Doctrine of Ultra Vires in Public Law

In a welfare state a government undertakes many ventures for the benefit of the people. This invariably means, powers have to be delegated to sub-ordinate bodies for the smooth functioning and administration of these bodies and ventures, as the Parliament cannot run all these bodies on its own.

As the state’s involvement in public affairs increase, more and more power is devolved and as a consequence the need to regulate and restrict this power too increases. In doing so there is a delicate balance to be preserved. On one hand it has to be ensured that the authorities and bodies do not exceed their powers and thus abuse them and on the other hand they should have the powers which are reasonably required to make them effective in carrying out the purpose of the legislative.

The Courts, which is charged with achieving this difficult balance, carries out its task on the basis of the perceived intention of the Parliament by constructing the relevant statute granting the power to the body or authority. In doing so they read in between the lines or rather write in between lines of the statute, the presumed, implied intention of the Parliament.

This is called the legal construct of the statute or statutory construction. Consequently, most of the Administrative law concepts and doctrines are Judge made law, which have to be read in conjunction with any statute delegating power to a official, body or tribunal.

OBJECTIVES OF ADMINISTRATIVE LAW:

Since the Parliament grants the widest possible power and has little control over how these powers are exercised, the objectives of the administrative law are two fold. On one hand it has to protect the citizens from the abuse of power by Public authorities by exercising them arbitrarily and unfairly and on the other hand it has to compel them to exercise those powers, where they should do so but fail to act.

DOCTRINE OF ULTRA VIRES:

The Doctrine of Ultra vires is produced by the Constitutional principles of the Rule of Law, the Sovereignty of Parliament and the Independence of the Judiciary. This Doctrine can be considered as the central principle in the whole of Administrative Law. In simple terms all what it says is that a public authority cannot act outside its powers and if it does so the act would be treated as null and void in law. Although this sounds simple, the Courts have developed this principle by extending and refining it over a long period of time. In the case of Ashbury Railway Carriage and Iron Co.

Ltd. V. Hector Riche (1875) of the Law Reports 653, the House of Lords considered the validity of a contract entered into by the directors of a company, which did not come within the objects of that company as stated in the Memorandum of Association. It was held that the contract, being of a nature not included in the Memorandum of Association was ultra vires not only of the directors but of the whole company, so that even the subsequent assent of the whole body of shareholders would have no power to ratify it.

The decision could be considered as the source of the doctrine that in construing instruments that confer power what is not permitted should be taken as forbidden. Where an act expressly lays down the limits of empowerment, its application is merely an exercise of construing the statutory language and applying to the facts.

But where it involves exercising discretion on any question delegated, then there is room for abuse and the doctrine of Ultra vires would apply if the discretion had been exercised unreasonably or in bad faith or on no proper evidence. This result is attained by statutory construction, where the Court assumes that Parliament did not authorize abuse and that certain safeguards against abuse must be implied in the statute. The Courts have extended the judicial control of power by stretching the Doctrine of Ultra Vires.

Since they realize that their primary purpose is to protect the citizens against unfairness and abuse of power, they have built up a body of rules including principles of natural justice and error of law or fact on the face of the record, into the doctrine of Ultra Virus. Nevertheless, the Court also realizes that for the proper functioning of these public bodies, powers that are reasonably within their purview for the attaining of the objectives of the Parliament’s intention in promulgating the statute should not be deprived to them by the application of the Ultra Vires doctrine.

This has been aptly pointed out by Keith Davis in relation to Local Authorities as follows: “If the application (of the doctrine of ultra vires) becomes too lax Local Authorities will enjoy a greater power than the Parliament intended they should have and if it was relaxed altogether their freedom of action would become absolute and their exercise of power would be quite arbitrary….

If on the other hand the application becomes too strict, local authorities will enjoy a narrower power than what the Parliament intended they should have; and ultimately they would exercise no independent power at all. Then Local Government would be transformed into Local Arm of Central Government administration, if it did not wither away completely.” To achieve the required balance, the Courts have developed certain rules which is called by some authors as the “Necessarily Incidentals Doctrine”.

NECESSARILY INCIDENTALS DOCTRINE:

The Interpretation Ordinance provides some guidelines of these rules. Section 4 of the ordinance provides “Where any enactment or written law, whether passed or made before or after the commencement of this Ordinance, confers a power or imposes a duty, then, unless a contrary intention appears, the power may be exercised and the duty shall be performed from time to time as occasion requires.” Section 14(f) provides “for the purpose of conferring power to dismiss, suspend, or re-instate any officer, it shall be deemed to have been and to be sufficient to confer power to appoint him.”

This position was judicially accepted in the cases of Yakkaduwe Sri Pargnarama Thero v. Minister of Education (1969) 71 NLR 506 and Siriwardene v. Fernanado (1973) 77 NLR 469 where it was held that the Minister of Education and Commissioner of Co-operative Development respectively had acted intra vires when they removed from office persons whom they themselves had previously appointed to the posts.

Section 18 of the Interpretation Ordinance provides “Where any enactment, whether passed before or after the commencement of this Ordinance, confers power on any authority to issue any proclamation, or make any order or notification, any proclamation, order, or notification so issued or made may be at any time amended, varied, rescinded, or revoked by the same authority and in the same manner, and subject to the like consent and conditions, if any, by or in which or subject to which such proclamation, order, or notification may be issued or made.”

This position too was judicially accepted in the case of James Perera v. Government Agent Kandy (1945) 46 NLR 287 where the cancellation of notification fixing dates for nominations and elections and publication of a fresh notice fixing new dates was upheld. The obiter of Lord Radcliffe in the case of Queen v. Mapitigama Buddharakkita Thera (1962) 63 NLR 433,484 is also relevant at this point.

He said “ to be ‘express provision’ with regard to something it is not necessary that that thing should be specially mentioned; it is sufficient that it is directly covered by the language however broad the language may be which covers it so long as the applicability arises directly from the language used and not by inference there from.” This dictum was cited and applied in the case of Ratnasiri Perera v.

Dissanayake, Assistant Commissioner of Co-operative Development (1992) 1 SLR 286. The first time the strict doctrine of Ultra vires was tempered by the House of Lords was in 1880, in an application for a perpetual injunction with regard to a contract entered (in this instance) by a company incorporated by statute. That is the case of Attorney General v. The Great Eastern Railway Co. (1880) 5 Appeal Cases 473. Here, the House of Lords approved the doctrine of ultra vires with some refinement that lend it a greater flexibility.

The Lord Chancellor (Lord Selborne) restated the doctrine as follows, “I assume that your Lordships will not now recede from anything that was determined in The Ashbury Railway Company vs. Riche; It appears to me to be important that the doctrine of ultra vires, as it was explained in that case, should be maintained.

But I agree with Lord Justice James that this doctrine ought to be reasonably, and not unreasonably, understood and applied, and that whatever may fairly be regarded as incidental to, or consequential upon, those things which the Legislature has authorized, ought not (unless expressly prohibited) to be held, by judicial construction, to be ultra vires.”

In the case of Public Officals too a similar approach has been taken by the courts. In the case of Palasamy Nadar v, Lanktree (1949) 51 NLR 520 Gratiaen J said “Where power to do an act is conferred by statute, it carries with it an implied power to do whatever may fairly and reasonably be regarded as incidental to the exercise of that power.

Therefore I hold that the power of seizure conferred by section 123 includes the power, for the purposes of examination, to detain for a reasonable period any goods, which a Customs officer suspects to be liable to be as forfeited goods. Any other construction would only lead to precipitate action in respect of goods where no offence against the Customs laws may have been committed.”

The treatment of Public Bodies conferred with power by the statutes too had been no different. In the case of Liyanage and others v. Gampaha Urban Council and others (1991) 1 SLR 1, S.N. Silva J said “Anything purported to be done, by the Council, in excess of what is permitted by the statutory provisions will be considered as wholly invalid in law, on the application of the doctrine of ultra vires.

However, in construing the relevant statutory provisions the Court will bear in mind the need to promote the general legislative purpose underlying these provisions and consider whether the impugned act is incidental to or consequential upon the express provisions. If it is so considered necessary, the impugned act will not be declared ultra vires. It has now to be considered whether the impugned act in this case could be taken as incidental to or consequential upon the express provisions of the Ordinance on the basis stated above.”

Another Sri Lankan case where the implied rights in statutory provisions were recognized is the case of De Saram v. Panditharatne (1984) 2 SLR 106. In terms of section 34(6) of the Universities Act no 16 of 1978 ‘The Vice-Chancellor shall be responsible for maintenance of discipline within a University.’

Here the question arose as to whether the Vice-Chancellor has the power to suspend a student pending an inquiry against him. It was argued that a student could be prevented only under Section 131 (1) of the Universities Act from entering the campus.

Rejecting this argument T D G de Alwis J. noted that “ There is no limitation placed on the manner in which he is to maintain discipline, or how the power is to be exercised.” and held that “where a person is responsible for the maintenance of discipline in a particular institution suspension pending inquiry would be an inherent or implied right flowing from such responsibility.” Prof. G.L. Peiris, in his book ‘Essays on Administrative Law in Sri Lanka, on page 358 states as follows:

“Where, however, an official or Body is given authority in an enabling statute to make sub-ordinate laws in regard to the X category of matters, but it is demonstrable that the delegated law making power cannot be effectively exercised in regard to X without regulating or making provisions for matters falling within the scope of category Y, it may be held in appropriate cases that implied law making powers has been conferred in respect of category Y as well.

This is a matter of construction of the relevant statute. The outcome depends on the interrelation between X and Y, in terms of objectives, content and scope.”

CRITICAL ANALYSIS:

Having seen the rational behind the ultra vires doctrine and the rules developed by Courts to temper this doctrine, it should be understood that there is always a thin line separating what is incidental or consequential to a certain power already granted and what is clearly ultra vires and as a result there is a lot of subjectivity involved in deciding what is ultra vires and what is not.

To understand this better let us look at the leading case of Anisminic Ltd v Foreign Compensation Commission (1968) APP. L.R. 12/17. Here, the issue revolved around the interpretation of Article 4 of the Order in Council titled ‘Foreign Compensation (Egypt) (Determination and Registration of Claims) order S.I 1962 No 2187, and the determination was given by Five Lords namely Lord Reid, Lord Morris of Borth-y-Gest, Lord Pearce, Lord Wilberforce and Lord Pearson.

All five Lords gave separate judgments and the issue was decided on the basis of 3 to 2, thus the majority judgment being applicable. Until this case, where an error was committed by any tribunal within its jurisdiction whether in fact or in law it was not considered under the doctrine of ultra vires but the Court exercised its power to review on the basis of ‘error on the face of the record’.

All five Lords agreed that the Commissioner erred in interpreting the Article 4 but Lord Morris of Borth-y-Gest and Lord Pearson who gave the minority judgment held that interpreting the Articles of a Order in Council is necessarily incidental to the functioning of the Commission and therefore if the Commissioner has the power to interpret the Articles right he has the power to interpret it wrong as well and he is within his jurisdiction.

Accordingly, in view of the ouster clause in the Order they rejected the appeal. The other three judges held that the interpretation of Acts and Orders in Council was the purview of the Courts and the Commission had no jurisdiction to interpret the Article wrongly. In that case, they said the error destroyed the jurisdiction of the Commission and made its decision Ultra Vires.

What is interesting here is that while two Lords held that interpreting the order is within the incidental powers of the Commission, the other three held that it was not. This illustrates the point made earlier about subjectivity in these decisions and the thin demarcating line. It is a generally accepted rule that for an action which is not specifically authorized by a statute to declared an intra vires act it should be necessary and incidental or consequential to the acts authorized.

Just because a particular act is desirable or will benefit the body carrying it out ,is not sufficient grounds for such declaration. In the case of Clapp v. Jaffrey 97 N.H. 456 (1952) the question was whether it is lawful for the town to rent equipment to or perform services for private individuals on their property. It was held that if the prices charged are sufficient to cover the cost so that no burden falls on taxpayers, such actions are lawful.

This decision was arrived at assuming that such actions are subordinate and incidental to town needs. In this case too Kenison C.J. dissented from this judgment. This can be contrasted with the case of Attorney General v. Fulham Corporation (1921) 1 ch 440. Here the corporation had a statutory power to provide washhouses for residents to wash their own clothes.

Fulham set up a laundry service where customer may walk in do their laundry for a fee. This was held to be Ultra Vires. Similarly in the case of Hazell and Others v. Hammersmith and Fulham London Borough Council[1991] 2 W.L.R. 372. substantial transactions of a speculative nature were conducted through a capital market fund in the name of the council and for this purpose it borrowed money from several Banks.

The question was whether these were ultra vires transactions. It was held that there was no express statutory power entitling the council to enter into financial transactions although it had an implied power under section 111 of the Local Government Act 1972 to do anything which was ancillary to the discharge of any of its functions, which included borrowing; but that, having regard to the provisions and limitations of theAct of 1972, in particular Part I of Schedule.

13 thereto, regulating that function and assuming that the transactions were undertaken with a view to making a profit it could not be said that the transactions were calculated to facilitate, or were conducive or incidental to the discharge of, the council's function of borrowing within the meaning of section 111, and, therefore, the transactions were ultra vires and unlawful. What has to be noted here is that had the Council/Courts taken the position that the transactions were undertaken as part of the proper management of the council's funds then they would have been intra vires.

Bibliography:

  • Administrative Law, Block 1 (2004) Open University of Sri Lanka, Nawala.
  • Sir William Wade and Christopher Forsyth, Administrative Law (1994), Clarendon Press, Oxford. Peiris G.L., Essays on Administrative Law in Sri Lanka (2005), Stamford Lake (Pvt.) Ltd, Pannipitiya, Sri Lanka.
  • Cooray Sunil F.A., Principles of Administrative Law in Sri Lanka (2001), Sunil F.A. Cooray Jaela, Sri Lanka Judicial Review © Corbett Haselgrove-Spurin 2004.
  • Bandaranayake Shirani A., Developments in the Role of the Doctrine of Ultra Vires in the Central – Local Relations: an Analysis, Sri Lanka J.S.S, 1985.