Ultra vires[a] is aLatin phrase used in law to describe an act that requires legal authority but is done without it. Its opposite, an act done under proper authority, isintra vires.[b] Acts that areintra vires may equivalently be termed "valid", and those that areultra vires termed "invalid".
Legal issues relating toultra vires can arise in a variety of contexts:
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In corporate law,ultra vires describes acts attempted by a corporation that are beyond the scope of powers granted by the corporation'sobjects clause, itsarticles of incorporation, itsby-laws, similar founding documents, or laws authorizing a corporation's formation. Acts attempted by a corporation that are beyond the scope of its charter arevoid orvoidable.
Several modern developments relating to corporate formation have limited the probability thatultra vires acts will occur. Except in the case ofnon-profit corporations (includingmunicipal corporations), this legal doctrine isobsolescent; within recent years, almost all business corporations have been chartered to allow them to transact any lawful business. TheModel Business Corporation Act of the United States states that: "The validity of corporate action may not be challenged on the ground that the corporation lacks or lacked power to act." The doctrine still lives among non-profit corporations or state-created corporate bodies established for a specific public purpose, such as universities or charities.
Historically all companies in the United Kingdom were subject to the doctrine ofultra vires and any act which was outside of the objects specified in a company'smemorandum of association would beultra vires andvoid.[5] That result was commercially unpalatable. It led to companies being formed with extremely wide and generic objects clauses permitting a company to engage in all manner of commercial activities.[9]
The position was changed by statute by theCompanies Act 1985, which essentially abolished the doctrine concerning commercial companies. The position is now regulated by theCompanies Act 2006, sections 31 and 39, which similarly significantly reduces the applicability ofultra vires in corporate law. However, it can still apply to charities, and a shareholder may apply for aninjunction, in advance only, to prevent an act which is claimed to beultra vires.
According to American laws, the concept ofultra vires can still arise in the following kinds of activities in some states:
In many jurisdictions, such as Australia, legislation provides that a corporation has all the powers of a natural person[10] plus others; also, the validity of acts which are madeultra vires is preserved.[11]
Underconstitutional law, particularly inCanada and theUnited States, constitutions give federal and provincial or state governments various powers. To go outside those powers would beultra vires; for example, although the court did not use the term in striking down a federal law inUnited States v. Lopez because it exceeded the constitutional authority of Congress, the Supreme Court still declared the law to beultra vires.[12]
According to Article 15.2 of theIrish constitution, theOireachtas (parliament) is the sole lawmaking body in theRepublic of Ireland. In the case ofCityView Press v AnCo, however, theSupreme Court of Ireland held that the Oireachtas may delegate certain powers to subordinate bodies through primary legislation, so long as these delegated powers allow the delegatee only to further the principles and policies laid down by the Oireachtas in primary legislation and not craft new principles or policies themselves. Any piece of primary legislation that grants the power to make public policy to a body other than the Oireachtas is unconstitutional; however, as there is a presumption inIrish constitutional law that the Oireachtas acts within the confines of the constitution, any legislation passed by the Oireachtas must be interpreted in such a way as to be constitutionally valid where possible.
Thus, in several cases where bodies other than the Oireachtas were found to have used powers granted to them by primary legislation to make public policy, the impugned primary legislation was read in such a way that it would not have the effect of allowing a subordinate body to make public policy. In these cases, the primary legislation was held to be constitutional. Still, the subordinate or secondary legislation, which amounted to creating public policy, was held to beultra vires the primary legislation and was struck down.
InUK constitutional law,ultra vires describes patents, ordinances, and the like enacted under theprerogative powers of the Crown that contradict statutes enacted by theCrown-in-Parliament. Almost unheard of in modern times,ultra vires acts by the Crown or its servants were previously a major threat to therule of law.[citation needed]
Boddington v British Transport Police is an example of an appeal heard by the House of Lords that contested that a by-law was beyond the powers conferred to it under section 67 of theTransport Act 1962.[8]
Inadministrative law, an act may bejudicially reviewable forultra vires in a narrow or broad sense. Narrowultra vires applies if an administrator did not have the substantive power to make a decision or it was wrought with procedural defects. Broadultra vires applies if there is an abuse of power (e.g.,Wednesbury unreasonableness or bad faith) or a failure to exercise an administrative discretion (e.g., acting at the behest of another or unlawfully applying a government policy) or application of discretionary powers in an irrational and wrong way.[13] Either doctrine may entitle a claimant to various prerogative writs, equitable remedies or statutory orders if they are satisfied.
In the seminal case ofAnisminic v Foreign Compensation Commission,[14] Lord Reid is credited with formulating the doctrine ofultra vires. However,ultra vires, together with unreasonableness, was mentioned much earlier by Lord Russell in the well-known case,Kruse v Johnson,[15] regarding challenging by-laws and other rules.Anisminic is better known for not depriving courts of their jurisdiction to declare a decision a nullity, even if a statute expressly prevents it from being subject to judicial review. Further cases such asBromley LBC v Greater London Council[16] andCouncil of Civil Service Unions v Minister for the Civil Service[17] have sought to refine the doctrine.
InHammersmith and Fulham London Borough Council v Hazell,[18] theHouse of Lords held thatinterest rate swaps entered into bylocal authorities (a popular method of circumventing statutory restrictions on local authorities borrowing money at that time) were allultra vires andvoid, sparking araft of satellite litigation.
Mark Elliott (St Catharine's College, Cambridge) proposes a modifiedultra vires doctrine for administrative law, placing it firmly in the correct constitutional setting.[19]
