IMPROPER PRUPOSES

Padfeild

The Milk Marketing Board paid farmers in different regions different amounts for their milk. The Board paid some farmers compensation but the farmers argued it was too low. Farmers asked the Minister of Agriculture to refer the dispute to a committee independent of the Board under his power under s19(3) Agricultural Marketing Act 1958 (“if the Minister [...] so directs, a committee must consider the complaint). The Minister refused to set up the committee due to the political and economic difficulty it would cause if the committee found in favour of C, so C sought review before the House of Lords. 

• C’s application for JR: They applied for a mandatory order directing the Minister to refer the complaint to a committee of investigations to deal with it according to law (i.e. on relevant considerations only, to the exclusion of irrelevant considerations). 

  • Argument #1: The Minister has a duty to refer every genuine and substantial complaint.

  • Argument #2: Alternatively^, the Minister’s discretion is not unfettered and he failed to exercise his discretion according to law because his refusal was caused by having misdirected himself in law or by considering irrelevant considerations.
    
    

D’s argument in defence: D’s only duty is to consider a complaint fairly and is given an unfettered discretion to refer or not to refer complaints to a committee as he sees fit.

Outcome: The Minister’s reason for refusing to appoint a committee shows that he was not exercising his discretion in accordance with the Act’s intentions (it would frustrate its purposes). The case must be remitted to the Queen’s Bench with a direction to require the Minister to consider the complaints.

Interpreting the Act:

• What duty is the Minister under?: The Act imposes a duty on the Minister to refer a complaint whenever there is a “relevant and substantial complaint” that the board has acted contrary to the public interest, which has been alleged in this case.

  • Applied: If the Minister does not refer the complaint, he is “rendering nugatory a safeguard provided by the Act and depriving complainers of a remedy which I am satisfied that Parliament intended them to have”. 

    • The Minister clearly has some duty – he must properly consider the complaint and cannot throw it away unread, “nor was it intended that he could silently thwart its intention by failing to carry out its purposes”. 

    • Parliament attached considerable importance to disputes being resolved through the independent committees, as there was no other method of complaint.
      
      

• What discretion does the Minister have in this duty?: Not an all or nothing case (no discretion or unfettered discretion). The words “if the Minister in any case so directs” are “sufficient to show that he has some discretion but they give no guide as to its nature or extent”.

  • The nature and extent of the discretion (i.e. “the intention of Parliament”) must be “inferred from a construction of the Act read as a whole” (because there is no express answer in the Act). 

    • Rejection of C’s argument #1: The Minister can clearly refuse to refer frivolous concerns to the committee, but this does not mean, per D’s argument, that the discretion is unfettered. 

  • “Parliament must have conferred the discretion with the intention that it should be used to promote the policy and objects of the Act”. The policy of the Act must be determined by construing the Act as a whole, which is a matter for the court. 

  • “If the Minister, by reason of having misconstrued the Act or for any other reason, so uses his discretion as to thwart or run counter to the policy and objects of the Act, then our law would be very defective if the persons aggrieved were not entitled to the protection of the court”. 

Applied: The discretion is not unlimited and has been used by the Minister in a manner contrary to parliamentary intention.

The Council banned Leicester Rugby Club from using a publicly owned practice ground because some players had joined a sporting tour of apartheid South Africa. The Club challenged the lawfulness of the ban.

• Council’s argument: s17 Race Relations Act 1976 put them under a duty to consider the promotion of good race relations (i.e. carry out arrangements with due regard to the need to eliminate unlawful racial discrimination and to promote racial equality).

  • Leicester had a large ethnic minority population.

Outcome (majority): The Council’s decision was lawful.

Dissent – Lord Browne-Wilkinson

Preferred outcome: The Council’s decision to exercise their discretionary powers was unlawful because legally irrelevant matters were considered (i.e. the lawful views of the football club). 

• If the Council’s decision is lawful, “there is a dangerous risk to those fundamental freedoms of the individual” (i.e. of free speech).

  • In the absence of express legislative provision to the contrary, each individual has the right to hold and express his own views.

    • Therefore, Parliament cannot be taken to have implicitly authorised the LA to do acts inconsistent with freedom of speech. 

• General powers cannot in general be lawfully exercised by discriminating against those who refuse to express certain views.

  • The court’s decision cannot “depend on the courts’ opinion of the merits of the views or motives of the public authority”, as otherwise freedom of speech would be a freedom to speak as judges think right. 

Types of unreasonableness leading to unlawful decisions: i) Where the DM takes into account irrelevant matters/fails to consider relevant matters (in issue here). ii) Where the decision is so perverse that no reasonable body could have made it.

R v Lewisham LBC, ex p Shell [1988]

In a report, Lewisham LBC decided to boycott Shell due to its duty under s71 Race Relations Act 1976 because Shell had relations with companies which operated in SA.

Outcome: The decision was unlawful because it was driven by improper purposes.

• Shell’s argument #1 – improper purposes: Two different arguments.

  • a) The main purpose of the decision was to penalise Shell for having trading links with SA and to pressure them to change their policies. 

    • On Wheeler: Although the Council had a wide power to consider the best interests of race relations, it cannot use its powers to punish a body which has done nothing contrary to law nor can it exercise its powers in a way which involves some procedural impropriety.

  • b) Even if it could not be shown that the main or dominant purpose was to penalise Shell, this was certainly a substantial influence on the decision (so this was an improper purpose).

    • Where the court cannot interfere: Where the reasons for a decision are not mixed and can be disentangled and the court is satisfied that even though one reason is bad, the body would have reached the same decision.

    • Where the court can interfere: Where two reasons or purposes cannot be disentangled and one of them is bad, or where even though the purposes can be disentangled but the bad reason “exerted a substantial influence” on the decision.

    • Applied: The purpose of the decision was not merely to promote public opinion but to put pressure on Shell. 

      • This wish was “inextricably mixed up with any wish to improve race relations in the borough and this extraneous and impermissible purpose has the effect of vitiating the decision as a whole”.
        
        

      • Shell’s argument #2 – Wednesbury irrationality: Even if the Council could show it had been motivated only by a desire to improve race relations, the decision was unreasonable.

        • Outcome: Rejected – the Council did not have to adduce evidence to prove there was a body of public opinion in favour of their action. Having regard to the ethnicity of the borough, the Council were entitled to decide this for themselves.

R v Secretary of State for Foreign and Commonwealth Affairs, ex parte World Development Movement [1995]

s1(1) Overseas Development and Co-operation Act 1980 gave the SoS the power “for the purpose of promoting the development or maintaining the economy” of a foreign country, may “furnish any person or body with assistance”. The SoS approved aid and trade provision for Malaysia to build a hydroelectric power station. The government had informally agreed with the Malaysian government that it would contribute, but the Overseas Development Administration considered it would be a “very bad buy”. The SoS went ahead with the project anyway.

• C’s argument: C, a pressure group, thought the SoS was acting unlawfully because the statute conferred no power to make decisions on the basis of political considerations.
  
  

• SoS’ arguments: 

  • i) The word “sound” does not appear in the Act, so it cannot be the case that the project has to be economically sound.

  • ii) The sole purpose for which assistance was furnished was the developmental purpose – the wider political and economic considerations taken into account by the SoS were not purposes but considerations they were entitled to consider.

    • The court accepted that it cannot dispute the weight of competing factors “once there is a purpose within s1 of the Act”. 

iii) If the wider considerations must be regarded as purposes, the existence of subsidiary purposes does not invalidate the decision, provided these subsidiary purposes are not irrelevant considerations

Outcome: The SoS acted for an improper purpose – he did not act for the “purpose of promoting the development” of Malaysia (as this only allowed funds to be allocated towards economically sound projects).

• The SoS is entitled to consider political and economic considerations “had there, in 1991, been a developmental promotion purpose” within s1. However, the SoS’ power to provide financial assistance under s1 was not triggered, so there is no room to take into account other political interests. However, as there was no such purpose, the decision was unlawful. 

  • In this case, there is no “‘professedly’ improper purpose” found in the statute.

On the lack of “sound” in the Act – argument i): If Parliament intended to confer a power to disburse money for unsound developmental purposes, it could have been expected to say so expressly.

R (Palestine Solidarity Campaign Ltd) v Secretary of State for Housing, Communities and Local Government [2020]

The PSC and a member of the Local Government Pension Scheme challenged the lawfulness of guidance issued by the Minister on permissible investments in the scheme. The Minister issued guidance that no investments should be made which are “contrary to UK foreign policy or UK defence policy” (i.e. unless formal legal sanctions had not been put in place). The LA decided they were not going to invest in businesses in the Occupied Territories.

Issue: Did the Minister’s guidance frustrate the objects and policy of the statute in question so as to make the decision unlawful?

Outcome: The guidance went beyond the SoS’ powers, which are to be exercised for the purpose of providing guidance only, not imposing policy (this is an improper purpose, contra Padfield).

• What the court must do, per Padfield: The court must analyse the scope of the power – under Padfield, this involves “construing the words by which it was conferred on him in their context”, from which the court can identify Parliament’s purpose in conferring the power, which determines its scope.

  • Effect of Padfield: A decision is only lawful if it falls within the power conferred on the SoS. Thus, this is an “inquiry into whether the provision is ultra vires”.
    
    

• Applying Padfield: s3(1) Public Service Pensions Act 2013 allows the SoS may make through regulation such provision as they “consider appropriate”. “But the power cannot be as broad as that. No statutory discretion is unfettered”. 

  • “HOW does not include WHAT. Power to direct HOW administrators should approach the making of investment decisions by reference to non-financial considerations does not include power to direct (in this case for entirely extraneous reasons) WHAT investments they should not make”. 

  • The policy of the Act is to identify procedures by which administrators of schemes should adopt in the discharge of their functions through guidance: “the Secretary of State has insinuated into the guidance something entirely different” – it is “an attempt to enforce the government’s foreign and defence policies”.

Lord Carnwath: The dissent misunderstood this by suggesting that Lord Wilson intended to limit the guidance to purely procedural matters. There is

• no reason why the guidance should not extend to the formulation of the investment strategy, but this does not include imposing policy preferences.

• How does the SoS justify the guidance?: 

  • i) Pension contributions to the scheme are funded by the taxpayer, so they are public money. 

    • Held: The employees’ contributions are deducted from their income, so they are not public money.

  • ii) The pension administrators are part of the machinery of the state.

    • Held: “The fact that the authority may for certain purposes be seen as a state agency tells one nothing about the legal powers and constraints under which it operates”, nor does it give the SoS any powers “beyond that express or implicit in the relevant statutory framework.”