R v Secretary of State for Foreign and Commonwealth Affairs, ex p World Development Movement Ltd

Facts

The government had committed to provide about 234 million pounds of aid for the Pergau hydro-electric project in Malaysia under section 1 of the Overseas Development and Co-operation Act 1980, which empowers the Secretary of State to give aid for the purpose of promoting the development or maintaining the economy of a country. Officials of the Overseas Development Administration had advised that the project was not economically sound and a poor use of aid money. The Foreign Secretary nevertheless approved the funding, taking account of wider considerations in the relationship with Malaysia. The World Development Movement, a pressure group concerned with the effectiveness of aid, applied for judicial review.

Issue

Whether the World Development Movement had a sufficient interest to apply for judicial review under section 31(3) of the Supreme Court Act 1981 (now the Senior Courts Act 1981); and whether the decision to grant aid was within the statutory purpose of promoting development.

Held

The application succeeded. The organisation had a sufficient interest, and the Foreign Secretary's decision to fund the Pergau project was unlawful because it was not made for the statutory purpose of promoting development where the project was economically unsound; a declaration was granted.

Ratio

• Sufficient interest is decided in the legal and factual context of the case, taking into account the importance of vindicating the rule of law, the importance of the issue, the likely absence of any other responsible challenger, the nature of the alleged breach, and the prominent role of the applicant in giving advice and assistance on the subject.
• A power to grant aid for the purpose of promoting development may be exercised only for that purpose, and a decision to fund a project which is not economically sound cannot be justified as promoting development merely because it serves other political considerations.

The judgments

Key reasoning

• Following the approach in R v Inland Revenue Commissioners, ex p National Federation of Self-Employed and Small Businesses Ltd [1982] AC 617, sufficient interest is not decided in the abstract but together with the merits of the complaint, so that serious illegality in the use of public money by a minister may support standing for a body with real expertise.
• If the organisation were denied standing, the alleged illegality would probably go unchallenged, since there was no other person with a direct interest in the decision.
• The 1980 Act limited the minister's power to aid for a development purpose; economic soundness was an essential part of whether the aid would promote development, and the minister could not rely on the political advantages of honouring the commitment to treat an uneconomic project as development.

Where it fits in the module

On the FHS Administrative Law list as a starred case on section 31(3) of the Senior Courts Act 1981 and standing. It is the standard illustration of the mixed approach in the National Federation case, where the sufficiency of interest is assessed with the merits, and of public interest standing for representative bodies. It invites comparison with R v Secretary of State for the Environment, ex p Rose Theatre Trust Co [1990] 1 QB 504, with AXA General Insurance Ltd v Lord Advocate [2011] UKSC 46 and R (Walton) v Scottish Ministers [2012] UKSC 44, and with the debate between a rule-of-law rationale for generous standing and fears about busybodies and judicial involvement in political disputes.

Criticisms

• The list of factors bearing on standing gives no priority among them, and because standing is assessed together with the merits the outcome is driven by the court's view of the seriousness of the illegality, which collapses the threshold into the merits.
• The merits reasoning made the court the judge of the economic soundness of an aid project, a matter of policy and public finance with a significant political context, which raises separation of powers concerns about the court's institutional competence.
• A generous approach to standing can make the courts arbiters of disputes between government and campaigning groups, with little to show that the groups represent the interests of the persons affected.