Introduction
Judicial review serves as a central tool in administrative law, allowing courts to check the lawfulness of actions by public bodies. Preston v IRC [1985] 2 All ER 327 establishes a key ruling on how courts may review the Inland Revenue's (now HMRC) authority to provide concessions. This case outlined clear rules about the boundaries of judicial review over discretionary powers, emphasizing that actions must remain within legal limits. The House of Lords clarified when such decisions can be challenged, focusing on fair procedures, transparent reasoning, and compliance with statutory purposes. This ruling demonstrates the legal checks on public bodies even when exercising discretionary powers.
The Facts of Preston v IRC
The case involved a taxpayer, Mr. Preston, who sought a concession from the Inland Revenue regarding tax payments. The Inland Revenue, which had statutory authority to grant such concessions, refused his request. He applied for judicial review, arguing the decision was unreasonable and procedurally unfair. The central issue for the court was the extent to which courts could scrutinize decisions made by public bodies under discretionary powers.
The House of Lords' Decision
The House of Lords dismissed Mr. Preston's appeal. The court held that the Inland Revenue's authority to grant concessions was not absolute and could be subject to review. However, the court emphasized that review should not substitute the court’s judgment for the Inland Revenue’s. The court’s role was to ensure the Inland Revenue acted within its legal authority, considered relevant factors, and disregarded irrelevant ones. The Preston ruling confirmed that discretionary powers must comply with public law principles.
The Principle of Legitimate Expectation
Although Mr. Preston’s claim failed, the case clarified how legitimate expectation applies to discretionary powers. While not directly applied in Preston, the decision acknowledged that if the Inland Revenue had consistently granted concessions in similar cases, this could create a legitimate expectation. This would not guarantee approval but would require the Inland Revenue to justify any deviation from past practice. Subsequent cases, such as R v North and East Devon Health Authority, ex parte Coughlan [2001] QB 213, built on this principle.
Impact on Administrative Law
Preston v IRC influenced administrative law by confirming courts may review how public bodies exercise discretionary powers, preventing unlawful or arbitrary decisions. The case highlighted the need to act within legal boundaries and consider appropriate factors when using discretion. It also contributed to the development of the legitimate expectation doctrine, offering greater predictability for individuals interacting with public bodies.
Relation to Wednesbury Unreasonableness
The Wednesbury unreasonableness standard from Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 relates to the court’s approach in Preston. Though not explicitly referenced, the principle informed the reasoning. The House of Lords indirectly applied the Wednesbury test by evaluating whether the Inland Revenue’s decision was so unreasonable that no reasonable authority could have made it. The court’s reluctance to overturn the Inland Revenue aligns with the high threshold set by Wednesbury.
Comparison with Later Cases
While Preston established important principles, subsequent cases refined the scope of judicial review. For instance, R (Padfield) v Minister of Agriculture, Fisheries and Food [1968] AC 997 held that ministerial discretion must align with an Act’s objectives, a rule equally applicable to the Inland Revenue. Additionally, the use of proportionality in cases involving rights provides another method to evaluate discretionary powers, differing from Preston’s framework.
Conclusion
Preston v IRC [1985] 2 All ER 327 remains a foundational case in administrative law concerning the review of discretionary powers. The House of Lords affirmed that discretion must be exercised lawfully, reasonably, and within statutory limits. While respecting the Inland Revenue’s broad discretion, the court reaffirmed its duty to intervene if power is misused. The case advanced the legitimate expectation doctrine, influencing later rulings on public body conduct. Preston balances administrative flexibility with judicial oversight. Its principles continue to guide judicial review, preventing misuse of authority. The interplay between discretion, legal scrutiny, and fairness in Preston remains central to administrative law, ensuring public bodies comply with legal standards.
