LIMITATIONS ON THE CONTRACTUAL LIABILITY OF PUBLIC AUTHORITIES
| Date | 01 October 1950 |
| Published date | 01 October 1950 |
| Author | J. D. B. Mitchell |
| DOI | http://doi.org/10.1111/j.1468-2230.1950.tb00180.x |
LIMITATIONS ON
',L'HE
CONTRACTUAI,
LIARI1,I'l'Y
OF
PIJBLIC AI~TI-IOI1ITIES
(Continued
frgm
p.
339.)
I1
In the first part
of
this article it was suggested that the rule in
The Amphitrite
was better founded than is always admitted but
was
of
narrower application than that case suggests at first sight.
There remains anothcr possible explanation of
The Amphitrite,
namely, that
a
person to whom a discretion has been entrusted
cannot bind himself as to the manner of exercising that discretion
in the' future.u6 Thus broadly stated, the principle would without
further ,limitation effectively prevent any authority from ever enter-
ing into
a
binding long-term arrangement since inevitably the
authority must have at least a discretion whether or not to act, and
any.agreemcnt except in so far
as
it deals with immediate require-
ments must necessarily trench upon that discretion."
It
is,
of
course, possible that this supposed principle is nothing more than
that already discussed cast in
a
different form, namely, that any
govcrnmental authority must always retain the power to act for its
own preservation despite any agreement which it has made. Such
has not, howevcr, at first sight been the construction given
by
the
authorities. Here the authorities are numerous and in the main
concern discretionary powers conferred by statute. The principle
was
described by Lord Birkenhead in
Birkdale District Electricity
Siipplg
CO.
v.
Southport Corporation
99
as
a well-established principle
of
law.
In
that case he set it out in the following words
'
if
a
person
or public body is entrusted by the legislature with certain powers
mid
duties espressly
or
implicitly for public purposes, then those
persons or bodies cannot divest themselves
of
those powers and
duties. They cannot enter into any contract
or
take any action
incompatible with the due exercise of their powers
or
the discharge
u6
Sw
Kcir
k
1,awson.
3111
rd..
11.
316.
9i
The principle
if
rigidly applird
\vould
how
denied validity
to
thr contract
cvcn as between thc origiunl parties in
Smith
v.
Riner
Douglas
Catchment
Board
(119491
2
All
E.R.
179) since the discrctionnry npturc
of
the
powers
of
n
Cotchmcnt Board hnd bccn'cmplinsieed
and
had formed the foundation
of
the
Irasoning
of
the majority
of
thc
Hotise
of
Lords in
Kent
v.
East
Su.flolk
Cnlchment
Board,
or
see
Ghessington Derrlopnietit
Co.
v.
Surbilon
B.
C.
[1948] Ch.
369.
See, for exoinple.
Ayr Harbour
Tritslces
1'.
Oswald
(1879)
11
Ch.D.
661;
York
Corporation
v.
Henry
1,cnlhani
d
Sons
[
192.11
1
Cli.
557
and the cased there
discussed.
*9
I19261
AX:
at
p.
364.
453;
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