Chapter-30 Absence of Authority and Interpretive process-part-1

The Absence of Previous Authority

LORD WOOLF observed in the case[1] that: “There may be no clear previous authority to support this conclusion but this is not surprising where the relatively new jurisdiction of ordering restitution is involved. What is more important than the absence of clear support in the authorities for the grant of compound interest is the absence from the existing authorities of any statement of principle preventing the natural development of a salutary equitable jurisdiction enabling compound interest to be awarded. The jurisdiction is clearly desirable if full restitutionin some cases is to be achieved. It is relevant here to repeat what is stated at the outset in the bank's case under the heading "The Position in Principle":

"1. 'Any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is to prevent a man from retaining the money of or some benefit
derived from another which it is against conscience that he should keep[2]'

The operation of stare decisis in constitutional cases was considered in the Second Territory Senators Case [3]. AICKIN J undertook a review of the authorities and set out some general considerations to assist in deciding whether a previous constitutional decision regarded as erroneous should be overruled. In summary, these considerations were[4]:

1. Whether the error of the prior decision had been made manifest by later cases which had not directly overruled it.
2. Whether the prior decision went with "a definite stream of authority" and did not conflict with established principle.
3. Whether the prior decision could be confined as an authority to the precise question which it decided or whether its consequences would extend beyond that question.
4. Whether the prior decision was isolated as receiving no support from other decisions and forming no part of a stream of authority.
5. Whether the prior decision concerned a fundamental provision of the Constitution or involved a question of such vital constitutional importance that its consequences were likely to be far reaching, although not immediately foreseeable in detail.

Aickin J also pointed out that as a result of the progressive abolition of appeals to the Privy Council in 1968 and 1975 the Court had become "in all respects a court of ultimate appeal". He said[5]:

"The fact that error can no longer be corrected elsewhere must change our approach to the overruling of our own decisions, at least to some extent. It remains however a serious step, not lightly to be undertaken."

Another important factor distinguishing constitutional cases from others is that the effect of constitutional decisions cannot generally be remedied by legislative amendment.[6].

The observation by Dixon J that there was "no very definite rule as to the circumstances in which [the Court] will reconsider an earlier decision" was cited by the joint judgment in John v Federal Commissioner of Taxation[7]. Four relevant considerations were set out in that case:

1. Whether the earlier decision rested upon a principle carefully worked out in a significant succession of cases.
2. Whether there was a difference between the reasons of the Justices constituting the majority in the earlier decision.
3. Whether the earlier decision had achieved a useful result or caused considerable inconvenience
4. Whether the earlier decision had been independently acted upon in a way which militated against reconsideration, as in the Second Territory Senators Case.

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[1] Westdeutsche Landesbank Girozentrale v Islington LBC [1996] UKHL 12 (22 May 1996)
URL: http://www.bailii.org/uk/cases/UKHL/1996/12.html
Cite as: [1996] 2 All ER 961, [1996] 2 WLR 802, [1996] UKHL 12, [1996] 5 Bank LR 341, [1996] AC 669 per LORD WOOLF

[2] Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. [1943] A.C. 32, 61 (Lord Wright), approved in Woolwich Equitable Building Society v. Inland Revenue Commissioners [1993] A.C. 70, 197, 202 (H.L.).[Observing further that:” Restitution is an area of the law which is still in the process of being
evolved by the courts. In relation to restitution there are still questions remaining to be authoritatively decided. One question, which was still undecided until the decision on this appeal, is whether its legitimacy is derived from the common law or equity or both. In order to decide whether compound interest is payable in this case I do not consider it is necessary to decide which is the correct answer to that question, but I am content to assume that the cause of action is one at common law. If the principal sum is repayable as money had and received rather than under some trust or because of the existence of a fiduciary duty it is still unconscionable for the local authority to retain the benefit it made from having received payment under a contract it purported to make which was outside its powers. The fact that, until the law was clarified by the decision in this case, the local authority may reasonably not have appreciated that it should make restitution is not critical. What is critical is that the payment of compound interest is required to achieve restitution. A defendant may perfectly reasonably not regard himself as having been a trustee until the court so decides but this does not effect the remedies which the court has jurisdiction to grant. The jurisdiction of the court to grant remedies has to be judged in the light of what the court decides.”

[3] Queensland v The Commonwealth (1977) 139 CLR 585; [1977] HCA 60.

[4] [1977] HCA 60; (1977) 139 CLR 585 at 630

[5] [1977] HCA 60; (1977) 139 CLR 585 at 630

[6] There may be legislative means to offset the effects of a particular constitutional decision: see the use of referral of powers by the States in support of the Corporations Act 2001 (Cth) and associated legislation following the decision of the Court in Re Wakim; Ex parte McNally (1999) 198 CLR 511; [1999] HCA 27.

[7] [1989] HCA 5; (1989) 166 CLR 417 at 438-439; [1989] HCA 5.