It is clear that in certain circumstances a local authority can plead lack of legal capacity as a defence to a private law claim (see Credit Suisse v Allerdale Borough Council  4 All ER 129). However, can a local authority prosecute for failure to have a valid caravan site licence in place, when the initial licence the authority had purported to grant was ultra vires? ‘No,’ said the Court of Appeal on 8 November in White v South Derbyshire District Council  EWHC 3495 (Gross LJ and Singh J).
The present caravan site occupier had received a transfer by the council of the previous occupier’s site licence. Under section 3(3) of the Caravan Sites and Control of Development Act 1960 a local authority may issue such a licence only if the applicant has requisite planning consent. At the time of the original site licence grant, the land had no planning consent. However, it was accepted that if an application had been made at the material time for a certificate of lawful use and development, that would have been granted since the land had been used as a caravan site for at least the requisite period of 10 years.
While such a certificate was subsequently issued, the appellants failed to apply for a new licence. Under section 1 of the 1960 act, it is an offence to operate a caravan site without a requisite site licence. The district judge at first instance therefore found that, in the absence of planning consent at the material time, there could be no valid grant of a site licence. Consequently, since the licence transferred was also invalid, the relevant occupiers had no valid licence. The appellants appealed successfully against their consequent conviction on the basis (among other things) that the council was unable in the circumstances to rely on the unlawfulness of its own act.
Court of Appeal decision
As the courts have noted (see recently, for example, in a civil context, Charles Terence Estates Limited v Cornwall Council  EWCA Civ 1439) public law ultra vires is much more nuanced than its private law counterpart. For in private law (per Rolled Steel Products (Holdings) Ltd v British Steel and others  3 All ER 52), ultra vires means either: (i) acts beyond the capacity of the company and therefore void; or (ii) acts within the capacity of the company but in excess or abuse of powers where a third party with notice of the excess or abuse will be unable to enforce the transaction.
However, while in public law an ultra vires act is technically a nullity (following Anisminic Ltd v Foreign Compensation Commission  2 AC 147), the inherently discretionary nature of public law means (as Lord Hailsham once said) that administrative law courts are faced with ‘not so much a stark choice of alternatives but a spectrum of possibilities’.
In the instant case the Court of Appeal opened its discussion by noting that the case in question ‘raises in a stark form a conundrum which arises from the basic principle of English public law that an ultra vires act is void and therefore to be treated as a nullity. Nevertheless, that act may have been relied upon by innocent third parties in the meantime’.
So while in administrative law an act may be void, it may not be so for all purposes. Singh J (who gave the leading judgment) canvassed this issue and the evolution of relevant case law in this area. The difficulty is in the need to reconcile the lack of legal foundation in an ultra vires decision with the inherent discretion of an administrative law court to make an order appropriate in all the circumstances. Singh J referred in this context to ‘the well-known textbook on administrative law by the late Sir William Wade and Professor Forsyth (10th edition)’ and page 253 where it said: ‘The truth is that the court will invalidate an order only if the right remedy is sought by the right person in the right proceedings and circumstances. The order may be "a nullity" and "void" but these terms have no absolute sense: their meaning is relative, depending upon the court’s willingness to grant relief in any particular situation… the problems of nullity are soluble by the formulation of principles and by their logical application, not by abandoning the field to free discretion.’
The same work went on to say that: ‘An important step in developing a principled and practical approach to these conundrums has been the development of the theory of the second actor. This theory, which has attracted significant judicial support, seeks to explain how an unlawful and void administrative act may nonetheless have legal effect. It is built on the perception that while unlawful administrative acts (the first acts) do not exist in law, they clearly exist in fact. Those unaware of their invalidity (the second actors) may take decisions and act on the assumption that these (first) acts are valid. When this happens the crucial question is whether these latter, or second acts, are valid.’
Singh J noted that the instant case ‘raises a question which has not been the subject of direct authority: can a public authority which has acted ultra vires rely on the unlawfulness of its own act in order to found a criminal prosecution?’. However, he had earlier considered various authorities in the broad area which he said provided ‘helpful guidance as to the underlying policy of the law in this area which assists in the resolution of that problem’. In particular, there is the indication that ‘a void act may have some legal effect for some purposes, and that the law will strive to protect innocent third parties who have relied upon the apparent validity of that act’.
In the instant circumstances, the authority was unable to submit ‘any authority in which the prosecution has been entitled to rely on the unlawfulness of its own act so as to found a criminal prosecution’. And Credit Suisse did not assist since it was ‘a civil case… far removed from the facts of the present case’. In all the circumstances, Singh J allowed the appellants’ appeal. Gross LJ agreed and said (also referring to Wade and Forsyth) that ‘an ultra vires administrative act is void, but not necessarily for all purposes – in particular, between the time of the act and the time, if any, when it is set aside, reflecting a reluctance to push the doctrine of nullity to extremes’.
This further supports the distinction in use of the term ultra vires in public and private law, as recently canvassed in Charles Terence Estates. Although ‘void’ might suggest a vacuous waste, in public law there may just be life there. And if there can be 50 shades of grey, it seems there can be as many shades of void.
Dr Nicholas Dobson is a senior consultant with Pannone specialising in local and public law. He is also communications officer for the Association of Council Secretaries and Solicitors