Auckland Harbour Board v The King
| Jurisdiction | UK Non-devolved |
| Judgment Date | 1924 |
| Date | 1924 |
| Court | Privy Council |
New Zealand - Constitutional Law - Payment out of Consolidated Fund - Absence of statutory Authority - Right of Crown to recover.
It is a principle of the British Constitution, inherited in the Constitution of New Zealand, that no money can be taken out of the consolidated fund into which the revenues of the State have been paid, except under a distinct authorization by Parliament itself; a payment made without that authority is illegal and ultra vires, and the money, if it can be traced, can be recovered by the Government.
An agreement made in 1913 provided (inter alia) that the Minister of Railways of New Zealand (representing the Crown) should pay to the appellants 7500l. when the appellants granted a lease to B. & Co. The making of the agreement had been authorized by an Act of 1912, which empowered the Minister, without further appropriation, to pay to the appellants out of the Public Works Fund such sum as might be payable in accordance with the agreement. Owing to an alteration in the scheme to which the agreement related, the Minister did not require the appellants to grant the lease, and it was not granted. Nevertheless the 7500l. was paid by the Minister of Railways to the appellants in 1914 out of a vote included in the Public Works Schedule to the Appropriation Act for the year, and the Controller and Auditor-General passed the sum as being so payable:—
Held, that as the lease had not been granted the payment of the 7500l. was not authorized by the Act of 1912, and that it was recoverable by the Government and could be deducted from a larger sum admittedly duo to the appellants.
APPEAL (No. 31 of 1922) from a judgmentF1 of the Supreme Court of New Zealand (November 7, 1922).
The appeal arose out of a petition of right by which the appellants claimed from the Government of New Zealand 7500l., which sum the Government had set off against an equal amount of a larger sum admittedly due by the Government to the appellants.
The facts appear from the judgment of the Judicial Committee, and more fully from the report of the proceedings in the Supreme Court at [
The present appeal was first argued in November, 1922, and was ordered to be reargued.
1923. Nov. 28, 29, 30; Dec. 3. Maugham K.C. and Stamp for the appellants. The Supreme Court decided upon the view that the Minister of Railways had waived a condition in the agreement — namely, the granting of the lease — and that that waiver was ultra vires. There was, however, no waiver of a condition. The granting of the lease and the payment of the money were mutually dependent promises. The question is, was the payment made “in consideration of granting the lease,” as the statute provides. The appellants being ready and willing to grant the lease were in equity in the position of having granted it. The Crown was therefore liable to pay the 7500l. when it was paid; the appellants are not concerned with the question of appropriation. If they are, they rely upon ss. 4 and 5 of the
Clauson K.C., Farwell K.C. and Mousley for the respondents.
The appellants have rightly accepted the burden of showing that the 7500l. was payable when they received it. When a subject receives public money without authority he becomes a debtor to the Crown to that extent: Doddington's Case.F2 Here the statute authorized payment only when the lease was granted, and the lease was not granted. On the true construction of the agreement the Minister had an option to require or not to require that it should be granted. [Reference was also made to Commercial Cable Co. v. Newfoundland GovernmentF3 and Churchward v. The Queen.F4]
Stamp replied.
Dec. 18. The judgment of their Lordships was delivered by
VISCOUNT HALDANE. The question which arises on this appeal is whether the Government had a right to deduct 7500l. from a sum of 25,094l. 5s. 8d. which was admittedly due to the appellants under a claim made under the
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