British Oxygen Co Ltd v Minister of Technology [1971] AC 610...

Facts

• British Oxygen Co Ltd regularly purchased gas cylinders costing approximately £20 each, used for storing and transporting gases.
• The Board of Trade administered a grant scheme under the Industrial Development Act 1966 for capital expenditure on new plant and machinery.
• The Board’s policy was to refuse grants for items costing less than £25 each.
• As British Oxygen’s cylinders were below this threshold, the company's significant expenditure on them was ineligible for a grant.
• British Oxygen challenged the decision, alleging that the Board had unlawfully fettered its discretion and acted unreasonably.

Issues

1. Whether the Board of Trade unlawfully fettered its discretionary power by adopting and applying a fixed policy regarding grant eligibility.
2. Whether the Board’s refusal to award grants for items costing less than £25 was unreasonable in the Wednesbury sense.

Decision

• The House of Lords found that the Board had not unlawfully fettered its discretion.
• It was held permissible for an authority to adopt and follow a general policy, provided it remained prepared to consider exceptions where appropriate.
• The Board had considered British Oxygen’s arguments and demonstrated willingness to make exceptions.
• The Board’s refusal to grant aid for cylinders costing less than £25 was not unreasonable under the Wednesbury standard, as the policy was justified by administrative efficiency and cost considerations.

Legal Principles

• Public authorities may adopt general policies to guide the exercise of discretionary powers but must remain open to considering exceptional cases on their merits.
• Unlawful fettering arises only if an authority closes its mind to possible exceptions and refuses to consider circumstances outside its policy.
• The Wednesbury unreasonableness test sets a high bar: only decisions that are irrational or perverse can be deemed unlawful.
• Administrative consistency is legitimate, but not at the expense of individual justice where special circumstances warrant exception to policy.

Conclusion

British Oxygen Co Ltd v Minister of Technology [1971] AC 610 establishes that policies guiding the exercise of discretion are lawful if authorities remain willing to consider exceptions, and confirms the demanding standard for Wednesbury unreasonableness in judicial review of administrative decisions.