The Doctrine of Ultra Vires

A law or legal decision that is made without the legal power to make it is ultra vires. This page deals with the doctrine of ultra vires and how it is applied in several different areas of law.

What is ultra vires?

Ultra vires is Latin for ‘beyond the power’. The opposite is intra vires, which means ‘within the power.’

The doctrine is most relevant to constitutional law, administrative law and corporate law.

The doctrine of ultra vires ensures that laws are made legally and are not an abuse of power. It also ensures that government agencies do not exceed the powers that have been delegated to them, and that corporations act within their powers.

What laws and acts may be ultra vires?

A law made by the federal government may be ultra vires if it goes beyond the lawmaking powers that the Australian Constitution confers on the federal government.

A law made by a state government may be ultra vires if it is outside of the powers conferred on the state parliament by the constitution of that state.

A decision by a government decision-maker may be ultra vires if it goes beyond the powers that the decision-maker has been delegated or is made in a way other than the way the decision-maker is required by law to make decisions.

An act done by a corporation may be ultra vires if the corporation’s constitution does not give the company or its directors the power to do the act, or if the act was done in a way that did not comply with procedures set out in the company’s authorizing document.

Judicial review

In some circumstances, a person affected by the decision of a government department or agency can apply for judicial review of that decision on the basis that the decision is ultra vires. In judicial review, a decision may be found to be ultra vires for two different reasons.

Firstly, the decision may be outside the scope of the powers that have been delegated to the decision-maker. This is known as substantive ultra vires. An example is where a decision-maker dd not have the power to make the decision because the matter did not fall within its jurisdiction.

Secondly, the decision-maker may have failed to follow the correct procedures when making the decision. This is known as procedural ultra vires. Examples are where the decision-maker failed to give a person procedural fairness, took into account irrelevant material or failed to take into account relevant material.

Types of ultra vires administrative decisions

In administrative law, a decision may be found to have been made unlawfully for many reasons, including:

• that the decision is so unreasonable that no reasonable decision-maker would have made it;
• the decision was based on findings of fact for which there was no evidence;
• the decision-maker exercised a power for an improper purpose;
• the decision represents an inflexible application of policy;
• the decision-maker did not observe procedures it was required by law to observe.

Corporate law

In corporate law, ultra vires refers to acts that are beyond the powers conferred on a corporation or organization.

When a company does an act that is ultra vires, this can have serious consequences for the company and its shareholders. It can leave the company vulnerable to legal proceedings.

Examples of corporate acts that may be ultra vires are:

• the appointment of directors in a way that does not follow the procedures set out in the company’s constitution;
• the use of resources for purposes for which they are not intended;
• the use of company assets or funds by directors for their personal needs.

Constitutional law

The High Court has original jurisdiction to hear constitutional matters. When this occurs, the court reviews whether an act, decision or law was made within the powers conferred on parliament by the Constitution.

When a party challenges a decision on the basis that it was outside the power conferred by the Constitution, the court must consider what Constitutional power the decision or law was made under and whether it was made within the limits of that power.

The High Court has recently found the following to be ultra vires:

• section 36B of the Australian Citizenship Act 2007, on the basis that it contravened Ch III of the Constitution
• the indefinite detention of non-citizens under the Migration Act 1958 in cases where there was no real prospect of the person’s removal from the country in the foreseeable future, also on the basis that the practice contravened Ch III of the Constitution.

If you require legal advice or representation in any legal matter, please contact Armstrong Legal.