R v Lewisham LBC, ex parte Shell UK Ltd [1988] 1 All ER 938 ...

Facts

• Lewisham London Borough Council implemented a boycott of Shell UK's goods and services due to Shell's commercial activities in South Africa during the apartheid era.
• The council invoked section 71 of the Race Relations Act 1976 to justify its actions, claiming the boycott would encourage good relations between racial groups.
• Shell UK Ltd challenged the decision through judicial review, arguing the boycott was ultra vires and not within the scope of the council's statutory powers.
• Shell contended the council's motivation was to influence Shell's South African operations rather than to further racial accord within the borough.

Issues

1. Whether the council’s boycott of Shell UK's goods and services was within its statutory powers under the Race Relations Act 1976.
2. Whether the council's decision was motivated by an improper purpose, rendering it unlawful.
3. Whether the decision was so unreasonable as to fail the Wednesbury unreasonableness test.

Decision

• The Court of Appeal found in favour of Shell UK Ltd, holding the council’s boycott was motivated by an improper purpose.
• The court determined that the council's primary aim was to pressure Shell to withdraw from South Africa, which was outside its statutory remit under section 71 of the Race Relations Act 1976.
• While the court did not find the decision to be Wednesbury unreasonable in itself, the improper purpose rendered the boycott invalid.
• The court clarified that local authorities must act within their statutory framework and cannot use their powers to pursue political aims unrelated to their legal duties.

Legal Principles

• Statutory powers of local authorities must be used only for purposes authorized by statute; pursuing unrelated political objectives renders the act ultra vires.
• The principle of improper purpose prohibits public bodies from exercising powers primarily for motives outside the statutory intent.
• The Wednesbury unreasonableness test gauges whether a decision is so unreasonable that no reasonable authority would have made it.
• Judicial review enforces the principle of legality by ensuring public authorities act within their legal powers.
• Although not explicit in the judgment, the proportionality of actions taken by public bodies is relevant to administrative law.

Conclusion

The Court of Appeal ruled that Lewisham LBC's boycott of Shell was unlawful as it was motivated by an improper purpose outside statutory authority, reaffirming the limits on local government powers and the central role of judicial review in upholding lawful administrative conduct.