The Doctrine of Ultra Vires

When does a government decision become unlawful? Understanding ultra vires.

Most people assume that if a government department, regulator, or minister makes a decision, they must obviously have the legal authority to do so. But, unfortunately, that’s not always the case. 

Government decision-makers don’t have unlimited powers. They can only act within the authority granted to them by legislation and must exercise those powers according to the law. When they step outside those limits, the decision is described as ultra vires. which is a Latin phrase that means ‘beyond the power’. 

This article explains what ultra vires means, where it applies and why it plays an important role in protecting the rule of law.

The doctrine of ultra vires

A law or legal decision that is made without the legal power to do so is described as ultra vires. This doctrine is most relevant to constitutional law, administrative law and corporate law, and its goal is to make sure that laws that are made are made legally and are not an abuse of power. 

At its heart, the doctrine exists to ensure that nobody is above the law. Parliament can only make laws within the powers granted by the Constitution. Government departments, regulators and public officials can only exercise the powers Parliament has given them. And in the same way, companies and their directors must act within the authority conferred by their governing documents and the law. When those limits are exceeded, the action may be challenged as ultra vires.

In this way, the doctrine of ultra vires helps maintain the rule of law by ensuring that legal powers are exercised only by those who have them, and only in the way the law permits.

Examples of ultra vires in Australian law?

The doctrine of ultra vires can come up in a number of different legal contexts. Although the underlying principle is always the same – that a person or body has acted beyond their legal authority – the way it applies differs depending on who made the decision.

• Federal Parliament. The Australian Constitution limits the matters on which the Commonwealth Parliament can make laws. If Parliament passes legislation outside those constitutional powers, the High Court may declare that law invalid.

• State governments. State parliaments must also act within the powers granted to them under their respective state constitutions. If legislation exceeds those powers, it may be challenged as ultra vires.

• Companies and organisations. The doctrine also applies in corporate law. A company or its directors may act ultra vires if they exercise powers they do not have or fail to comply with the procedures set out in the company’s constitution or other governing documents.

While these examples arise in different areas of law, they all reflect the same underlying principle: legal power has limits. Whether it’s Parliament making laws, a government department making decisions or a company exercising its corporate powers, the law requires those powers to be exercised within clearly defined boundaries.

Most people will never need to challenge an Act of Parliament or become involved in a corporate ultra vires dispute, but this is a principle that affects all Australians because it ensures that governments, public authorities and organisations can’t simply do as they please but must act only with the power the law gives them. 

What if a government decision goes beyond the law?

If a government department or agency acts beyond the powers granted to it by legislation, a person affected by that decision may be able to apply for judicial review.

Judicial review is a legal process that allows a court to examine whether a government decision was made lawfully. Rather than deciding whether the decision was fair or whether a better decision could have been made, the court considers whether the decision-maker acted within the powers given to them by law and followed the correct legal process.

If the court finds the decision was ultra vires, it may set the decision aside and require the government department or agency to reconsider the matter according to the law.

Because strict time limits often apply, it’s important to seek legal advice as soon as possible if you think a government decision may have exceeded the decision-maker’s legal authority.

Corporate ultra vires

The doctrine of ultra vires also applies in corporate law. In this case, companies and their directors can only exercise the powers given to them by the company’s own constitution and the law in general, and if they act outside of it, that is an ultra vires act.

For example, a company may act ultra vires if it appoints directors without following the procedures and approvals set out in its constitution. Another example is if company resources are used for unauthorised purposes or directors use company assets for personal benefit. 

If a company or its directors act beyond their legal powers, the available remedies will depend on the circumstances and the nature of the breach.

A court may declare the act invalid, set aside the transaction or order the company or its directors to comply with the company’s constitution or the law. In some cases, directors may also face personal liability for breaching their legal duties.

Constitutional ultra vires

Ultra vires also plays an important role in constitutional law by ensuring that Parliament acts within the powers granted by the Australian Constitution.

If legislation is challenged, the High Court considers whether Parliament had the constitutional authority to make that law. If it did not, the law may be declared invalid.

Recent examples include the High Court finding that:

• provisions of the Australian Citizenship Act 2007 allowing the executive government to revoke Australian citizenship in certain circumstances were constitutionally invalid; and 
• the indefinite detention of certain non-citizens under the Migration Act 1958 was unlawful where there was no real prospect of their removal from Australia. 

While most Australians will never challenge a law in the High Court, these decisions demonstrate an important constitutional principle: even Parliament and the executive government must act within the limits of the law. No person or institution has unlimited legal power.

Reach out for legal support

If you believe a government department, public authority or another organisation has acted beyond its legal powers, it’s important to understand your rights and the legal options available to you.

The team at Armstrong Legal can advise whether a decision or action may be ultra vires, explain whether it can be challenged and guide you through the most appropriate course of action. Whether you’re considering judicial review or need advice about another area of public or administrative law, we’re here to help.

Contact Armstrong Legal today to discuss your circumstances and obtain practical legal advice tailored to your situation.