P ART 3: J UDICIAL R EVIEW , U LTRA V IRES AND N ATURAL
11.3 The Limits of Statutory Powers
The law prescribes various rules or tests for the limits of substantive powers. In general, these rules are applicable according to whether or not the powers are discretionary and whether matters of fact or law are in issue. However, before these rules are examined, it must be re-emphasised very strongly that merely because the reviewing court considers a decision to be wrong on the merits, ie matters within the limits of statutory powers, does not render it ultra vires. The law recognises here that an administrative agency should have some opportu- nity to exercise its expert skill or judgment in particular cases. Hypothetically, a furnished rent tribunal might have the power ‘... to determine disputes between landlord and tenant in respect of the payment of rent for furnished premises’. If the tribunal is to avoid an ultra vires decision it would probably have to decide correctly at the outset and to the satisfaction of a reviewing court that a case referred to it involved what is in fact a dispute on what in law is a rent payment as between parties who are in law landlord and tenant concerning premises which are, as a fact, furnished premises (R v Fulham, Hammersmith and Kensington Rent Tribunal, ex p Zerek (1951)). Thereafter, any expert conclusions arrived at by the tribunal about the physical condition of the premises and that, for example, the rent should be reduced by 10% in recognition of those condi- tions is a decision on the merits of the case and therefore generally beyond review for ultra vires. However, if Parliament had prescribed an appeal from the tribunal’s decisions, the appeal court or tribunal would be able to re-examine the merits of the tribunal’s decision in order to substitute its own decision, eg by reducing the rent by 20%. Accordingly, there is a fundamental distinction between review, which is concerned to ascertain whether a decision should be quashed or declared a nullity as being in excess or abuse of statutory limits, and appeal.
The need for any administrative tribunal or agency to determine correctly the limits of its powers is well illustrated in R v Blackpool Rent Tribunal, ex p Ashton (1948), where the tribunal had statutory responsibility for determining disputes in relation to furnished premises. The tenancy of a flat was referred to the tribunal where the flat contained a clock, curtains in two rooms, a gas cooker and a water heater. The court quashed the tribunal’s decision: the first two items were regarded by the court as being de minimis while the other items were not ‘furniture’. The fact that certain matters have nothing to do with the limits of statutory powers but relate entirely to the merits of a case, to be
weighed and dealt with entirely by the agency itself, is seen in Dowty, Boulton Paul Ltd v Wolverhampton Corporation (No 2) (1973). The corporation decided to discontinue the provision of its municipal airport by virtue of the powers in s 163 of the Local Government Act 1933 which stipulated that ‘... a council may appropriate for any purpose for which the council are authorised ... to acquire land ... any land which belongs to the council and is no longer required for the purpose for which it is held immediately before the appropriation’. It was found by the court that a decision of the corporation under these powers by which the land’s use could be discontinued in order to permit the building of houses was entirely a matter within their powers, that is, a matter for their judgment on the merits of the competing claims to the land. Even if the court sympathised with the merits of the airport user’s claim, this could not have rendered the corpora- tion’s decision ultra vires.
The fundamental distinction between on the one hand, the merits of an administrative decision, which is not a matter which is appropriate for the supervisory jurisdiction of the courts, and on the other, the legality of that same decision which is, was highlighted in Save Britain’s Heritage v Secretary of State for the Environment(1991) referred to in Chapters 3 and 9. The developers’ propos- als to demolish listed and unlisted buildings in a conservation area and build in their place a modern building designed by a leading architect had aroused much public controversy. Indeed, the local planning authority, English Heritage and non-statutory organisations such as Save Britain’s Heritage were all opposed to the scheme. However, the House of Lords made it abundantly clear that aesthetic judgments were for the Secretary of State to make, not the court.
Accordingly, the issue for the court was whether or not the Secretary of State had complied with the statutory requirement to give reasons for his decision to approve the scheme. Lord Bridge, echoing earlier judicial sentiments, stated that the concern of the court in the context of judicial review proceedings ‘is solely with the legality of the decision-making process, not at all with the merits of the decision’.
11.3.1 Defining the limits
The task of identifying the limits of powers depends on the definition of matters of fact and/or law which are considered to be fundamental to the powers of any administrative agency. If such matters of fact and/or law are considered by the court to be fundamental, this is an indication of Parliament’s supposed inten- tions in relation to the limits of an administrative agency’s powers. In R v Hillingdon London Borough Council, ex p Puhlhofer(1986), for example, the House of Lords emphasised that under the Housing (Homeless Persons) Act 1977 the local authority was obliged only to provide ‘accommodation’. This fundamental requirement was not qualified by any requirement that the accommodation was fit for human habitation, for example, any failing in the quality of the accommo- dation would not be capable of rendering action ultra vires. The legislation has
INTRODUCTION TOADMINISTRATIVELAW
now been amended by the Housing and Planning Act 1986 which stipulates that a person shall not be treated as having accommodation unless it is accommoda- tion which it would be reasonable for him to continue to occupy. Failure to interpret correctly a legal requirement which is fundamental to the limits of powers renders a decision ultra vires. Equally, failure to find evidence for a mat- ter of fundamental fact is a prerequisite for an ultra vires decision (Coleen Properties Ltd v Minister of Housing and Local Government(1971)).
11.3.2 Fundamental matters of law
In Padfield v Minister of Agriculture(1968) the House of Lords dealt with the min- ister’s refusal to refer a complaint about differentials in milk prices paid by the Milk Marketing Board to farmers in different regions of the country to a com- mittee of investigation under s 19 of the Agricultural Marketing Act 1958.
Section 19 stipulated that the minister shall appoint a committee of investigation which ‘shall ... be charged with the duty, if the minister in any case so directs, of considering and reporting to the minister on ... any complaint made to the min- ister’. It was decided by the House of Lords that the minister had misconstrued the legal requirements of the Act which indicated that he was obliged to refer the complaint made if the objects and intentions of the legislation were to be realised. Although the minister had a discretion, there was a fundamental legal requirement that complaints be referred to a committee in order to provide pro- tection for those affected by milk marketing schemes. In Pearlman v Keepers and Governors of Harrow School (1978) the court quashed the decision of a county court in respect of a determination relating to the rateable value of a dwelling for the purposes of the Leasehold Reform Act. Under the Act certain require- ments have to be satisfied before a long leaseholder can purchase the freehold of his property, one of which is a rateable value limit. Normally, any improvement or alteration to a property would have the effect of pushing up the rateable value beyond the limit so that the long leaseholder would no longer qualify for a purchase of the freehold. Accordingly, it is provided by the Act that in some circumstances such as where there is a ‘structural alteration’ to property, the rateable value should be subject to a notional reduction. Any long leaseholder is permitted by the Act to apply to a county court for a determination whether cer- tain improvements amount to a ‘structural alteration’: any such determination is stated to be ‘final and conclusive’. In this case the county court decided that the installation of central heating was not a ‘structural alteration’, a decision which was quashed by the Court of Appeal as being an ultra vires, fundamental error of law.
11.3.3 Inferior courts
The House of Lords in Re Racal Communications Ltd(1980) concluded that there is something akin to a presumption that errors of law by inferior courts like the
county court are not generally fundamental, primarily by reference to the need to recognise the expertise of the judges in those courts. Consequently, decisions of inferior courts affected by errors of law will usually be, at most, voidable decisions (legally effective decisions unless quashed by the court) by virtue of there being a less than fundamental error of law on the face of the record of the decision. This concept is examined below. It will be noted that the principle in Re Racal Communications Ltd applies to inferior courts as opposed to other administrative agencies, including tribunals, where the House of Lords’ deci- sion in Anisminic Ltd v Foreign Compensation Commission(1969) remains the lead- ing authority.
11.3.4 Administrative agencies
In Anisminic the British government received from the Egyptian government a sum of money in respect of outstanding claims following the sequestration of British property in Egypt. By virtue of the Foreign Compensation Act 1950, it has been seen that the Foreign Compensation Commission has statutory respon- sibility for the determination of claims made in respect of the money received from any foreign government. A claim would be ‘established’ according to an Order in Council if certain requirements were met, one of which was that a claimant had to be British. In rejecting Anisminic’s claim the Commission found that the company, although British, had not satisfied another requirement, ie that a claimant’s successor in title should also have been British. It was found that the Commission had misinterpreted the Order in Council defining the lim- its of its powers. The Commission had made a fundamental error of law by tak- ing into account the need for a claimant to prove that a successor in title was also British, something that amounted to an additional requirement which had not been specified in the Order in Council. Despite the words of s 4(4) of the Foreign Compensation Act to the effect that any decision on an application made to the Commission ‘shall not be called in question’ in any court of law, the House of Lords was willing to grant a declaration that the Commission’s deci- sion was ultra vires. Lord Pearce emphasised that it is possible to exceed or abuse statutory powers in various ways:
There may be an absence of those formalities or things which are conditions precedent to the tribunal having any jurisdiction to embark on an inquiry. Or the tribunal may at the end make an order that it has no jurisdiction to make.
Or in the intervening stage, while engaged in a property inquiry, the tribunal may depart from the rules of natural justice; or it may ask itself the wrong questions; or it may take into account matters which it was not directed to take into account. Thereby it would step outside its jurisdiction. It would turn its inquiry into something not directed by Parliament and fail to make the inquiry which Parliament did direct. Any of these things would cause its purported decision to be a nullity.
INTRODUCTION TOADMINISTRATIVELAW
The decisions in Anisminic and Re Racal Communications Ltd indicate that virtu- ally any error of law committed by an administrative agency such as a local authority or an administrative tribunal will be regarded by the High Court as a fundamental error of law rendering any resulting decision or other administra- tive action ultra vires. The accuracy of this view has recently been confirmed by the House of Lords in R v Hull University Visitor, ex p Page (1993) where Lord Browne-Wilkinson in the leading judgment observed that ‘... Parliament had only conferred the decision-making power on the basis that it was to be exer- cised on the correct legal basis: a misdirection in law in making the decision therefore rendered the decision ultra vires’. In Pearlman, Lord Denning and the majority of the court considered that such a principle should extend to all administrative agencies and inferior courts. Lord Denning stated that: ‘No court or tribunal has any jurisdiction to make an error of law on which the decision of a case depends. If it makes such an error, it goes outside its jurisdiction.’ In his important dissenting judgment, which was subsequently approved by the House of Lords in Re Racal Communications Ltd, Geoffrey Lane LJ considered that the inferior court should have some leeway in which to make wrong deter- minations of law without any eventual decision being regarded as ultra vires.
Clearly, expert judges are capable of arriving at differing views of the law on many occasions. Although the High Court may consider a county court judge’s interpretation of the law to be wrong in a particular case, that does not necessar- ily mean that it is so wrong as to offend the fundamental limits of powers pre- scribed by Parliament in order to render a decision ultra vires.