decree, but, having survived 23 May 1949 and not having established residence in Germany or made application under art 116(2) he was treated as if he had been so deprived.
   (ii) The relevance of the 1958 decision of the Constitutional Court, on which the views of Dr Jaques and Dr Cohn also diverged, was in relation to the question whether if Mr Oppenheimer still had German nationality when he applied for British nationality in 1948, he then lost it by virtue of the nationality law of 1913 which provided in effect that a non-resident German lost his German nationality if he acquired a foreign nationality without first obtaining permission to retain his German nationality. The 1958 case concerned a German Jewish refugee who abandoned his residence in Germany in 1934, settled in the United States of America, was expatriated in 1938, was granted United States nationality in 1946, and in 1948 returned to live in Germany. He claimed to be a German national by virtue of the second sentence of art 116(2). The following passage occurred in the course of the decision of the Constitutional Court:

The 1958 case concerned a refugee who had returned to live in Germany. If he had in fact acquired residence in Germany and had indicated no contrary intention, he was clearly entitled to be treated under the second sentence of art 116(2) as never having been deprived of his nationality. Dr Jaques, however, regarded the decision as having a wider application. He thought it to be an absolute and clear-cut authority for the proposition that the acquisition of a non-German nationality by a persecutee549 prior to 23 May 1949 did not result in loss of his German nationality by virtue of s 25 of the nationality law of 1913. He understood the last sentence of the above quoted passage to mean that to hold that s 25 of the nationality law of 1913 applied to such a persecutee would not only frustrate the indemnificatory purpose of art 116(2) but also-and quite independently-be contrary to 'good faith' which is a paramount and well-defined principle of German law comparable to the concept of equity in English law, which made it inappropriate to apply the nationality law to a citizen who would have no cause to consider the consequences of his application for foreign nationality and who, moreover, at the relevant time would have been unable to obtain permission to retain his German nationality had he recognised the need to do so. Dr Jaques saw no conflict between what he regarded as the authoritative finding of one division of the Constitutional Court in 1958 and the comments of the other division in 1968 that persecutees who had not lost their German nationality by virtue of the purported expatriation 'may of course have lost it for some other reason, especially through acquisition of a foreign nationality', because this was true of persecutees who had acquired a foreign nationality after 23 May 1949. He did not think it possible that the court in 1968 intended to overrule the 1958 decision. Dr Cohn, on the other hand, took a different view of the passage cited from the 1958 decision. At the date when that decision was made the effect of art 116(2) was thought to be that it brought about a retrospective regrant of German nationality to a refugee who returned and took up residence in Germany. In 1958 it was still generally thought that the expatriations of 1941 were legally effective notwithstanding the abrogation of the 1941 decree by the Allied Military Government legislation. The question which the court had then to decide was whether the effect of s 25 of the nationality law of 1913 was that the German nationality retrospectively regranted was nonetheless lost by the intervening event of the refugee having acquired United States citizenship. Article 116(2), second sentence, the Constitutional Court said, had an indemnificatory purpose: in other words, it was to be retrospective in its effect. The retrospective effect must counter the effect of s 25 of the nationality law of 1913. That case, Dr Cohn explained, was the only decision dealing with a returning persecutee retrospectively granted German nationality. The court was concerned only with the question whether art 116(2) overruled the nationality law of 1913 in the case of expatriates returning to Germany and it answered this question in the affirmative. As to the passage in the 1968 decision which referred to persecutees who might have lost their German nationality through acquisition of a foreign nationality, Dr Cohn found nothing inconsistent between this passage and the 1958 decision. In the 1968 decision the meaning of the comment was that a persecutee, who had not lost his German nationality by reason of the 1941 decree would as a rule lose it if he subsequently acquired a foreign nationality. The significance of art 116(2) for such a persecutee was that even he could recover his German nationality by taking up residence in Germany or applying for a regrant.
   (iii) In addition to the 1958 and 1968 decisions of the Constitutional Court the commissioners were referred to two decisions of the Berlin District Court, the 'Hong Kong dentist's decision' of 1968 and the 'mental incapacity decision' of 1971, to a decision of the Berlin Court of Appeal, the 'Luxembourg decision' of 1970, and to a decision of the Supreme Court, the 'Dutch decision' of 1962. In the latter case the Supreme Court held that the 1941 decree had never been law and was void ab initio. However, by virtue of the fact that the unlawful laws and decrees of the Nazis were actually applied within the sphere of power of the Nazis to the legal relationships of those concerned, factual conditions were created which could not simply be treated as if they had never happened. The court therefore recognised the validity of a declaration of death made by a foreign court which could have had jurisdiction only on the footing that the deceased expatriate had lost his German nationality, although on the correct view of the law the expatriate had not lost his German nationality by his expatriation. In the Luxembourg case the Court of Appeal dealt with the case of550 a persecutee who died in October 1945, after 8 May 1945 but before the coming into force of the Basic Law. Following the 1968 decision of the Constitutional Court the Berlin Court of Appeal held that such a persecutee was not deprived of his German nationality by the 1941 decree but was to be taken to have retained it in the absence of any concrete indication that he wanted to relinquish German nationality. In the 1971 decision of the Berlin District Court that principle was extended to a persecutee who died in England in 1956 but who by reason of mental incapacity could not exercise his intention to comply with one of the sets of facts provided for in art 116(2). The court held the application of art 116(2) to be excluded since it could be applied only to those cases in which the persons in question had a chance to make known their intention by complying with one or other of the sets of requirements referred to in the article. The commissioners understood the implication of those last two decisions to be that art 116(2) applied to a persecutee who survived the coming into force of the Basic Law and was thereafter in a position to avail himself of one or other of the means of asserting German nationality indicated by the article. Dr Jaques was constrained to agree that it was implicit in these decisions that in the case of a persecutee who was not mentally incapacitated when the Basic Law was adopted, one could look simply to art 116(2) to see whether or not he was a German national. He stopped short, however, of accepting any suggestion that the Basic Law could be treated as a ground for loss of nationality. Dr Cohn took the view that it was implicit in what was said in those cases about the application of art 116(2) that a persecutee who survived the coming into force of the Basic Law and enjoyed full capacity did not have German nationality unless he reapplied for it or returned to live in Germany. The 1968 decision of the Berlin District Court dealt with a persecutee who died in Hong Kong in 1954. The court held that he died a German national notwithstanding that he had made no application under art 116(2). In reaching that conclusion the court in terms disagreed with the reasoning of the 1968 decision of the Constitutional Court:

Dr Jaques took the view that in this passage the members of the court were criticising the 1968 decision of the Constitutional Court but that the District Court's decision, to the effect that a persecutee who neither adopted a foreign nationality nor decided against German nationality had to be treated in the same way as those who did not survive the coming into force of the Basic Law and accordingly had to be treated as a German national unless he clearly evinced a contrary intention, was consistent with what had been said by the Constitutional Court. Dr Cohn, however, was of the view that the District Court clearly understood the 1968 decision of the Constitutional Court and deliberately deviated from it. Insofar as the 1968 decision of the Constitutional Court dealt with the position of persecutees who survived the coming into force of the Basic Law the principles stated by the court were not essential to its decision and were therefore strictly not binding on the Berlin District Court.
   (d) In the light of what he took to be the German law having regard to the cases mentioned Dr Jaques answered the question whether for the purposes of German551 municipal law Mr Oppenheimer had been deprived of his German citizenship by the 1941 decree with a firm, No, Dr Cohn found the matter too complex for a simple answer, Yes or No By the 1968 decision of the Constitutional Court the 1941 decree was held to be invalid and as not depriving Mr Oppenheimer of his German citizenship. But on the coming into effect of the Basic Law Mr Oppenheimer was no longer treated by the German state as a German national unless he applied for a regrant of his nationality or returned to Germany, and it followed that from then on he was no longer a German national. The effect of the 1968 decision taken in conjunction with the 1941 decree and art 116(2) was that from 23 May 1949 Mr Oppenheimer had been effectively deprived of German nationality. To the second question,

Dr Jaques again gave the simple answer, No. Dr Cohn's answer was that although Mr Oppenheimer had not been deprived of his German citizenship by the 1941 decree, he was by virtue of having been naturalised as a British subject and having taken the oath of allegiance in 1948, no longer effectively a German national unless he either returned to Germany or was regranted German nationality. So far as Dr Jaques was concerned there was no question of Mr Oppenheimer having lost his German nationality and therefore no question of his citizenship being reinstated. Dr Cohn considered that nothing had occurred by which Mr Oppenheimer's citizenship had been reinstated but that it would have been reinstated if he had returned to Germany or had applied under art 116(2).
   5. The commissioners made the following findings:

Miriam Nothman appealed against the decision of the Court of Appeal ([1972] 3 All ER 1106) (Lord Denning MR, Buckley and Orr LJJ) dated 20 July 1972 allowing an appeal by the Crown against an order of Goulding J dated 21 December 1971 whereby, on a case stated by the Special Commissioners, he reversed the decision of the commissioners dated 27 January 1970, on an appeal by Miss Nothman against assessments to income tax under Sch D in respect of profits described as 'German pension' for the years 1953-54 to 1964-65 inclusive, that payments received by the taxpayer were not exempt from income tax under the double taxation agreements concluded between the United Kingdom and the Federal Republic of Germany. The main issue raised in Miss Nothman's appeal was the same as that raised in Mr Oppenheimer's appeal, but, by a respondent's notice before the Court of Appeal, Miss Nothman had sought to uphold the decision of Goulding J on certain alternative grounds which had been rejected by him. The facts are set out in the opinion of Lord Cross of Chelsea.

LORD HAILSHAM OF ST MARYLEBONE. My Lords, I have had the advantage of reading in draft the illuminating opinion about to be delivered by my noble and learned friend, Lord Cross, and since in almost everything I agree with it my own opinion can be correspondingly short.
   The decisive point in this case is whether, during the assessment years, the appellant, Meier Oppenheimer, was a dual national possessing the German nationality (which had been his by birth) in addition to the British nationality which he acquired by naturalisation in 1948. If this question is answered affirmatively he can claim the advantage of art IX of the double taxation agreements^e between this country and the Federal Republic in respect of the pension he receives from them. Otherwise his appeal fails. It is true that under the terms of the agreements the question must be decided by English law (see art II(3)), but English law requires as a rule that the question of foreign nationality falls to be decided according to the municipal law of553 the foreign state concerned. (See Stoeck v Public Trustee ([1921] 2 Ch 67; see especially p 87).) According to English law that municipal law is a question of fact.

   It is, of course, the case that Russell J, in the course of Stoeck v Public Trustee, accepted that in exceptional cases English law might attribute a particular foreign nationality to persons who might not in fact possess it, as may have been done in Ex parte Weber and R v Vine Street Police Superintendent, ex parte Liebman. These, however, were cases in which a person who had never acquired British nationality was classed as an enemy alien in time of war owing to his continuing connection with the enemy state. I can see no reason for invoking such exceptional considerations here. It is also true that in time of war English law will for certain purposes disregard changes of status made by the enemy state during the war: cf R v Home Secretary, ex parte L, Lowenthal v Attorney General. But I agree with the Court of Appeal ([1972] 3 All ER 1106 at 1114, [1973] Ch 264 at 274, 275) that this particular doctrine no longer applies after the end of hostilities.
   It appears quite clearly from the supplemental case that Mr Oppenheimer's status for the assessment years in the municipal law of the Federal Republic depends on art 116(2) of the Grundgesetz or Basic Law as construed in the light of the decisions of the Constitutional Court, eg in 1968. The commissioners have found as a fact that in the assessment years Mr Oppenheimer was not regarded as a German citizen according to German law, unless he applied for it which he had not done during the assessment years, and I can see no reason for disputing this finding. On the contrary, were I to attempt the task on the basis solely of art 116(2) and the German decisions exhibited to the case I would reach the same conclusion. In arriving at their own conclusion the commissioners enjoyed in addition the oral evidence on this point of two German lawyers. The case below was argued largely on the question whether English courts would recognise the infamous decree of the National Socialist regime of 25 November 1941, which purported to deprive the appellant of his German nationality on the ground that he was a Jew. Goulding J ([1972] 2 All ER 529, [1972] Ch 585) upheld the appellant's contention on the grounds stated in R v Home Secretary, ex parte L and Lowenthal v Attorney General which were cited before him. But, as I have said, I agree with the Court of Appeal ([1972] 3 All ER at 1114, [1973] Ch at 274, 275) that this ground, founded on the public policy of a belligerent United Kingdom, continued only during the continuance of the state of war between this country and Germany. In the light of the supplemental case, the opinion of Buckley and Orr LJJ that the National Socialist decree, for all its discriminatory character, was effective to deprive Mr Oppenheimer of his citizenship cannot be supported, since the effect of the 1968 decision of the Constitutional Court, and the findings of the commissioners can now be seen to contradict this possibility. The position is governed by the present Federal Law and not by the National Socialist decree, and the conflicting considerations which led the Federal legislature to adopt the particular solution contained in art 116(2) of the Grundgesetz are adequately stated by the Constitutional Court in their 1968 decision, and in the commissioners' finding. It is clear that the Federal legislature did not recognise the National Socialist decree, but sought to deal with a difficult practical problem on humane and reasonable lines which left persons in the position of the appellant outside German nationality unless and until they applied to receive it. The position would have been the reverse had Mr Oppenheimer gone to live in Germany. In that case the law of the Federal Republic would have presumed that he wished to be recognised as a national554 ab initio unless he unequivocally expressed a wish to the contrary. What would have been the decision in English law had the point fallen to be decided at a point of time before the Grundgesetz came into operation or if the Constitutional Court had reached a different conclusion in 1968, is, perhaps fortunately for us, academic. The arguments for and against are set out in the article^f in the Law Quarterly Review which led directly or indirectly, to the remission of the case to the commissioners. I would prefer to express no concluded opinion on it. But I do point out, with the author of the article above referred to, that only in a relatively small proportion of cases is the possession of dual nationality an advantage to the possessor. There would seem small value in adding hardship to injustice in order to emphasise the cruel nature of the injustice. I quite see the force of the argument contained in the opinions of my noble and learned friends Lord Cross and Lord Salmon to the effect that the validity of a law cannot depend on its effects on individuals. But with due respect to that argument, foreign municipal law is not a question of law but of fact, and the only way known to English law of disregarding an unpleasant fact is to create the legal fiction that it does not exist. I do not think that such fictions always serve a useful purpose, and where they do, among the criteria would certainly be included the effect of the proposed fiction on individuals but not, I venture to think, the distasteful nature of the facts. It may well be that English law will not give a single and unequivocal answer to the problems raised by the unjust and discriminatory legislation of a foreign country. (See for instance Aksionairnoye Obschestvo A M Luther Co v James Sagor & Co; Princess Olga Paley v Weisz; and cf also Frankfurther v W L Exner Ltd and Novello & Co Ltd v Hinrichsen Edition Ltd.) American law appears to have fallen short of rejecting the National Socialist decree, at least when the consequences of doing so would have been the internment of the propositus. (See United States of America, ex rel Schwarzkopf v Uhl.) The fact remains that, for the purposes of the case before us, the National Socialist decree falls to the ground, the Constitutional Court of the Federal Republic having declared, it, for the purposes of the municipal law as from the first 'unrecht' and not law, and we cannot do other than hold that it was invalid.

   The remaining judgment in the Court of Appeal was that of Lord Denning MR ([1972] 3 All ER at 111, [1973] Ch at 271), who based his reasoning on the effect in English law of the application of Mr Oppenheimer for British naturalisation in 1948. With great respect to Lord Denning MR I do not find this reasoning convincing. It proceeds on the basis, which is contrary to Stoeck v Public Trustee, that English law can decide who is and who is not a German national, and appears to assume that the coexistence of British and enemy alien nationality is an impossibility. But this is not so (cf Kramer v Attorney General). Quite apart from this I find it impossible to apply the doctrine of election or renunciation which is appropriate enough in the law of contract to questions of national status in the absence of a statute to that effect and, even if I were able to do so, I would not be prepared to decide this case on the basis of any election either by Mr Oppenheimer or the Crown unless the conduct relied on as establishing election were absolutely unequivocal; and I am not persuaded that in 1948 either the Crown or Mr Oppenheimer were fully aware that Mr Oppenheimer had any surviving rights in his nationality of origin which he could select to renounce.

555

   The commissioners have found that if they were wrong about their decision on the National Socialist decree, Mr Oppenheimer would nevertheless have lost his nationality under German law by virtue of the so-called Delbruck law of 1913 when he applied for British naturalisation in 1948. The Crown indicated that, if it were necessary, they would seek to support this finding of fact. We did not hear the Crown fully on this. But I would wish expressly to reserve any opinion on this point, Not only is it difficult to reconcile this position with the 1958 decision of the Constitutional Court, but one seems to enter a strange looking-glass world if one were compelled to hold that Mr Oppenheimer lost a nationality which no one at the time believed he possessed, and which he himself almost certainly did not then wish to retain, simply because he did not ask permission to retain it from authorities who did not then exist, and who, if they had existed, would almost certainly have refused the application on the ground that they had no jurisdiction to grant it.
   In my view the appeal fails on the ground that I have stated. The supplementary case establishes that in the assessment years Mr Oppenheimer is not to be regarded as a German national.
   I turn now to the second appeal, that of Nothman v Cooper. In this case also I agree with the opinion expressed by my noble and learned friend, Lord Cross of Chelsea, and it follows that in my opinion this appeal must be dismissed. Miss Nothman conducted her own appeal with conspicuous courtesy and ability. She accepted expressly that on the principal matter of contention her case stood or fell with the appeal of Mr Oppenheimer. By leave of your Lordships she also raised a number of other points which she had argued below, but had disclaimed hitherto as matters she desired to place before the House of Lords. These points are (1) that the 'pension' she received was not income, but a payment by way of compensation for a frustrated career, and so not assessable to British tax even if her sole nationality were British; (2) that the payments were purely voluntary and therefore in the nature of gifts, and (3) that the source of income was not a foreign possession within the meaning of income tax law as defined in Colquhoun v Brooks and Foulsham v Pickles. I desire to say nothing about these points except that I agree with the opinions of Lord Cross of Chelsea in this House and of Goulding J ([1972] 2 All ER 529, [1972] Ch 585) and Lord Denning MR ([1972] 3 All ER at 1112) on them.

LORD HODSON. My Lords, for the reasons given by my noble and learned friend, Lord Cross of Chelsea, with which I am in complete agreement, I would dismiss these appeals.
   Since the case has, in the end, been argued on a different basis from that which obtained in the Court of Appeal ([1972] 3 All ER 1106, [1973] Ch 264), it is not strictly necessary to consider the reasons given by the members of that court in connection with the notorious 1941 decree. My noble and learned friend, Lord Pearson, has, however, expressed in the opinion which he has prepared a position which in effect confirms that taken by the majority of the Court of Appeal, expressed by Buckley LJ ([1972] 3 All ER at 1113, [1973] Ch at 273) in the following passage:

   I do not agree that this is a correct view of the relevant international law and as at present advised am of opinion that Lord Cross's approach, consistent with that of556 Dr Martin Wolff in his work on Private International Law^g, is to be preferred. The courts of this country are not in my opinion obliged to shut their eyes to the shocking nature of such legislation as the 1941 decree if and when it falls for consideration.

LORD PEARSON. My Lords, I have had the advantage of reading the opinion prepared by my noble and learned friend, Lord Cross of Chelsea, and I agree that these two appeals should be dismissed for the reasons given by him.
   On the other hand, I am not able to agree with my noble and learned friend as to the conclusion which should have been reached if the relevant German law had consisted, as we thought it did, simply and solely of the 1941 decree and the 1913 law. When a Government, however wicked, has been holding and exercising full and exclusive sovereign power in a foreign country for a number of years, and has been recognised throughout by our Government as the government of that country, and some legislative or executive act of that government, however unjust and discriminatory and unfair, has changed the status of an individual by depriving him of his nationality of that country, he does in my opinion effectively cease to be a national of that country and becomes a stateless person unless and until he has acquired some other nationality (as the appellant Oppenheimer did in this case). Suppose then that the wicked government is overthrown. I do not think it would be right for the courts of this country on their own initiative to disregard that person's change of status, which in fact had occurred and deem that it never had occurred. A decision on that fictitious basis might be no kindness to the person concerned, who might be quite content with his new status and unwilling to have his former status artificially restored to him. The problem of effecting any necessary rectification of the position created by the unjust decree of the wicked government is a problem for the successor government of the foreign country, and we know that in the present case the problem was dealt with by the successor government of West Germany by its Basic Law of 1949. But if the successor government had not dealt with the problem, I do not see that the courts of this country would have had any jurisdiction to restore to the person concerned his lost nationality of the foreign country. There is the rule of public policy that our courts may refuse to recognise in war time a change of nationality of an enemy alien, but that rule would cease to apply at the end of the war, which would be at latest when the war was officially declared to be at an end.
   I would dismiss the appeals.

LORD CROSS OF CHELSEA. My Lords, the question at issue in the appeal Oppenheimer v Cattermole is whether the appellant, Mr Oppenheimer, is liable to pay United Kingdom income tax for the tax years 1953-54 to 1967-68 inclusive on certain pension payments which he received during those years from German public funds. Mr Oppenheimer, who is a Jew, was born in Germany in 1896. From 1919 to 1939 he taught at a Jewish orphanage in Bavaria but in 1939, after having been detained for a short time in a concentration camp, he succeeded in leaving Germany and coming to this country where he has lived ever since. On 4 June 1948 he was granted a certificate of naturalisation and became a British subject. As a former employee of a Jewish religious community he has been since 1953 in receipt of a pension payable out of the revenues of the German Federal Republic. Conventions with regard to double taxation relief were made between the United Kingdom and the Federal Republic in 1954 and 1964 and made law in this country by the Double Taxation Relief (Taxes on Income) (Federal Republic of Germany) Orders 1955^h 557and 1967ⁱ. Article IX(1) of the former convention-which Mr Oppenheimer contends is applicable to the first seven assessments in dispute-runs as follows:

Article IX(2) of the Second Convention which Mr Oppenheimer contends is applicable to the other eight assessments is to the same effect. Mr Oppenheimer is, of course, a national of this country and the Crown admits for the purpose of this case that the pensions in question fall within the description in the conventions. The point at issue is whether Mr Oppenheimer was in the years of assessment not only a British subject but also a German national.
   Article II(3) of the 1954 convention states that in the application of its provisions by one of the contracting parties any term not defined therein shall unless the context otherwise requires have the meaning which it has under the laws in force in the territory of that party relating to the taxes which are the subject of the convention. There is a similar provision in the 1967 convention and neither convention contains any definition of the term 'a nation'. Accordingly the question whether Mr Oppenheimer was a German national during the years of assessment has to be determined by English law. But as Russell J pointed out in Stoeck v Public Trustee ([1921] 2 Ch 67 at 82), English law refers the question whether a person is a national of another state to the municipal law of that state-though it may in certain circumstances 'deem' a person to be a national of that state although he is not in fact a national of it. The Special Commissioners to whom Mr Oppenheimer appealed against the assessments made on him by the respondent inspector of taxes heard evidence from Dr Cohn, an expert in German law called by the Crown, and in the light of it found that under German law Mr Oppenheimer ceased to be a German national not later than 4 June 1948 when he became a national of the United Kingdom. At the request of Mr Oppenheimer, the commissioners stated a case for the opinion of the court and in view of the subsequent history of this case, it is important to set out what was the material to which, according to the case stated, Dr Cohn referred them and what was their understanding of the effect of his evidence in relation to it. First they had before them and exhibited to the case parts of a decree made on 25 November 1941 by the National Socialist government providing that a Jew of German nationality who had his usual place of abode abroad when the decree came into force should lose his nationality forthwith. Secondly, they had before them and exhibited to the case part of the German nationality law of 22 July 1913, which provides that a German who has neither his natural residence or permanent abode in Germany loses his nationality on acquiring a foreign nationality unless he had the previous written permission of the appropriate German authority to retain it. Thirdly, the case states that Dr Cohn gave evidence to the following effect:

Two points are to be particularly noted, first, that, whether or not Dr Cohn referred to it in his evidence, the case stated makes no reference to art 116 of the Constitution of the Federal German Republic enacted in 1949 which, as will hereafter appear, is of vital importance in this case and, secondly, that the case stated attributes to Dr Cohn the opinion that in the 1968 decision the Federal German Constitutional Court held that the 1941 decree was ab initio but that nevertheless the decision had no retrospective effect. It is clear from the evidence given by Dr Cohn on a later occasion that the commissioners who signed the original case stated must have misunderstood the evidence which he was giving with regard to the 1968 decision. As a result of the absence from the case of any mention of art 116 and the presence in it of the statement that the 1968 decision had no retrospective effect the case was argued in the High Court ([1972] 2 All ER 529, [1972] Ch 585) and in the Court of Appeal ([1972] 3 All ER 1106, [1973] Ch 264) and on the first occasion before this House on the footing that the only material to be considered in order to decide whether or not Mr Oppenheimer was a German national during the years of assessment was (a) the 1941 decree and (b) the 1913 law. The case came first before Goulding J ([1972] 2 All ER 529, [1972] Ch 585) who reversed the decision of the Special Commissioners. He held first that English law would not recognise the decree of 25 November 1941 as having any effect with regard to Mr Oppenheimer since it purported to alter during wartime the nationality of someone who was then an enemy alien and, secondly, that Mr Oppenheimer had not lost his German nationality by the law of 22 July 1913 since under German law he had already ceased to be a German national before he became a British subject-although our law regarded him still as a German national. The Crown appealed to the Court of Appeal ([1972] 3 All ER 1106, [1973] Ch 264) (Lord Denning MR, Buckley and Orr LJJ) who reversed the decision of Goulding J ([1972] 2 All ER 529, [1972] Ch 585) and restored that of the commissioners. Lord Denning MR held that whatever the position might be under German law English law would not regard an enemy alien who had been naturalised as a British subject during wartime as continuing thereafter to be a national of the enemy country as well as a British subject. Buckley and Orr LJJ based their judgments on a different ground-namely, that although English law would not recognise a change in the status of an enemy alien effected by the alien's domestic law during wartime, that non-recognition only lasted so long as the state of war lasted, and that consequently when the state of war between this country and Germany came to an end, our law would recognise that Mr Oppenheimer had been deprived of his status as a German national by the decree of 25 November 1941. Mr Oppenheimer appealed to this House from the decision of the Court of Appeal and the appellate committee heard arguments from both sides on the basis of the findings as to German law made by the commissioners and set out in the case stated. But before we reported our views to the House we became aware from an article by Dr F A Mann on 'The Present Validity of Nazi Nationality Laws' in the Law Quarterly Review^j that the findings of the commissioners as to the relevant German law were almost certainly based on inadequate material. We therefore put the appeal back into the list for further argument and, as a result of the discussion which then ensued, it became clear-and was accepted by counsel on both sides-that the case ought to be sent back to the commissioners for further findings as to the relevant German law. This House therefore made an order in the following terms. [His Lordship then read the order^k and continued:] Pursuant to this order the Special Commissioners held a meeting on 29 April to 3 May 1974, at which they heard further evidence from Dr Cohn559 and also evidence from Dr Jaques, another expert on German law, who was called on behalf of the appellant. In the course of their evidence the witnesses as well as referring to the 1941 decree and the 1913 law also referred to art 116 of the Basic Law for the Federal Republic of Germany promulgated on 23 May 1949, and to six decisions of various German courts including two decisions-one given in 1958 and the other in 1968-of the Federal Constitutional Court which is the Supreme Court in Germany in relation to the interpretation of the Basic Law-the latter decision being the decision referred to in the original case stated. Translations of art 116 and of the relevant parts of all these decisions were attached to the supplementary case which the commissioners stated in pursuance of the order of the House. This case further contains a full statement of the views expressed by Dr Cohn and Dr Jaques respectively on the legal questions which arise.

   Shortly after the collapse of the Nazi regime in May 1945, the 1941 decree was repealed by Allied Military Government legislation. It is, however, generally accepted by German lawyers that this repeal had no retrospective effect. When the newly established Federal Republic of Germany came to frame its constitution it had to decide what persons were to be its nationals. This was a difficult and delicate question for several different reasons. In the first place-and this, of course, is the aspect of the matter with which we are concerned in this case-it had to decide what to do about those persons who had been deprived of their German nationality by Nazi legislation. On the one hand the new Germany was anxious not to appear to treat the 1941 decree as valid in any way; but on the other hand it had to face the fact that many of those affected by it had made their homes abroad and had no intention of returning to Germany, and that such persons, many of whom had become naturalised in other countries, might well not welcome having German nationality which they thought they had lost thrust on them without their consent. Other problems which the framers of the Basic Law had to face but which are of no relevance in this case were, of course, the status in the Federal Republic of those 'Germans' who had taken refuge there in the later stages of the war and of the 'Germans' in the Soviet Zone of occupation. At this point it will be convenient to refer to art 116 of the Basic Law. It runs as follows:

   It is, of course, with para (2) that we are concerned. Reading the translation simply as a piece of English without the aid of a German lawyer or of German decisions I would have interpreted it as saying that the Nazi legislation must be taken as having effectively deprived those falling within its terms of their German nationality unless they had returned to live in Germany after the war, and had not expressed a wish not to be German nationals. On the other hand, those still abroad could regain the German nationality which they had lost whenever they wished by applying for it to the appropriate authority. Mr Oppenheimer, though he has now made such an application, did not make it until after the years of assessment with which we are concerned.
   Accordingly if the meaning of art 116(2) was what I have suggested-and it appears that for some time after 1949 it was widely thought in Germany that that was its560 true meaning-it would be clear that he was not a German national in the years of assessment. It would also be clear that the 1913 law could have had no application in his case since he would not have been a German national when he was naturalised here. But the 1968 decision of the Federal Constitutional Court shows that it is wrong to interpret art 116(2) as saying-even if only by implication-that the Nazi legislation had deprived anyone of his German nationality. The court in that case had to decide whether someone affected by the 1941 decree who died before the end of the war-ie 8 May 1945-and had not been naturalised in another country died a German national or a stateless person. It held that he died a German national because the 1941 decree was 'to so intolerable a degree irreconcilable with justice that it must be considered to have been void ab initio'. It was common ground between Dr Cohn and Dr Jaques that this decision had retrospective effect and that in the light of it the appellant remained a German national notwithstanding the 1941 decree, at least until he became a British subject in 1948.
   Accordingly the questions to be decided were (1) did he lose his German nationality under the 1913 law when he became a British subject, and (2), if he did not, did he lose it in 1949 by reason of the enactment of art 116 of the Basic Law? Dr Cohn answered both these questions in the affirmative while Dr Jaques answered them in the negative. The commissioners preferred the views of Dr Cohn on both points and since foreign law is a question of fact it might be argued that the view taken by the commissioners was binding on us even if we disagreed with it-unless indeed it was one which we thought no one could reasonably entertain. But in a case of this sort it would, I think, be unfortunate if we were obliged to give effect to a view as to the relevant foreign law which we thought to be wrong and we did in fact hear a full argument from counsel for Mr Oppenheimer in support of the opinion of Dr Jaques. I propose therefore to proceed on the footing that it is open to us to decide the questions at issue for ourselves but for reasons which will hereafter appear I shall assume in favour of Mr Oppenheimer that he did not lose his German nationality on becoming naturalised here in 1948 and confine myself to the question whether he lost it by reason of the enactment of the Basic Law in 1949. The passage in the judgment of the Federal Constitutional Court in the 1968 case which deals with the position of persons affected by the 1941 decree who were alive when the Basic Law took effect ran as follows:

If one looked simply at the language of art 116(2)-in particular at the word 'renaturalised'-the first sentence quoted above might be difficult to justify. But the Federal Constitutional Court supported its interpretation by reference to the views expressed during the preparation of the law by members of the committee of the Parliamentary Council responsible for its wording. The part of the quoted passage which is, of course, particularly relevant for present purposes is the sentence:

The effect of Dr Cohn's evidence was that no distinction could sensibly be drawn between not being treated as a German by the German state and not being a German and that accordingly Mr Oppenheimer, assuming that he was a German national immediately before 23 May 1949, ceased then to be a German national until he either applied to become a German national again or took up residence in Germany. The effect of Dr Jaques's evidence on the other hand was that art 116 of the Basic Law could not be taken to have deprived anyone of his German nationality and that Mr Oppenheimer continued to be a German national after the enactment of the Basic Law although he would not be recognised as such by the German authorities unless he applied to be recognised or took up residence.
   Applying my mind as best I can to the problem of interpreting art 116(2) of the Basic Law in the light of the 1968 decision of the Federal Constitutional Court I prefer-as did the commissioners-the view of Dr Cohn to the view of Dr Jaques. I find the conception of a man being by German law a German national but at the same time not being by German law treated or recognised as a German national very hard to grasp and although it may look at first sight odd that a man who had not lost his German nationality by the 1941 decree should lose it in 1949 under the operation of the Basic Law, this apparent oddity disappears if one bears in mind the conflicting considerations which the framers of the Basic Law had to try to reconcile. On the one hand they were unwilling to admit that the 1941 decree had ever been part of the law of Germany but at the same time they did not wish to thrust German nationality on people who did not want it. As a compromise-if one reads the Basic Law as the Federal Constitutional Court read it-they drew a line at the date of the enactment of the Basic Law. Up to that date people who fell within the scope of the 1941 decree retained their German nationality unless they had given some positive indication that they rejected it; but after the date of the coming into force of the new constitution it was up to the persons concerned to give some positive indication that they wished to be nationals of the new Germany either by living there or by applying for German nationality.
   That Dr Cohn's reading of the 1968 decision is the right one is, I think, confirmed by two decisions of other German Courts dealing with persons affected by the 1941 decree who died after the enactment of the Basic Law. The first (called in argument the 'mental defective' case), was decided by the Berlin District Court in 1971. The question to be decided was whether a German Jew who left Germany in 1933 to settle in this country and died here in 1956 in a psychiatric institution died a German national. He had not been naturalised here and from before the date of the enactment of the Basic Law until the date of his death he had been continuously under mental disability. The court held that as he had never been able to apply his mind to the question whether or not to apply for German nationality under the provisions of art 116(2) he remained clothed with his original German nationality of which the 1941 decree had not deprived him.'Article 116(2)', to quote a passage from the judgment-

It is however implicit in the decision that had the propositus not been mentally incapable on 23 May 1949 he would have lost his German nationality on that date. It might, I suppose, be argued that the conception of a 'possibility of making known their intention' included not only mental capacity but also actual knowledge of the terms of art 116(2) and that no one should lose his German nationality under the562 article until the lapse of a reasonable time for making his application after the date when he became aware of the terms of the article; but such an interpretation might obviously give rise to disputes of fact which would be very hard to resolve and it is not surprising that, so far as the evidence before us goes, it has never been advocated by anyone.
   The other decision (called in argument 'the Hong Kong Dentist' case) was decided by the Berlin District Court in 1968. The 'propositus' in that case was a Jewish dentist who left Germany in 1937 and eventually settled in Hong Kong where he died in 1954. He never became naturalised in any other country and according to Dr Cohn's view of the meaning of the 1968 decision of the Federal Constitutional Court he died a stateless person since he had not applied for German nationality after the enactment of the Basic Law. The District Court held that he died a German national because there was no evidence that he had done anything to show that he wished to renounce his German nationality. But as I read the decision this was not because the court interpreted the 1968 decision of the Federal Constitutional Court differently from Dr Cohn but because it thought that the Constitutional Court had been wrong to draw a line at the date of the enactment of the Basic Law and to say that, whereas up to that date 'persecutees' were German nationals unless they had done something to show that they wished to renounce German nationality, after that date they ceased to be German nationals unless and until they took steps to acquire German nationality. The District Court may have been entitled to take a different view on this point from the Federal Constitutional Court since in the 1968 decision the point at issue was the status of persons within the scope of the 1941 decree who had died before the end of the war and what the court said about those who were alive when the Basic Law was enacted was only an obiter dictum; but I think that we should follow any views expressed by the Constitutional Court on the meaning of the Basic Law even if not part of the ratio decidendi unless they conflict with dicta of the same court in other cases. For these reasons I think that even if one assumes that Mr Oppenheimer did not lose his German nationality when he became naturalised in this country in 1948 he ceased to be a German national from 23 May 1949 until he applied to become a German national after the years of assessment.
   Logically, of course, the question whether Mr Oppenheimer lost his German nationality when he became a British subject in 1948 comes before the question whether he lost it on the coming into force of the Basic Law-for it is common ground that if he ceased to be a German national on naturalisation here in 1948 he did not become one again until he applied under art 116(2) after the years of assessment. At first sight the passage from the 1968 decision quoted above would seem to point conclusively to the view that he did lose his German nationality in 1948 by the operation of the 1913 law. The court after saying that 'the persecutees' had not lost their German citizenship by their expatriation under the 1941 decree went on to say, 'They may of course have lost it for some other reason, especially through acquisition of a foreign nationality'. But against this one has to set what was said by the Federal Constitutional Court itself in a decision in 1958 on which Dr Jaques strongly relied. The propositus there was a German Jew who emigrated to the United States of America in 1934; became naturalised as an American citizen in 1946; later returned to live in Germany and had never evinced any intention not to be a German national. In 1956 the Munich Court of Appeal issued a provisional extradition warrant against him on the request of the Swiss Government in respect of criminal offences of which he was accused but the Federal Constitutional Court quashed the order on the ground that he was a German national. After pointing out that he had not lost his German nationality by the Nazi legislation the court dealt with the effect of his naturalisation in the United States of America as follows:

That case differs, of course, on its facts from this case because the appellant there had returned to live in Germany whereas Mr Oppenheimer has not done so. But though the second reason for their conclusion given in the last sentence of the quoted passage would not apply here the first reason is expressed in general terms which would appear on their face to apply to Mr Oppenheimer's naturalisation as much as to that of the appellant in that case. We did not hear a full argument from counsel for the Crown on this branch of the case and it may be that he would have convinced me that there is no inconsistency between what is said as to the effect of naturalisation in another country before the enactment of the Basic Law in the 1958 and 1968 decisions respectively. But as it is I prefer to leave open the question whether had Mr Oppenheimer died between 4 June 1948 and 23 May 1949 he would have been a German national at the date of his death and to rest my decision on the point that, having survived the enactment of the Basic Law, he ceased thereupon to be a German national until he applied to be one.
   Counsel for Mr Oppenheimer further submitted that even if contrary to his main argument his client was not, after the enactment of the Basic Law, a German national in the fullest sense of the word, the right which he undoubtedly possessed to become a German national whenever he wished placed him in such a special position that English law-which under the tax conventions is the law to be applied-should regard him as having been a German national during the years of assessment. For this he relied on the decision in Weber's case. Weber was born in Germany in 1883. He left that country in 1898 and after living for two or three years in South America came to this country about 1901 and was still living here when the authorities interned him in 1915. He applied for a writ of habeas corpus on the ground that he was not an 'enemy alien' but a 'stateless person'-having lost his German nationality either (a) under German laws of 1870 and 1873 by reason of his continuous residence outside Germany for ten years or more or (b) under s 26 of the 1913 law (already mentioned) on attaining the age of 31 on 30 January 1914-that being the latest date on which he was liable for military service in peace time. The courts were not satisfied that it would be right to regard him as other than an 'enemy alien' since although he might have lost any rights which a German national had against the German state it appeared that he was still under an obligation to serve in the German army in time of war and further that he could claim to be 'renaturalised' as of right if he returned to Germany. I do not think that that case assists Mr Oppenheimer. It is one thing to say that a right to claim German nationality at will constitutes a sufficient link with Germany to justify the authorities in treating a man as an 'enemy alien' at a time when this country is at war with Germany and quite another thing to say that our law ought to treat a man who has such a right as a German national for the purposes of these tax conventions although by German law he is not a German national. For these reasons I be dismissed.

564

   As the members of the Court of Appeal in giving their judgments proceeded-through no fault of their own-on a wholly false view of the German law applicable to this case the reasons which they gave for dismissing the appeal are, strictly speaking, irrelevant. In particular, of course, the shocking character of the 1941 decree on which so much of the argument in the courts below and in the first hearing before us centred ceases to have any bearing on the case when once one appreciates that the problem posed by that decree was tackled by the Federal Republic before the years of assessment in the Basic Law of 1949. But as the judgments below ([1972] 3 All ER 1106, [1973] Ch 264; rvsg [1972] 2 All ER 529, [1972] Ch 585) have been reported and I do not in all respects agree with them I shall state as briefly as I can what conclusion I would have reached if the relevant German law had consisted, as we thought that it did, simply and solely of the 1941 decree and the 1913 law.
   There are four arguments to be considered. The first ran as follows: (A) at the outbreak of the war in 1939 Mr Oppenheimer, who was then undoubtedly a German national resident in this country, became an 'enemy alien'; (B) R v Home Secretary, ex parte L and Lowenthal v Attorney General show that the courts of this country will not recognise a change in the status of an 'enemy alien' effected during the war under the law of the enemy country; and (C) this non-recognition does not end with the war. The first two steps in the argument are plainly right but the third is, I think, wrong. In reaching the conclusion that our courts should continue to refuse recognition to the change of nationality effected by the 1941 decree even after the end of the war because it was a change effected during the war Goulding J was to some extent influenced by the character of the decree ([1972] 2 All ER at 537, [1972] Ch at 595), but the character of the decree has no relevance to this argument. The refusal of our courts to recognise a change in the status of an 'enemy alien' effected during war time is not confined to changes effected by laws passed by the enemy state during the war and may operate to deny recognition to changes effected by legislation of a wholly unobjectionable character. For example, if under a law of the enemy state passed before the war a female national loses her nationality on marrying a national of another in this country and married during the war a national of this or of some third country would be regarded by our courts as remaining an 'enemy alien' even after her marriage so long as the war continued, at all events so far as regards matters connected with the conduct of the war. But there is no reason in sense or logic why our courts should continue to regard her as a national of the former enemy state for any purpose after the end of the war although by the law of that state she is no longer a national of it. I agree with Buckley and Orr LJJ that the doctrine of public policy in question merely suspends recognition during wartime. I would add however that I incline to think that 'during wartime' for this purpose should be interpreted in a common sense way as 'until the end of the fighting'. It appears to have been assumed in the courts below that the relevant date would be not 8 May 1945 but 9 July 1951, when the Government of this country declared that the state of war had ended. The man in the street would have been very surprised to be told in 1950 that we were still at war with Germany; and as at present advised I can see no reason why the suspension of recognition of changes of nationality should be artificially extended in this way. It is not clear from the report of Lowenthal v Attorney General whether the relevant date was 28 April 1944 when the summons under s 18 of the Patents and Designs Acts was issued or some date after 8 May 1945. If the latter was the case I doubt whether the decision was right.
   The second ground on which it was argued that English law should deem Mr Oppenheimer to have remained a German national notwithstanding the 1941 decree565 was that the decree was 'confiscatory'. 'Confiscatory legislation' is a somewhat vague phrase which is sometimes used to cover not only expropriation with no or only inadequate compensation but also compulsory acquisition for full compensation. But it is clear that if foreign legislation on its true construction purports to divest the owner of particular property here of his title to it our courts will not give effect to the transfer even if the foreign legislation provides for full compensation. I cannot see, however, how this rule could have assisted Mr Oppenheimer here. Even if one regards his status as a German national as being a bundle of rights and duties those rights and duties were not themselves locally situate here. The right to claim exemption from United Kingdom tax given to him by the convention if he was a German national at the relevant time was no doubt situate here. In the same way if a testator who died in 1953 had left him a legacy if he was not a German national at the date of his death the right to claim the legacy if he could fulfil the condition would have been a right situate here. If the 1941 decree deprived him of his German nationality in the eyes of English law that no doubt would entail the consequence that his position with regard to rights then existing or subsequently arising in this country which were dependent on his being or not being a German national would have been changed by the decree; but I do not think that the fact that the legislation by which a foreign state deprives a man of his status as one of its nationals can be described as 'confiscatory' necessarily entails the consequence that our law should deem him to remain a citizen of that state for the purpose of deciding whether or not he is entitled to property rights in this country. Suppose, for example, that it was the law of Ruritania that any Ruritanian citizen who was convicted of treason by a Ruritanian court should forfeit all his property wherever situate to the Ruritanian state and should also cease to be a citizen of Ruritania. Our courts would certainly refuse to entertain an action by the Ruritanian state to obtain possession of the traitor's property here; but I can see no sufficient reason why we should continue to regard him as a Ruritanian citizen for the purpose of deciding whether or not he was entitled to property here, his right to which depended on his being or not being a Ruritanian citizen at some point of time.
   The third ground on which it was argued that English law should pay no regard to the 1941 decree was that it was contrary to international law. In his judgment Buckley LJ says ([1972] 3 All ER at 1113, [1973] Ch at 273):

With all respect I cannot agree that that is the law. If a foreign country purported to confer the benefit of its protection on and to exact a duty of allegiance from persons who had no connection or only a very slender connection with it our courts would be entitled to pay no regard to such legislation on the ground that the country in question was acting beyond the bounds of any jurisdiction in matters of nationality which international law would recognise. In this respect I think that our law is the same as that of the United States as stated by the Circuit Court of Appeals United States of America, ex rel Schwarzkopf v Uhl. Schwarzkopf who was then an Austrian national came to the United States in 1936 with the intention of living there permanently. By a decree of 3 July 1938 the German state-which had annexed Austria on 13 March 1938-purported to make him a German citizen and on 9 December 1941 he was arrested by the American authorities as a German citizen under a presidential decree made in view of the imminence of war between the United States and Germany. The court held in reliance on a number of authorities referred to in the judgment that the German decree of 3 July 1938, so far as it purported to impose566 German nationality on persons who at that time had no connection with Germany, must be disregarded by the American courts. It may be said, perhaps, that though international law sets limits to the jurisdiction of sovereign states so far as concerns the granting of nationality it sets no limits whatever to their power to withdraw it. I am not prepared to accept that this is so. I think for example that Martin Wolff^l, may well be right in saying that if a state withdraws its citizenship from some class of its citizens living within its borders to which it has taken a dislike and would be glad to be rid, other states are not obliged to regard such people as 'Stateless'. Counsel for the Crown was prepared to concede that this might be so; but he pointed out that the 1941 decree was only aimed at persons who had already left Germany for good and that emigration was a common and well-recognised ground for the withdrawal of nationality. This is, of course, true, and if the decree had simply provided that all Germans who had left Germany since Hitler's advent to power with the intention of making their homes elsewhere should cease to be German nationals it may be that our courts would have had to recognise it even though many of those concerned were not in truth voluntary emigrants but had been driven from their native land. But the 1941 decree did not deprive all 'emigres' of their status as German nationals. It only deprived Jewish emigres' of their citizenship. Further, as the later paragraphs of the decree show, this discriminatory withdrawal of their rights of citizenship was used as a peg on which to hang a discriminatory confiscation of their property. A judge should, of course, be very slow to refuse to give effect to the legislation of a foreign state in any sphere in which, according to accepted principles of international law, the foreign state has jurisdiction. He may well have an inadequate understanding of the circumstances in which the legislation was passed and his refusal to recognise it may be embarrassing to the branch of the executive which is concerned to maintain friendly relations between this country and the foreign country in question. But I think-as Upjohn J thought (see Re Helbert Wagg & Co Ltd ([1956] Ch 323 at 334))-that it is part of the public policy of this country that our courts should give effect to clearly established rules of international law. Of course on some points it may be by no means clear what the rule of international law is. Whether, for example, legislation of a particular type is contrary to international law because it is 'confiscatory' is a question on which there may well be wide differences of opinion between Communist and capitalist countries. But what we are concerned with here is legislation which takes away without compensation from a section of the citizen body singled out on racial grounds all their property on which the state passing the legislation can lay its hands and, in addition, deprives them of their citizenship. To my mind a law of this sort constitutes so grave an infringement of human rights that the courts of this country ought to refuse to recognise it as a law at all. There are no doubt practical objections to adopting that course with this law, for in many, if not most, cases the persons affected by the 1941 decree would not have wished to remain German nationals. Dr Mann in his article^m quotes several cases in which courts in different countries, while characterising the 1941 decree as 'atrocious' or 'barbarous' have yet given effect to it for this reason. But it surely cannot be right for the question whether the decree should be recognised or not to depend on the circumstances of the particular case. Moreover, in some cases-as for instance where the propositus is dead and what is in issue is the law to be applied to the devolution of his estate-it might be impossible to say which law he would have wished to govern the matter. If one held-as I would have held-that mr Oppenheimer remained a German national in the eyes of our law notwithstanding the 1941 decree the further question would have arisen whether in the eyes of our law he lost his German nationality in 1948 under the law of 1913, although by German law as it567 then was he was not a German national when he was naturalised here. It would not, however, have been necessary for me to form a view of my own on this point since counsel for the Crown was prepared to accept as correct the view expressed by Goulding J in the following words ([1972] 2 All ER at 538, [1972] Ch at 596):

   Finally it is necessary to consider the reason given by Lord Denning MR ([1972] 3 All ER at 1111, [1973] Ch at 271) for allowing the appeal from Goulding J ([1972] 2 All ER 529, [1972] Ch 585). It was, as I understand it, that even if Mr Oppenheimer was a German national by German law in the years of assessment English law, which is the law to be applied in construing the convention, would not regard him as a German national as well as a British subject in view of the circumstances in which he became a British subject. Our law is, of course, familiar with the concept of dual nationality-indeed the relevant part of the tax convention proceeds on the footing that a man may be at one and the same time a British subject and a German national-and the English law which is to be applied in deciding whether or not Mr Oppenheimer was a German national at the relevant time is not simply our municipal law but includes the rule which refers the question whether a man is a German national to the municipal law of Germany. Of course, the fact that our law recognises that a man as well as being a British subject is also a German national does not in the least affect either his rights or his duties as a British subject. Consequently, in time of war between the countries concerned a man with dual nationality may find himself in a very unenviable position. As Viscount Cave pointed out in Kramer v Attorney General ([1923] AC 528 at 532) he may be forced to fight in the British army and yet have his property confiscated under the peace treaty as the property of a German national.
   Lord Denning MR was not, I am sure, intending to deny any of this; but he thought that the particular circumstances in which Mr Oppenheimer became a British subject made it impossible for him thereafter to be considered by our law as having German nationality whatever German law might say on the point. His judgment, as I read it, contains two different reasons for this conclusion-though they are not, if I may say so, very clearly distinguished. The first depended on the character of the 1941 decree. By it-the argument runs-Germany repudiated its obligations to Mr Oppenheimer and he accepted the repudiation by applying for British citizenship, so that even if the 1941 decree were to be declared 'void ab initio' by German law he would be in the eyes of English law precluded from asserting that he had remained a German national. For my part I cannot accept that concepts drawn from the law of contract can be imported in this way into the law of nationality. The second reason was a more general one-namely, that if the Secretary of State grants a certificate of naturalisation to a national of a country with whom this country is then at war English law will deem him to have thereupon lost his previous nationality for good whatever the law of the foreign country may say. If a certificate of naturalisation is granted in peace time Lord Denning MR would, I think, accept that the man in question would in the eyes of English law retain his other nationality if he did so by the law of the other country. But he considered that the conception of an enemy alien being granted a certificate of naturalisation in war time and still remaining thereafter in the eyes of our law under a duty of allegiance to the enemy Sovereign as well as to the Queen of England was an impossible one and that accordingly568 after the grant our law would regard him as having only a single nationality-namely, British nationality-even after the end of the war. I do not myself see any need to draw a distinction between naturalisation in time of peace and naturalisation in time of war. In either case the man in question comes under a duty of allegiance to the Queen which is not affected in any way by the fact-if it be a fact-that by the law of the foreign country in question he remains a national of it.
   In the result, therefore, if the relevant German law had been what we assumed it to be when the appeal was first argued I would have been in favour of allowing it; but in the light of the German law as we now know it I would, as I have said, dismiss it.
   I turn now to consider the appeal Nothman v Cooper. Miss Nothman was born in 1915 in Frankfurt. She went to a grammar school and obtained distinction in mathematics. As she was a Jewess she could not go to Frankfurt University but she took a teacher's training course at a Jewish teachers' training college where she passed an examination in March 1936. During the next three years she held various teaching posts in the dwindling and persecuted Jewish community in Germany and eventually-in April 1939-came to this country. The Crown accepts for the purposes of this appeal that she has become a British subject. Under a law enacted in 1951 by the Federal Government of Germany former public servants who had suffered injury in their careers through the 'Nazi' persecution became entitled to apply for compensation (Wiedergutmachung). Article 31(d)(1) of the law provided that former employees of Jewish communities or public organisations who had or but for the persecutions would have attained a right to retirement benefits against their employers should be entitled from 1 October 1952 onwards to pension payments on the basis of their former salary payments. In 1956 Miss Nothman was awarded as from 1952 a basic monthly compensation under this article. She was assessed to United Kingdom income tax in respect of the payments which she received in the tax years 1953-54 to 1964-65 inclusive on the footing that they were income arising from possessions out of the United Kingdom. She appealed to the Special Commissioners against the assessments arguing (1) that she was a German national in the years in question and therefore exempt from United Kingdom income tax under the tax conventions previously mentioned and (2) that for various reasons the payments which she received were not subject to United Kingdom tax. The commissioners held that she was liable to United Kingdom tax and this decision was upheld both by Goulding J ([1972] 2 All ER 529, [1972] Ch 585) and the Court of Appeal ([1972] 3 All ER 1106, [1973] Ch 264). On her appeal to this House Miss Nothman, who presented her case with ability and courtesy, was prepared on the first point to adopt the arguments which had been submitted by counsel for Mr Oppenheimer; but on the second point she addressed to us-as she had to the court below-several arguments with which it is necessary to deal. In the first place she pointed out that the payments in question were not really pension payments at all but were in truth compensation for having been deprived of the opportunity of following her chosen career. They were therefore in the nature of damages and should not be treated as income payments. But the payments, even if not properly described as 'pension' payments, are not instalments of any ascertained capital sum, and I cannot see any more than could the commissioners or the courts below why they are not received by Miss Nothman as income. Her second contention was that the payments were not assessable to tax because they were 'voluntary payments'. It is, of course, true that she received them because the Federal Republic decided of its own volition to do something towards making good to persons in the position of Miss Nothman the wrong done to them by the Nazi government, and no doubt what the Federal Republic has given it could if it wished take away. But the payments which Miss Nothman receives under the law while it is in force cannot be regarded as a series of voluntary gifts. Then she argued that the payments were not income from a 'foreign possession' but those words mean simply569 income derived from a source outside the United Kingdom and I think that Miss Nothman's rights under the German law in question constitute such a source. Finally Miss Nothman referred us to s 22(1) of the Finance Act 1961 which says:

Unfortunately, however, as Miss Nothman admits, the German authorities have not granted to the payments being made to her any 'specific exemption' from tax-although according to her they ought, consistently with their approach in other cases, to have exempted them.
   In the result, therefore, I think as the courts below thought that the decision of the commissioners in Miss Nothman's case was correct and that her appeal must also be dismissed.

LORD SALMON. My Lords, I am in entire agreement with all the views expressed in the speech of my noble and learned friend Lord Cross of Chelsea. I wish to add only a few observations of my own.
   The original case stated made no mention of art 116(2) of the Basic Law enacted by the Federal German Republic in 1949. Neither your Lordships at the first hearing of this appeal, nor the Court of Appeal ([1972] 3 All ER 1106, [1973] Ch 264), nor Goulding J ([1972] 2 All ER 529, [1972] Ch 585), had any opportunity of considering this vitally important enactment. Accordingly, in the courts below and at the first hearing before your Lordships, the appeal was necessarily conducted on the basis that the principal point for decision was whether or not our courts were bound to recognise the Nazi decree of November 1941 as effective in English law to deprive Mr Oppenheimer of his German nationality. On that basis, I was unhesitatingly in favour of allowing the appeal. The relevant parts of the Nazi decree read as follows:

The expense of transporting large numbers of men, women and children, in all about six million, even without heat, food or sanitary arrangements, must have been considerable. So no doubt was the expense of erecting, equipping and staffing concentration camps and gas chambers for their extermination. Evidently, the Nazis considered it only natural that the confiscated assets of those who had been lucky enough to escape the holocaust should be used to finance it.
   The Crown did not question the shocking nature of the 1941 decree, but argued quite rightly that there was no direct authority compelling our courts to refuse to recognise it. It was further argued that the authorities relating to penal or confiscatory legislation, although not directly in point, supported the view that our courts are bound by established legal principles to recognise the 1941 decree in spite of its nature. The lack of direct authority is hardly surprising. Whilst there are many examples in570 the books of penal or confiscatory legislation which according to our views is unjust the barbarity of much of the Nazi legislation, of which this decree is but an example, is happily unique. I do not consider that any of the principles laid down in any of the existing authorities require our courts to recognise such a decree and I have no doubt that on the grounds of public policy they should refuse to do so.
   I recognise that it is particularly within the province of any state to decide who are and who are not its nationals. If a foreign state deprives one of its nationals of his nationality, as a rule, our courts will follow the foreign law and hold that the man in question shall be treated as not being a national of that foreign state. That principle was restated by Russell J in Stoeck v Public Trustee ([1921] 2 Ch 67 at 82). Russell J recognised, however, that circumstances could arise in which a man might be treated as a national of a foreign state for the purpose of English law although he was not a national of that state according to its own municipal law. I do not suppose that in 1921 it would have been possible for anyone to be sufficiently imaginative or pessimistic to foresee anything like the decree of 1941. But had Russell J been able to do so, he might well have concluded that there could be nothing which could afford a stronger justification for English law treating a man as a German national in spite of the fact that by German law he had lost his German nationality.
   The principle normally applied by our courts in relation to foreign penal or confiscatory legislation was correctly stated by Goulding J ([1972] 2 All ER at 534, [1972] Ch at 592). The comity of nations normally requires our courts to recognise the jurisdiction of a foreign state over all its own nationals and all assets situated within its own territories. Ordinarily, if our courts were to refuse to recognise legislation by a sovereign state relating to assets situated within its own territories or to the status of its own nationals on the ground that the legislation was utterly immoral and unjust, this could obviously embarrass the Crown in its relations with a sovereign state whose independence it recognised and with whom it had and hoped to maintain normal friendly relations. In Aksionairnoye Obschestvo A M Luther v James Sagor & Co, the Soviet Republic by a decree passed in June 1918 declared all mechanical sawmills of a certain capital value and all woodworking establishments belonging to private or limited companies to be the property of the Soviet Republic. In 1919 agents of the Soviet Republic seized the plaintiff's mill in Russia and the stock of wood it contained. In 1920 the Soviet Republic sold a quantity of this stock to the defendants who imported it into England. The plaintiffs claimed a declaration that they were entitled to this stock on the ground that the 1918 decree of confiscation was so immoral and contrary to the principles of justice as recognised by this country that our courts ought not to pay any attention to it. It was held however that as the government of this country had recognised the Soviet Government as the de facto Government of Russia prior to the 1918 decree, neither the decree nor the sale of the wood to the defendants in Russia could be impugned in our courts. The reasons for this decision are illuminating, since they illustrate one of the important differences between the present case and the host of other cases (of which the James Sagor case is an example) in which foreign penal or confiscatory legislation has been considered in our courts. Scrutton LJ said ([1921] 3 KB at 558, 559):

   The alleged immorality of the Soviet Republic's decree of 1918 was different in kind from the Nazi decree of 1941. The latter was without parallel. But even more importantly, England and Russia were not at war in 1918 whilst England was at war with Germany in 1941-a war which, as Goulding J points out, was presented in its later stages as a crusade against the barbarities of the Nazi regime of which the 1941 decree is a typical example. I do not understand how, in these circumstances, it could be regarded as embarrassing to our Government in its relationship with any other sovereign state or contrary to international comity or to any legal principles hitherto enunciated, for our courts to decide that the 1941 decree was so great an offence against human rights that they would have nothing to do with it.
   It is for these reasons that I respectfully disagree with the finding of Buckley LJ, in which Orr LJ concurred, that our courts would have been obliged to recognise the decree of 1941 as effective to deprive Mr Oppenheimer of his German nationality. It has been said that this decree conferred a positive benefit on many of those whom it deprived of their German nationality. This may be so but there is no such finding in the case stated and it is not permissible to travel outside the case to explore these possibilities. In any event, I doubt whether the question whether an enactment is so great an offence against human rights that it ought not to be recognised by any civilised system of law can depend on its impact on the facts of any particular case.
   Mr Oppenheimer was exempt from English income tax in respect of his German pension if, but only if, he had a German as well as an English nationality during the tax years in question. He undoubtedly had no German nationality at the relevant period because of the decree of 1941-if that decree was effective to prevent him from being treated in English law as a German national. As I have, however, already indicated, the decree in my judgment should not be recognised by our courts as having any effect in English law for any purpose. Although this view would have entitled Mr Oppenheimer to succeed on the case as originally stated, it is of no avail to him on the case as now restated.
   The findings in the case, as restated, relating to German law, and in particular to art 116(2) of the Basic Law of 1949, throw an entirely new light on this appeal. It is now clear that during the tax years in question, Mr Oppenheimer's nationality under German municipal law did not in any way depend on the decree of 1941. Indeed, by enacting the Basic Law of 1949, the German Federal Republic cleansed German municipal law of its contamination by the Nazis and did everything possible to rectify the injustice which the Nazi decrees had perpetrated. The German Federal Government were careful, however, not to thrust German nationality on anyone against his will if the decree of 1941 had purported to deprive him of it. The Basic Law accordingly enabled anyone affected by the decree who wished to be a German national to be 'renaturalised' and treated for all purposes as a German national by German municipal law. Such a person had only to apply, at any time, for German nationality and his application would automatically be granted. Alternatively if he returned to and resided in Germany without declaring a wish not to be a German national he would be regarded, in German law, as a German national. If he did neither of these things, it would be assumed that he did not wish to be a German national and his wish would be respected. In such circumstances, German law would treat him as not being a German national-which as the commissioners have found in the restated case would mean that, in German law, he was not a German572 national. Mr Oppenheimer did not return to Germany, nor did he make any application under art 116(2) until after the tax years in question. Had he made any such application at any time between those years and 1949, he would immediately from the date of his application have been regarded by German municipal law as a German national and therefore also treated in English law as a German national. It was not the odious Nazi decree of 1941 but his own failure to apply in time under the benevolent art 116(2) of the Basic Law enacted in 1949 which deprived him of exemption from United Kingdom income tax for the tax years in question.
   My Lords, I would accordingly dismiss Mr Oppenheimer's appeal. I would also, for the reasons given by my noble and learned friend Lord Cross of Chelsea dismiss Miss Nothman's appeal.

Solicitors: Rayner & Co (for Mr Oppenheimer); Solicitor of Inland Revenue.

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