Facts
- Mr. Smedley, an ordinary UK taxpayer with no special or proprietary stake in the sums at issue, initiated proceedings to question the legality of the United Kingdom’s annual contribution to the European Community budget. His status was therefore entirely representative of the general body of taxpayers.
- The Treasury, acting on behalf of the Crown, calculated and transferred the relevant amounts in fulfilment of the United Kingdom’s treaty and statutory obligations arising from membership of the European Community. Mr. Smedley accepted the existence of the fundamental duty to contribute but contended that the precise formula adopted by the Treasury when fixing the United Kingdom’s share was unlawful.
- The complaint was not directed to the political desirability, economic prudence, or diplomatic wisdom of paying the contribution. Instead, it was confined to an alleged error of law in the Treasury’s interpretation and application of the governing European Community provisions, with the consequent risk that public money was being disbursed without proper legal authority.
- Mr. Smedley sought judicial review, asking the High Court for a declaration that the Treasury’s calculation method was ultra vires and for an order restraining further illegal payments. The case thus squarely raised the question of whether a taxpayer with no personal loss could nonetheless invoke judicial scrutiny of a high-level spending decision purely on legality grounds.
Issues
- Whether an individual taxpayer, absent any special or direct financial injury, possesses “sufficient interest” (locus standi) to apply for judicial review of decisions concerning national public expenditure.
- Whether, on the merits, the Treasury’s method of calculating and paying the United Kingdom’s contribution to the European Community budget complied with the relevant requirements of European Community law, thereby rendering the expenditure lawful.
Decision
- The High Court held that Mr. Smedley did have standing. Although the traditional approach had been to regard taxpayers as lacking a distinctive interest in how general taxation revenue was used, the Court observed that modern administrative law places weight on public accountability and the rule of law. Where the challenge is to legality rather than policy, a taxpayer’s interest is not abstract or academic but reflects a genuine concern that public funds be spent in accordance with the law.
- The Court differentiated between (a) disputes that question the wisdom or merits of governmental allocations—matters properly left to political rather than judicial resolution—and (b) disputes that allege a breach of legal limits. Only the latter category, to which Mr. Smedley’s claim belonged, was considered justiciable.
- Having accepted standing, the Court examined the legality point. On the material before it, the judges concluded that the Treasury’s calculation and payment were lawful and consistent with European Community provisions. Accordingly, substantive relief was refused.
- Nevertheless, the judgment made clear that the dismissal on the merits did not undermine the broader principle that an individual taxpayer may approach the Court to test the legality of significant public expenditure decisions.
Legal Principles
- Standing in judicial review is a flexible concept. A court should not exclude a challenger merely because his or her interest is shared with a large class of people, provided the challenge is aimed at preventing an unlawful act.
- A clear distinction exists between disputes over the legality of an expenditure and disputes over political or economic preferences. Courts are guardians only of the former.
- Public accountability entails that the Government, even when dealing with large-scale international payments, remains within the limits imposed by domestic and applicable international law.
- The case demonstrates that broader public interest standing supports compliance with the rule of law by enabling challenges that elected representatives or affected commercial parties might, for various reasons, decline to pursue.
Conclusion
R v HM Treasury, Ex parte Smedley [1985] QB 657 affirmed that a taxpayer’s concern for the lawful management of public funds can satisfy the “sufficient interest” test in judicial review. Although Mr. Smedley ultimately failed on the substantive legality point, the Court’s reasoning extended locus standi beyond narrow personal or financial stakes and strengthened the role of the judiciary in overseeing the lawfulness of executive expenditure.
