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Table of Contents

  1. Acknowledgments
  2. Chapter one: Defining the constitution
  3. Chapter two: Parliamentary sovereignty
  4. Chapter three: The rule of law and the separation of powers
  5. Chapter four: The royal prerogative
  6. Chapter five: The House of Commons
  7. Chapter six: The House of Lords
  8. Chapter seven: The electoral system
  9. Chapter eight: Parliamentary privilege
  10. Chapter nine: Constitutional conventions
  11. Chapter ten: Local government
    1. Attorney-General v Aspinall [1835-42] All ER Rep 525
    2. Kruse v Johnson [1898] 1 2 QB 91
    3. Roberts v Hopwood [1925] All ER 24; [1925] AC 578
    4. Secretary of State for Education and Science v Tameside MBC [1976] 3 All ER 665; [1976] 3 WLR 641
    5. Bromley London Borough Council v Greater London Council and another [1982] 1 All ER 129
    6. Wheeler and others v Leicester City Council [1985] 2 All ER 151 (CA)
    7. Wheeler and others v Leicester City Council [1985] 2 All ER 1106 (HL)
    8. R v Lewisham London Borough Council, ex parte Shell UK Ltd [1988] 1 All ER 938
    9. Norwich City Council v Secretary of State for the Environment [1982] 1 All ER 737
  12. Chapter eleven: Parliamentary sovereignty within the European Union
  13. Chapter twelve: The governance of Scotland and Wales
  14. Chapter thirteen: Substantive grounds of judicial review 1: illegality, irrationality and proportionality
  15. Chapter fourteen: Procedural grounds of judicial review
  16. Chapter fifteen: Challenging governmental decisions: the process
  17. Chapter sixteen: Locus standi
  18. Chapter seventeen: Human rights I: Traditional perspectives
  19. Chapter eighteen: Human rights II: Emergent principles
  20. Chapter nineteen: Human rights III: New substantive grounds of review
  21. Chapter twenty: Human rights IV: The Human Rights Act 1998
  22. Chapter twenty-one: Human rights V: The impact of The Human Rights Act 1998
  23. Chapter twenty-two: Human rights VI: Governmental powers of arrest and detention
  24. Chapter twenty-three: Leaving the European Union

R v Lewisham London Borough Council, ex parte Shell UK Ltd [1988] 1 All ER 938

NEILL LJ:.... By a notice of application for judicial review dated 16 June 1987 the applicant, Shell UK Ltd, seeks various forms of relief in relation to a decision of Lewisham London Borough Council dated 11 March 1987.

The decision, as set out in the notice of application and as communicated to the applicants in a letter from the leader of the council dated 16 March 1987, was in these terms:

to adopt a policy of boycotting all Shell products subject to alternative products being available on reasonable terms. This has been agreed in line with the council's commitment to promote harmonious race relations within the Borough of Lewisham.

The applicant seeks a declaration that this decision was ultra vires and unlawful, an order of certiorari to quash the decision and an injunction to restrain the council from implementing or applying the decision or a decision to the like effect....

The facts....

Shell UK Ltd is a company registered in the United Kingdom. It trades in the United Kingdom and does not itself trade in South Africa. It is, however, part of a group of several hundred companies known collectively as the Royal Dutch/Shell Group of Companies.... The operating companies in central and southern Africa include Shell South Africa Pty Ltd and Shell Oil Southwest Africa Ltd....

The London borough of Lewisham is an inner London borough with a population somewhat in excess of 200,000 of whom approximately 40,000(18%) are black. For a number of years the council has taken steps to show its opposition to the policy of apartheid practised in South Africa...

It is also clear that the council takes very seriously the duty imposed on every local authority by s 71 of the Race Relations Act 1976....

On 9 February 1987 there was a meeting of the council's anti-apartheid working party. At that meeting the working party considered as a matter of urgency a report on Shell Transport which was intended to be put before a meeting of the policy and resources committee....

The report ...set out the background to the current anti-apartheid strategy of the council and the matters which were considered to provide a justification for a boycott of Shell products. In para 5 of the report the feasibility of a boycott of Shell products was examined and the views of the various departments of the council were stated. It concluded, in para 5.10:

"the comments received from Council departments ( show that the use of products other than Shell's is generally feasible, but that there may be circumstances in which an alternative is not available".

In para 6 of the report mention was made of the legal position and of the council's duty under s 71 if the 1976 Act. Having stated that duty, the report continued:

"In accordance with that duty it can be maintained that it is inconsistent to continue to do business with firms which have major direct and indirect links with South Africa. In reaching its decision the council also needs to take account of its fiduciary responsibility to the ratepayers, and give due consideration to any increase in costs which would fall upon the ratepayers if the Council decide to boycott Shell. The Solicitor to the Council advises further that in making their decision to boycott a particular company, Members would have to demonstrate and be satisfied that such action was taken in the interests of good race relations...".

I come now to the crucial meeting of the policy and resources committee on 6 March. Before the committee was a report which was in broadly similar terms to the report which had been considered nearly a month before by the anti-apartheid working party....

[T]he report contained a paragraph setting out what were considered to be the financial implications of a boycott. This paragraph was as follows:

"Based on information received from Departments, a boycott of Shell products can be implemented with only a small additional cost to the Council identified at this stage ((2,000 to London Scientific Services for product testing)....".

Finally there was attached to the report by way of an appendix the opinion of Lord Gifford as to the legal position. In his opinion, Lord Gifford set out the provisions of s 71 of the 1976 Act and made reference to the decision of the House of Lords in Wheeler v Leicester City Council. In para 4, he continued:

"The Section indicates the nature of the judgment which has to be made by the Council. They must be guided, not by their abhorrence of the Apartheid system in itself, but by their judgment as to the effects on race relations in their Borough of taking or not taking the action under consideration. Put another way, if the making of contracts with a company known to be linked with South Africa would (in the judgment of members) have a bad effect upon race relations in Lewisham, that is a matter to which the Council must have regard"....

Later in the opinion, having set out other considerations which the council should bear in mind, Lord Gifford expressed the conclusion that 'the proposed action to be taken by the Council would be a proper use of their legal powers and would not be open to successful challenge in the courts....

The.... resolution which was passed on 6 March was in the following terms: (1) not to purchase Shell products or other goods from Shell's UK companies or subsidiaries, subject to alternative products being available on reasonable terms, and (2) to agree that in choosing alternative sources of supply council departments seek the advice of the contracts compliance unit to avoid using other companies with substantial South African interests. The second point of the resolution was amended on 8 July 1987 to read as follows: "in choosing alternative sources of supply, Council Departments be asked to seek advice about using other companies with substantial South African interests".

The resolution of the policy and resources committee then came before the full council on 11 March 1987, when it was approved and adopted.

On 16 March 1987 Cllr Sullivan, writing as leader of the council, wrote to the chairman of Shell Transport to inform him of the decision reached on 11 March. This is an important letter and I propose to set it out in full. It was in these terms:

"Following the meeting in December between Mr. Tookey and Joint Action Against Apartheid, Lewisham Council is gravely concerned that you have been unable to give any assurances that Shell will be withdrawing from South Africa. On 11 March the Council decided to adopt a policy of boycotting all Shell products subject to alternative products being available on reasonable terms. This has been agreed in line with the Council's commitment to promote harmonious race relations within the Borough of Lewisham. As you are probably aware Lewisham Council is just one of an increasing number of Local Authorities and Trade Unions across the country who are concerned about the activities of companies such as Shell in South Africa. We are all keen to ensure that we are not inadvertently contributing to Apartheid via our pension fund investments and purchase of goods....."

The case for Shell UK

The primary argument put forward on behalf of Shell UK was that the main purpose and effect of the decision taken by the council in March 1987 was to penalise or punish Shell UK for the fact that the Shell group had trading links with South Africa and to bring pressure on the Shell group to change its policy.

I shall have to refer later to the decision of the House of Lords in Wheeler v Leicester City Council, on which Shell UK has placed reliance.....

Shell UK further argued that the council had a fiduciary duty to its ratepayers and a statutory duty under s 135 of the Local Government Act 1972 to ensure fair competition for local government contracts...

It was submitted that the council, by effectively boycotting Shell, was in breach of these duties and that the breach could not be justified in law by the councils's limited duty under s 71 of the 1976 Act to have due regard to the need to promote good race relations. Furthermore, it was argued, even if it could not be shown that the main or dominant purpose of the March decision was to penalise Shell UK and to induce a change of policy, the desire to achieve these ends was certainly a substantial influence on the decision. Accordingly, the decision was ultra vires because an improper or irrelevant factor had exerted a substantial influence on the council when the decision was reached....

The case for the council

The arguments put forward on behalf of Shell UK were strenuously contested on behalf of the council by means of a detailed and careful argument which was developed on the following lines.

(1) That the court was concerned with the state of mind of the council as a corporate body. This state of mind was to be ascertained by reference to the terms of the resolution which was passed and by reference to the documents which were before the council or before the policy and resources committee at the relevant times...

(2) That the anti-apartheid policy adopted by the council was in accordance with and a response to a worldwide campaign. The adoption of this policy was manifestly good for race relations in Lewisham and it was unnecessary for the council to produce evidence to show that ratepayers or residents supported the policy.

(3) That the resolution did not impose an absolute ban on Shell UK or its products: the applicants remain free to tender for contracts with the council. In reaching a decision in any particular case the council would have due regard to its financial responsibilities....

(4) Accordingly it was submitted that, though s 71 of the 1976 Act provided a powerful justification of the policy adopted by the council, the decision would have been lawful and intra vires even in the absence of s 71.

(5) That it is now too late to suggest that politics played no part in local government. The court should be careful not to become involved in a political dispute, as was recognised by Watkins LJ in the public library case, R v Ealing London BC, ex p Times Newspapers Ltd (1987) 85 LGR 316.....

The relevant law

It was argued on behalf of the council that the powers of a local authority are very wide and are comparable to those of a natural person. It was therefore submitted, as I have already observed, that the decision could have been reached by the council whether or not any duty had been imposed on it by s 71 of the 1976 Act. I am unable to accept this submission.....

[I]t is to be remembered that the council is the creation of statute. As Lord Wilberforce emphasised in Bromley London BC v Greater London Council even the GLC "though a powerful body, with an electorate larger and a budget more considerable than those of many nation states, is the creation of statute and only has powers given to it by statute".

I turn, therefore, to consider the decision of the House of Lords in Wheeler v Leicester City Council....

From this decision it seems clear that, though the scope of s 71 of the 1976 Act is wide and embraces all the activities of the council, a council cannot use its statutory powers in order to punish a body or person who has done nothing contrary to English law. Nor can a council exercise its statutory powers in a way which involves some procedural impropriety or some unfairness towards a body or person who has acted reasonably and in no way in a hostile attitude towards the council.

I come finally to consider what principles of law should be applied if it can be shown that the statutory powers of the council were exercised for more than one reason or purpose....

I start with a short passage from the judgment of May LJ in R v Broadcasting Complaints Commission, ex p Owen [1985] 2 All ER 522 at 533, [1985] QB 1153 at 1177 where he said:

"Where the reasons given by a statutory body for taking or not taking a particular course of action are not mixed and can clearly be disentangled, but where the court is quite satisfied that even though one reason may be bad in law, nevertheless the statutory body would have reached precisely the same decision on the other valid reasons, then this court will not interfere by way of judicial review. In such a case, looked at realistically and with justice, such a decision of such a body ought not to be disturbed".

But where the two reasons or purposes cannot be disentangled and one of them is bad or where, even though the reasons or purposes can be disentangled, the bad reason or purpose demonstrably exerted a substantial influence on the relevant decision the court can interfere to quash the decision....

Conclusions.....

It seems to me to be quite clear...that the purpose of the decision was not merely to satisfy public opinion in the borough or to promote good race relations in the borough, but was in order to put pressure on Shell UK and Shell Transport to procure a withdrawal of the Shell group from South Africa. Furthermore, as I see it, the wish to achieve this purpose exerted a very substantial influence on the decision....

The wish to change the Shell policy towards South Africa was inextricably mixed up with any wish to improve race relations in the borough and this extraneous and impermissible purpose has the effect of vitiating the decision as a whole....