Rederiaktiebolaget Amphitrite v The King (The Amphitrite)

Facts

Swedish shipowners wished to send a vessel to a British port and asked the British authorities whether she would be allowed to leave again. They were given an assurance that if she carried a particular cargo, she would not be detained. Clearance was later refused. The owners brought a petition of right claiming damages for breach of contract.

History

The claim was brought by petition of right and tried by Rowlatt J in the King's Bench Division.

Issue

Whether the assurance created an enforceable contract binding the Crown to give clearance, or whether such an undertaking was not capable of binding the government as to how it would exercise its executive discretion in future.

Held

The claim failed. No enforceable contract had been made, since the assurance was an expression of intention about future conduct and the Crown could not bind itself by contract in the exercise of its executive powers.

Ratio

• The government cannot by contract hamper its freedom of action in matters which concern the welfare of the state, and so an undertaking about how it will exercise a discretionary executive power in the future is not a contract enforceable by an action for damages.
• A statement made by officials about the intended exercise of an executive discretion is, without more, an expression of present intention or policy, not a contract.

Key reasoning

• The decision to detain or release vessels was an exercise of governmental power in the public interest that could vary with the needs of the state, and the court would not treat an assurance as if it permanently fixed that power.
• To treat the assurance as a contract would amount to treating the government as bound to refrain from exercising its executive functions in a manner it might later judge necessary.

Where it fits in the module

For FHS Administrative Law, The Amphitrite is the foundation of the topic on contracts that conflict with other public policies and executive necessity. It raises the question whether public authorities can validly bind themselves by contract, how this sits with their powers to contract, and how courts reconcile commercial certainty with the need to preserve the freedom to exercise statutory or executive powers. Students should be able to argue how much of it survives in light of modern approaches to legitimate expectation and statutory power to contract.

Criticisms

• The executive necessity doctrine is vague, since almost every contract with government limits what it can later do, and the court gave no clear criteria for when a promise is unenforceable.
• It leaves private parties without a remedy where they have relied on a government assurance, which is unfair and may deter dealings with public bodies.
• Later authority has confined it, treating the rule as limited to cases where a contract would prevent the exercise of a power conferred for the public interest, so the statement in the case is wider than the law now accepts.
• The case treats the Crown as possessing a general freedom from contractual restraint, which sits awkwardly with the principle that the executive is subject to the same legal rules as other contracting parties.