LIMITATIONS ON THE CONTRACTUAL LIABILITY OF PUBLIC AUTHORITIES
| DOI | http://doi.org/10.1111/j.1468-2230.1950.tb00170.x |
| Published date | 01 July 1950 |
| Author | J. D. B. Mitchell |
| Date | 01 July 1950 |
LIMITATIONS
ON
THE
CONTRACTUAL
LIARILITI'
OF
P'C~B1,IC
AIJTI-IORXTIES
I
THERE
may seem to be little profit to be gained from an attempted
re-examination of the alleged limitations on,
or
special privilcges
of, public authorities, and in particular the Crown, in relation to
their contracts. Many of the rules have long since been regarded
as settled law, such as the inherent right
of
the Crown to dismiss
its servants at pleasure,'
so
that a challenge appears futile, and
others, such as the supposed principlc of
Churchward
v.
The
Queen,'
seem of slight importance since they have been
so
rarely
invoked in this country, though it is true that they have been more
widely discussed in the Dominions.J Nevertheless, the re-examina-
tion seems justified
in
view of the present increase in the scope
of the activities
of
public authorities both in the strict field
of
government and also in nationalised industries and public boards,
particularly when regard is had to the uncertainty surrounding
some
of
the suggested limitations as a result of the various and
sometimes conflicting reasons advanced in support of them. Un-
certainty can itself be more harmful than an objcctionable but
clear rule. Added point is also given
by
the revival, in
Robertson
V.
Minister
oj
Pet1sion.9,~
of the claim by the Crown to an unfettered
freedom of executive action, overriding any purported agreements
in
restraint of it. This was a claim upheld in
The
drnphitn'te
but
which since
1931
>tad not again been advanced and could be treated
as
doubtful.6 Moreover it
is
only by determining the precise basis
of some of these special rules relating to the contracti of public
authorities that their probable application to new public corpora-
tions can be gauged.'
The most important, since capablc of the widest application,
of
these special rules is that of
The
Attiphitrite
'
namely that
'
it
[the
Crown] cannot by contract hamper its freedom of action in matters
I
Pee
Robertson. Proceedings
ngnirrrl
Crou,n.
11.
353.
2
(1865)
L.R.
1
Q.B.
173.
J
Siae.
for
cxarnplc,
the
case3
discwsicd
iii
.V.
S.
IV.
v.
Bordolplr
(1935)
52
C.L.R.
455.
4
[1948]
2
1\11
E.R.
767.
3
Rcdrriokticbolaget
Amphitrile
v.
The
King
[lo211
3
X.B.
500.
6
\Vriting
in
1948
Dr.
G.
1,.
Williarns in his
Croux
Proceedings
treated
tlii.1
decision
ax
one
iinlilir:ly
to
be
followcil
and
qualified
thc
riilc
with
the
adjective
7
The
alniirditv
of
some
of
the
siipposed
lraicc
if
riot
their dispronf
is
tlcuioii.
stated
t,?
J)<
D.
\V.
Logan
111
GI
JJ.Q.R,.
'
A
Ci\il Servant
and
his
I'ay
',
:it
'
siupposrrl
'.
p.
240.
31
8
.II’I.Y
1950
LIMITATIONS
ON
CONTRACTIIAI,
IJABILITY
319
which concern the wclfare of the State
’,*
a proposition for which
the learned judge cited no. authority but regarded as established
or
exemplified by the cases involving the right of the Crown
to
dismiss
its servants at pleasure. The facts of that case are suficien’.ly
well known, but it is perhaps worth summarising them. The
owners of
The
Ainphitritr,
a Swedish ship, had before sending her to
England in March,
1918,
obtained from the British Legation at
Stockholm an undertaking that the ship would ‘earn her own
release’ if she carried
a
cargo of at least
60
per
cent. approved
goods. This undertaking was contrary to the normal practice, but
without it is is apparent that the ship would not have sailed for
England. After one voyage on which the undertaking was
honoured a second voyage from Sweden to England was made but
only after an express renewal of the former promise. On this
occasion, however, the British Government refused clearance from
the British port unless arranged through the Swedish Shipping
Committee. The owners had, however, disentitled themselves
from applying to that Committee, the ship having formerly traded
with Germany. Accordingly, the ship was detained and eventually
sold because no release could be obtained despite the undertaking
for the breach of which the owners now petitioned for damages.
The fact that the dispute arose out of war-time conditions is one
which is perhaps worth emphasis, but in view of the terms of the
undertaking the fact that the owners could not apply through the
appropriate committee does not seem material. In rejecting the
claim for damages, Rowlatt
J.
denied that the agreement under
which the ship had been sent to this country was an enforce-
able contract. He reduced it to an expression of ‘intention
to act in a particular way in a certain event’ which could never
be
made binding on the Government.
It
is true that the learned
judge admitted the possibility of the Government binding itself
by
a
‘
commercial
’
contract, a category which
he
did not define.
‘rt
is, however, difficult at first sight to see why such contract should
be outside the general rule which he had propounded, since it is
easy to visualise State commercial transactions, now of everyday
occurrence, which by reason of their size alone could affect the
welfare of the State as much as the agreement before him, and yet
this welfare of the State was apparently the overriding criterion.
He
buttressed his general rule with a discussion of the ability of the
Crown to dismiss its servants at pleasure, despite any term to the
contrary, an ability which he based on the same grounds, the
interest of the community. The further examples given by
Row-
latt
J.
go
so
far that it seems that in his opinion no term on which
a Crown servant is employed could ever be enforced by the servant.
In this it is submitted that he went too far since it will be con-
tended that there
is
no
insuperable obstacle in the way of the
8
Per
Rowlntt
J.
nt
p.
503.
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