Case Number

CA 311/57

Date Decided

7-5-1959

Decision Type

Appellate

Document Type

Full Opinion

Abstract

Three different rates of exchange were introduced as a result of the variation of the official rate of exchange of lsraeli currency in 1952. The rate applicable to shipping matters necessitated an increase in the charges for port services, including those for Israel shipping, in order to avoid the charge of discrimination in favour of such shipping. The excess earnings made by the port service companies in respect of Israel shipping was, at first by agreement and later by Order, made transferable to the Ministry of Finance. The respondent resisted this arrangement in respect of its own Israel ships and refused to pay the transferable amount. The Order embodying the arrangement was given retrospective effect but as a result of doubts as to the adequacy of the Order the authorities published a Defence Regulations Order. The respondent persisted in its refusal to pay the Ministry's portion of the port charges due from it. Instead the lighterage company involved assigned the debt of the respondent to the Government which unsuccessfully sued the respondent, the District Court rejecting the Government's claim on the grounds that the retrospective effect of the Defence Regulations Order and the new scales payable thereunder was not binding.

Held: The Ports' Ordinance under which the Ports' Order was made contains no express prohibition upon giving retroactive force to any Order made thereunder. References to retroactivity in the Ordinance did not touch the subject matter of the Ports' Order. Notwithstanding the views sometimes expressed in English case law, there was no reason in principle for distinguishing between delegated legislation of the type of the Ports' Order and local authority bye-laws, when it came to testing the validity thereof. The question of reasonableness is one aspect of excess of authority and, therefore, there can and ought to be a close parallel in the manner of judicial scrutiny of all types of delegated legislation. All the various tests employed-unreasonableness, lack of good faith, having regard to improper considerations, extraneous objects-are merely different forms of testing excess of authority or abuse of power. In the instant case, the retroactive force given to the obligation to pay the increased charges was not in the circumstances unreasonable by itself. It did not constitute an invasion of the contractual relations between the parties, since any rate that was imposed depended upon the law and not upon the bargaining powers of the parties. The period of one and a half years of retroactivity was, however, unreasonable since it involved reopening transactions wholly completed. Likewise, the contributions to the Ministry of Finance were unreasonable since they constituted an indirect and camouflaged collection of an impost which had nothing in common with the purpose of the legislature when it authorised the fixing of port charges.

Keywords

Legislation -- Retroactivity

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