C.A. 311/57

ATTORNEY-GENERAL

v.

M. DIZENGOFF & CO. (NAVIGATION)  LTD. In the Supreme Court sitting as a Court of Civil Appeal

Goitein J., Landau J. and Berinson J..

Administrative Law-Retroactivity of subordinate  legislation-Regula­ tions imposing lighterage charges and contributions to the Ministry of Finance-Analogy with local authority bye-laws and other delegated legislation-Criteria of reasonableness and legislative intention-In­ validity on grounds of ultra vires, lack of good faith, extraneous considera­ tions and abuse of power-Ports Ordinance-Ports (Lighterage Charges) Order, 1953-Interpretation Ordinance.

Three different rates of exchange were introduced as a result of the variation of the official rate of exchange oflsraeli 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 trans­ ferable 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' Ord_er. 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

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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

l                                   purpose of the legislature when it authorised the fixing of port charges.

Palestinian cases referred to :

1. Cr. A. 69/38-Attorney-General  v.  Rousseau,  Ticket  Cashier of the  Tel-Aviv  Service, Jerusalem (1938)  2  S.C.J. 43;  (1938)  4 C.L.R. 233.
2. Misdemeanour Appeal 18/28-Attorney-General v. Abraham Alt­ shuler (1920-1933) 1 P.L.R. 283; (1919-1933) 4 C.O.J. 1314.
3. Cr. A. 5/46 Tel-Aviv-Hassia Trachtenberg v. Attorney-General

(1946) S.C.D.C. 447.

4. Cr. Leave Application 26/47 Haifa-Sami Abdalla Bahaj v. Attorney General (1947) S.C.D.C. 225.

Israel cases referred to :

5. H.C. 21/51-N. Binenbaum and others v. Tel-Aviv Municipality

(1952) 6 P.D. 375.

6. C.A. 10/55-"El-Al" Israel Air Lines Ltd. v. Mayor of Tel-Aviv­ Jaffa and others (1956) 10 P.D. 1586.
7. C.A. 43/53-Kfar Ata Local Council v. "Ata" Textile Company Ltd (1955) 9 P.D. 869.
8. H.C. 98/54; 105/54-Eugen Lazarovitz and Saada George Saad v. Food Controller ( Avinoam Halevi) Jerusalem (1956) 10 P.D. 40.
9. H.C. 72/55, 117/55-Siegfried Freidy and Shmuel Mendelson

and others v. Tel-Aviv Municipality and others (1956) 10 P.D. 734.

10. H.C. 129/57-Michel Ben Kosta v. Minister of Interior and others

(1958) 12 P.D. 209 (infra p. 10).

11. Cr.  A.  247/55-Sharlo  Ben-Bassat   v.  Attorney-Genera/  (1956) 10 P.D. 716.
12. C.A. 222/56-Mayor, Councillors and Townsmen of Ho/on Munici­ pality v. Zelig Shwartz (1957) 11 P.D. 214.
13. Cr. C. 91/55 Jerusalem-Attorney-General v. Sharlo Ben-Bassat

(1955) 11 P.M. 46.

14. C.A. 55/51 Haifa-Yoqneam Local Council  v.  Dr.  Manfred Meir Lehman (1952-53) 8 P.M. 34.
15. C.C. 1143/57 Tel-Aviv-Citrus Marketing Partnership (Shoham Agency) v. Tel-Aviv-Jaffa Municipality and others (1958) 15P.M.39.

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16. C.C. 48/53 Jerusalem-Jerusalem Municipality and others v. Yihye ben Yihye Kahah (1955) 10 P.M. 58.
17. C.C. 121/53 Jerusalem-Jerusalem Municipality v. Rahamim A. Israelin and others (1955) 10 P.M. 98.
18. C.A. 261/55-Tel-Aviv-Holon Municipality v. Zelig  Shwartz. Real Estate Agent, Ho/on (1956) 12 P.M. 240.

English cases referred to:

19. Harrison v. Stickney and others (1858) 9 E.R. 1033.
20. Associated Provincial Picture Houses, Ltd. v. Wednesbury Cor­ poration [1948] 1 K.B. 223; [1947] 2 All E.R. 680.
21. Attorney-General for Alberta v. Attorney-General  for  Canada and others [1939] A.C. 117.
22. Berney v. Attorney-Genera/(1947) l76L.T. 377.
23. Kruse v. Johnson [i898] 2 Q.B.D. 91.
24. Sparks v. Edward Ash, Ltd. [1943] 1 K.B. 223; I All E.R. l.
25. Taylor v. Brighton Borough Council [1947] 1 K.B. 736.
26. Short v. Poole Corporation [1926] Ch. 66. Australian case referred to :
27. Arthur Yates and Co. Pty. Ltd. v. The Vegetable Seeds Committee (1945) 72 C.L.R. 37, cited in Keir and Lawson, Cases in Con­ stitutional Law, 4th Edition, Oxford, 1954, pp. 299-312.

Gillon, State Attorney, and  Weiss,  Deputy  State  Attorney,  for the appellant.

Firon and Bar-Navan for the respond nt.

BERINSON J. The only question which arises in this appeal is the retroactive effect of the Ports' (Lighterage Charges) Order, 195 , which fixed higher tariffs for lighterage in the ports of the country for a period antedating the publication of the Order. The Order was published  on May 14, 1953 and it contains  higher  tariffs  for  two  earlier  periods: one from July 1, 1951 to February 13, 1952, and the other for the period commencing February 14, 1952. Of the latter period,  the  interval  of time between February 14, 1952 and May 14, 1953 is of interest to us.

The principal facts are these. On February 14, 1952, a change occurred in the official rate of exchange of the Israel Lira. Up to then there had been one rate of exchange of 2.8 U.S. dollars to the Lira.  On that date, three rates of exchange were introduced, namely, Rate A-2.8 U.S. dollars to the Lira, Rate B-1.4 U.S. dollars to the Lira,  and Rate C-1 dollar to the Lira. Rate C was fixed for shipping. As a

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consequence of this variation in the rate of exchange, Treasury officials found it necessary to introduce changes in the existing scale of lighterage charges in the ports of the country, and this mainly in order to ensure that the amounts theretofore paid by foreign companies in foreign currency should continue to be paid notwithstanding the new exchange rate. But in order, on the one hand, to avoid a charge of discrimination in favour of Israel ships by foreign shipping companies and, on the other hand, to absorb the increased profits which would accrue without justification to i division of Savar Co. Ltd., which provided lighterage services in the port of Haifa, it was decided to introduce a new uniform tariff 2.8 times higher than the preceding one, in respect of all ships, foreign as well as Israel. Along with this it was agreed that the difference in income between the previous and new tariffs, after deducting a definite amount which was approved as the increase for Savar Co. Ltd., should be transferred by the latter to the Treasury. The different shipping companies and their agents in Haifa accepted this agreement and acted

"                            accordingly,  except that  the respondents  resisted it  to some extent.  As

agents for foreign ships they paid the increased lighterage  charges in full, but as owners of Israel ships they agreed to pay and paid only the increase which had been approved for Savar Co.  Ltd.  but  refused  to pay the remaining sums intended for the Treasury  on  the ground  that the demand of these sums was illegal.

This arrangement was put into operation without any legal for­ mality. Only on May 14, 1953 was this omission supplied by the publica­ tion of the Ports' Order which purported, as I have indicated, to fix increased lighterage charges retrospectively. The respondents were not deterred and continued to  be  refractory.  When  doubts  apparently  arose in the minds of the competent government authorities whether the Ports' Order was adequate for achieving its avowed purpose, a Defence Order was also issued pursuant to Regulation 46 (b) of the Defence Regulations, 1939, directed to the Savar Co., Ltd. ordering it  to accept for its lighterage services the amounts fixed by the Ports' Order in force retrospectively from February 14, 1952, and to remit thereout to the Treasury certain designated sums. The  respondents  did  not  retreat  from their position even after the issue of the Defence Order, with the result that they continued to owe Savar Co. Ltd. substantial sums.

That company was not interested in litigating  wit  the  respondents about the money earmarked for the Treasury and accordingly  assigned its rights to the  Government  of Israel,  notice to  this effect  being sent to the respondents. Since these sums have not been paid, the present action was commenced.

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Counsel for the defendant respondent endeavoured to upset the claim by a number of different arguments, but all of them were rejected except for two which were decided in its favour. It was held that the retroactive force given to the said Defence Order .and  to the new scale  of lighterage charges in the Ports Order was not binding and the action failed for this twofold reason. The learned State Attorney agreed before us that the Defence Order directed by a competent  authority  to  the Savar Co. Ltd. could impose no  obligations  upon  other  persons  and for this reason could n t serve as grounds for an action against the respondent, and he concentrated his criticism upon that part of the decision which related to the lack of retroactive force of the lighterage charges fixed by the Ports Order.

The question of the retroactive force  of  secondary  legislation  is not new to us. It has been dealt with a number of times in our courts in connection with local council bye-laws which purported  to  impose taxes, fees or other payments retrospectively. These decisions have established the principle  that  generally  such  secondary  legislation with retrospective application is not proscribed but is  to  be tested  by the acc_epted criterion with reference to bye-laws, i.e., by the test of reasonableness. In the leading  case  of  Binenbaum  v.  Municipality  of Tel Aviv (5), Agranat J. says (at pp. 385-6):

"We have found  no  legal  authority  which  declares that in no event is it permissible for a local authority to give retroactive force to a bye-law enacted by it, and it is our opinion that in law this matter  also,  like that  of  the effect of bye-laws generally, is always to be tested by the standard whether the retrospective provision is unreasonable or unacceptable."

"There is no rule which prohibits a retrospective rate. That  depends  upon  the  intention  of  the  legislature  and the question is whether· the Law under which each rate is made does so expressly or impliedly."

This rule, which was laid down by Baron Parke in the case of Harrison v. Stickney (19), was cited with approval by Agranat J. in the Binenbaum case.

"What requires to be made out is not the permission but the prohibition to levy a retrospective tax (by a local authority)" :

El Al v. Municipality of Tel-Aviv-Jaffa (6); and see also Local Council

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of Kjar Ata v. Ata Ltd. (7) in which no irregularity was found in the imposition retrospectively of a fee for a service rendered by a local authority, in the absence of any prohibition in the Order pursuant to whicli the fee was imposed.

These rules were established in cases with reference to bye-laws enacted by local authorities for the collection of taxes,  fees or  other local payments, but I see no reason, and none was brought to our attention, why they should not be equally applicable with reference to any other kind of delegated legislation prescribing government or other compulsory payments.

The next question is whether anything can be learned from the provisions of the Ports Ordinance, under sec. 10(1) of which the Ports Order was made, about the existence of a prohibition on the retroactivity of the Order. There is no express prohibition, but is it to be implied.

-  Notwithstanding  Mr.  Firon's  interesting  arguments,  I   have  come to the conclusion that no such prohibition can  be spelled  out from the provision of the Ordinance.

In the first place, Mr. Firon argued, the fact that sub-secs. 3(b), 3(c) and 3(d) expressly mention the question of retroactivity shows that the legislator was not oblivious to this problem and even if he passed it over in silence in sec. 10, he did not wish lighterage charges to be fixed with retrospective effect. I am not persuaded by this argu­ ment. These subsections were added to the original Ordinance  of 1926 by Ordinance No. 44 of 1946, after the Government of the time had recognized the independent existence and separate administration of the Port of Tel-Aviv by Jewish public bodies and it became necessary to place certain acts of the Government Port Authority with regard to this port on a legal basis, as appears from the official explanatory notes which accompanied the draft of the Ordinance of 1946. The fact that for this purpose the legislator directed his attention to the matter of retroactivity in so far as it was necessary to achieve this special purpose, does not prove that he intended at the same time to deny the possibility of making retroactive use of other provisions of the Ordinance which were originally part of it. From a positive regarding the new provisions you may not infer a negative regarding the early provisions.

Mr. Firon argued secondly that sub-secs. 10(2) and 10(3) of the Ordinance, when read together with sub-secs. 15(1) (a) and 15(1) (g), patently demonstrated the intention to establish rates for lighterage services which were to be rendered in the future and  not  for  those which had already been rendered. Sub-sec. 10(2) requires anyone

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in charge of a  vessel which  renders a service in port for which a rate  has been fixed to keep a copy of the rates available and to produce it upon demand to anyone who receives the service or to the customs officials or police. The question then arises-when a rate is later fixed retrospectively, how can these duties be carried out literally with regard to a period of time which has already passed? We must not forget that under sub-sec. 15(1) (g) non-compliance with any provision in the Ordinance constitutes a criminal offence. The same applies to the collection of the charge for the service. If after a while a rate is fixed different from the one which has existed for some time, how is it possible lawfully to carry out in respect of that time, the provision found in sub­ sec. l0(3) that no charge is to be collected other than  the one author­  ised by the rate then actually in force? Here also the collection of a payment higher than the one fixed by the rate in force at the time con­ stitutes an offence under sub-sec. 15(1) (a).

It seems to me that it is possible to answer  the  questions  which Mr. Firon has put to us. The new rate comes into being and takes effect upon the publication of the Order prescribing it. Only then do  the various duties arise  with  regard  to  having  available  and  producing the new rate and the collection of the charges for the services prescribed therein for any past period and until then non-compliance with these duties is not to be regarded as an offence. In other words, as long as the new rate has not been published, although it relates to a period already past, the duty to keep and produce a copy of it and to act in accordance therewith, does not arise, and a person carries out his duties  in  the matter by fulfilling them in  respect  of  the  past  period  from  the date of publication of the new rates and thereafter. In this respect, the Ports Order is phrased in a special form. It provides that fees shall be paid for lighterage services in accordance with those set  out  in  the Schedule, and the Schedule specifies the higher payments payable for the past periods. The order does not provide that the new rates should be regarded as if they had also been in force in the past. It merely creates an obligation for the future in respect of the past. Mr. Firon's questions do not, therefore, in fact arise.

The conclusion, then, is that the Ports Ordinance does not preclude the fixing of retrospective rates and in this regard there is nothing objectionable in the Ports (Lighterage Charges) Order, 1953.

But is not the retroactivity of the Order ultra vires or otherwise invalid? Is not this a case oflack of good faith, or an exercise of authority in an unreasonable manner or for an extraneous purpose? Generally,

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j                                                                                  any one of these is sufficient to invalidate an act of an administrative

j                                                                                     body. I have said "any one of these", but we must not lose sight of the fact that the truth of the  matter  is  that  the  lines  of  demarcation  are far from clear and well-defined, and  they  overlap  considerably,  as Lord Greene M.R. explained at length in Associated Provincial Picture House Ltd. v. Wednesbury Corp. (20). I shall have occasion to revert to this case when I deal in detail with the test of reasonableness.

Before that, there is another preliminary question to be answered. Is it generally a matter for the court to examine the legislation of an administrative body from these aspects, and has it the power to in­ invalidate this legislation should such a flaw be found? As far as ex­ traneous purpose is concerned, a clear answer was given in Lazarovitz

v. Food Controller (8), where it was said at p. 47 that-

"This court may certainly interfere upon the application of an injured person and also invalidate legislative provisions of the authorities promulgated under statutory power, not only for reasons of formally exceeding the strict letter of the Law conferring the power, but also (or other  reasons,  such as impro_per motive, or use of the power for a purpose unrelated to the matter."

Thus, a bye-law of the Municipality of Tel-Aviv was later invalidated by this court for the reason that "a body having the power to enact secondary legislation of a local character must not be enabled to settle religious problems under the guise of regulating the sale of meat in a particular place": Freidy v. Municipality of Tel-Aviv-Jaffa (9).

The very same has  been  done  by the Privy  Council  in  England in deciding more than once to invalidate Laws of the provincial parlia­ ments in Canada, which although dealing with subjects and matters within their formal jurisdiction were exploited for attaining an unrelated purpose: A.G.for Alberta v. A.G.for  Canada  (21), where it was said (at p. 130):

"It is not competent either for the Dominion or a Province under the guise or the pretence, or in the form of an exercise of its own powers, to carry out an object which is beyond its powers, and a trespass on the exclusive powers of the other."

At this point I think it is proper to quote the words of Lord Goddard

L.C.J. (spoken, it is true, obiter) in the case of Berney v. A.G. (22) (at pp. 381-382), which point  out  that a change or  distortion of purpose

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by a government body in delegated legislation made by it, is simply excess of authority:

"It may be, though it is not necessary to decide it, that if the competent authority, in this case a government depart­ ment, uses the powers given by an order made under a Defence Regulation for some purposes wholly unconnected with the regulation or under the order, they could not justify their action under the regulation or under the order, as the answer would be that they were not ac ing under it."

In Canada, South Africa, India and Australia, the courts act according to this principle, as was explained, with numerous precedents from these countries, in the Austra}ian decision of Yates  v. Vegetable Seed Committee (27), passages of which are quoted in Keir and Lawson, Cases in Constitutional Law (4th ed.) pp. 299-312.  In  the  Lazarovitz case above, the question whether administrative legislation is to be subjected to the test of  reasonableness did  not  arise. But in  the course of a general and comprehensive analysis of the topic of judicial inter­ ference with the action of public officials and bodies, the following was said in passing on this question (at p. 51):

"We have already seen that the degree of necessity of a certain act by an authorised  body,  the decision  as to which is committed to its discretion, is no concern of the court, which will uphold the act if done in good faith. It  would seem that the court will not,  in  like manner,  inquire  into the degree of efficacy or reasonableness of such an act, with the exception of the test of reasonableness of  bye-laws: Kruse v. Johnson (23)."

In two cases, Sparks v. Edward Ash Ltd. (24) and Taylor v. Brighton Borough Council (25), the court expressed its opinion that it was not within its jurisdiction at all to examine the question of the reasonableness of legislative acts of a competent-authority, although in both cases the court dealt with the question on the merits and reached the general view that the legislative act concerned was not unreasonable.

In the Sparks case it was argued that certain regulations issued by the Minister of Transport for regulating traffic at pedestrian crossings were so burdensome and absurd as to be unreasonable and invalid. Scott L.J. who dealt with this question at length considered first the meaning of the concept of unreasonableness which may invalidate delegated legislation, in view of the norms laid down in the well known case of Kruse v. Johnson (23) and then he added (at pp. 229-30):

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"If it is the duty of the courts to recognize and trust the discretion of local authorities, much more must it be so in the case of a minister directly responsible to Parliament and entrusted by the constitution with the function of administer­ ing the dep1:1rtment to which the relevant field of national activity is re itted. Over and above these grounds for trusting to that minister's constitutional discretion is the further con­ sideration that these regulations have to be laid on the table  of both Houses...and can be annulled in the usual way.

For tp.e above reasons, this court  has, in  my opinion, no power to declare these two regulations invalid for un­ reasonableness, certainly not on any ground submitted in argument before us."

1                                                                    The last phrase "certainly not on any ground submitted in argument

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I                         before us"  does,  nonetheless, contain an intimation  that  possibly  other

Ii                                  grounds  for  establishing  unreasonableness  could  have  been advanced

to invalidate the regulations.

Similarly, in the Taylor case (25)  referred  to  in  the  Lazarovitz  case (8), the court considered a proposed provision which the Brighton Borough Council intended to insert in its town planning scheme, under which the erection of a fun fair within the planning area without the consent of the council would be forbidden. A landowner who was about to put up such a fun fair upon his land argued inter alia that it was not within the power of the council so to provide, since it had to exercise the discretion which had been given to it in this matter in a reasonable manner. Lord  Greene  M.R.,  answered  this  argument  (at  pp.  748-9) as follows:

"It was said that some restriction ought to be read into the language of the Act prohibiting this particular provision on some principle of what is called reasonableness and that a delegated power such as this must be used reasonably rather on the same principle as the power to make a by-law. In my judgment, the analogy of the by-law, even if it could carry the appellant as far as suggested, is quite out of place in the present circumstances. We are dealing with a totally different class of subject-matter and one in which the ultimate arbiter is the Minister himself. In my judgment, not only does the argument of unreasonableness break down on the facts, but the attempt made is to introduce it into a subject-matter for which it was never designed."

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On the other hand, Wrottesley L.J., who merely added one short paragraph, did not reject the test of reasonableness as such but construed it in the accepted manner in the following words:

"As to the last matter, if what is sought to be introduced under the heading of reasonableness is that the use of the power must be reasonable in the opinion of judges of the High Court, I think that argument is not well founded."

It is, therefore, possible to sum up the situation by saying that the attempts which have been made in English courts to prove that certain administrative actions of a legislative character are  unreasonable  and for that reason invalid, have not succeeded and the opinion has been expressed not once in the course of dealing with the problem that such legislative action, as distinguished from bye-laws which may be declared invalid for unreasonableness, is not subject to the test of  reasonableness.

As far as I know, no case has yet occurred in this country in which the court has been asked to put an act of administrative legislation, not a bye-law of a local authority, to the test of reasonableness, except one extraordinary instance in this court in the period of the Mandate, Attor­ ney-General v. Rousseau (1), and another case in the  Haifa  District Court, which was cited by way of dissent by Judge Lamm in Citrus Marketing Partnership v. The Municipality of Tel-Aviv-Jaffa (15).

As for municipal bye-laws, I summarized my views about a year ago in Kosta v. Minister of the Interior (10). I still believe in the correct­ ness of what I said there, and I take the liberty of stating here the sub­ stance of my views:

"The many decisions given by the courts in this country since the establishment of the State, as well as during the period of the Mandate, which have dealt with this question, have almost always and consistently proceeded upon the assumption that the test of reasonableness of municipal bye-laws which prevails in this country is in accordance with the rules laid down in the leading English case of Kruse v. Johnson (1898) (23), which they have followed in practice...

During the period of the Mandate this question was in fact decided in several judgments in which municipal bye­ laws were held to be invalid on account of unreasonableness...

Since the establishment of the State no municipal bye­ law has indeed been invalidated for unreasonableness (and,

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as we are told, neither for excess of authority), but the question has arisen more than once and the courts generally have regarded themselves competent to decide it and deny validity to such a bye-law, even though, as we know, this will in practice be done only in rare and very extreme cases, especially when the bye-laws of an elected body are involved, bye-laws which should be:: supported, if possible.-They ought to be, as has been said, 'benevolently interpreted.'"

Although Baker J., the Relieving President of the District Court of Jerusalem, came to the opposite conclusion i Attorney-General v. Ben­ Bassat (13), viz., that the courts in this country  do  not  need  to  resort to the test of the reasonablenessof the bye-laws of elected local authorities which receiv the approval of  a  Minister  a thorized  for  that  purpose and are subject to the scrutiny of the Knesset, and  in an  appeal from  that judgment this court avoided a decision on the question as being unnecessary ( Ben-Bassat v. Attorney-General (11)), the prevailing opin­ ion of those District Judges who have had an opportunity to give their views on the subject in recent years, including my honourable colleague Witkon J. (when still a District Judge), is to the contrary  and accords with my own view as above stated. See Yoqneam Local Council v. Lehman (14); Municipality of Jerusalem v. Kahah (16); Municipality of Jerusalem v. /sraelin (17), Municipality of Ho/on v. Shwartz (18); Citrus Marketing Partnership v. Municipality of Tel-Aviv-Jaffa (15); and to the same effect Cohen J. of Haifa in the present  case. Some of them, such as Lamm J. in the Citrus Marketing Partnership case and Cohen J. in the present case, have even clearly stated their opinion that this test applies generally to all kinds of delegated legislation.

I also see no reason for distinguishing in this respect between municipal bye-laws anp other secondary legislation.

One of the reasons for the distinction made in England between bye-laws and other delegated legislation,  a  reason  which  was brought to the fore and specially emphasized in  the  judgment  of Scott  L.J. in the Sparks case (24), is that delegated legislation in the form of regulations enacted by virtue of a provision in an Act of Parliament must be laid before both Houses of Parliament and may be invalidated in the usual manner-a  procedure  which  is  non-,existent   here.   In  some  respects it is possible then to  regard  such  delegated  legislation  which  is  not set aside by Parliament as having indirectly received tacit Parliamentary approval, which is not the case in this country. As is known, the actions of a sovereign legislature are not subject to the supervision of the courts

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at all. But I do not wish to attach undue importance to this difference of procedure between this country and England as regards secondary legislation, for I do not regard this as the crux of the matter.                ·

. As I see it, the principle is that the matter of reasonableness is essentially only one of the aspects of excess of authority. In this regard there can and ought to be a close parallel, if not an absolute identity, in the manner of scrutinizing bye-laws and other secondar legislation. Lord Russell's remarks in the case of Kruse v. Johnson (23) about the nature of the test of the reasonableness of bye-laws conclude with the following:

"But unreasonable in  what  sense?  If,  for  instance, they were found to be partial and unequal in their operation as between different classes; if they were manifestly  unjust; if they disclosed bad faith; if they involved such oppressive or gratuitous interference with  the  rights  of  those  subject to them as could find no justification in the minds of reason­ able men, the court might well say, 'Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires.'But it is in this sense, and in this sense only, as I conceive, that the question of unreasonable­ ness can properly be regarded."

Matters of unreasonableness and of excess of authority are then interconnected and, as was observed, the question of lack of reasonable­ ness can properly be raised only in the sense that Parliament never intended to grant authority for such  regt!lations.  In  that  sense, and in that sense only, is it possible, in my opini n, also to raise the question of the unreasonableness of delegated legislation of whatever kind, except in those cases where a different provision exists or where a different intention is to be inferred on the part of the primary legislator which confers the authority for delegated legislation.

I have already pointed out that the boundaries between excess of authority for reasons of unreasonableness and for other reasons are frequently blurred, and it is difficult to distinguish between them. Thus, for example, in Holon Municipality v. Shwartz (12), the District Court found the blemish of unreasonableness in a municipal bye-law, which sought to impose upon property owners an obligation to  share  in meeting the costs incurred by the Municipality for street paving several years before the enactment of the bye-law. The Supreme Court affirmed the invalidity, but where the District Court saw unreasonableness,

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the Supreme Court saw the usual excess of authority. In the case of

A.P. Picture Houses  v. Weqnesbury  Corp. (20), the complex  concept  of reasonableness with regard to action taken by an administrative authority was analysed by Lord Greene in the following instructive words (at p. 229):

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"It is true the discretion·must be exercised reasonably. Now what does that mean? Lawyers familiar with the phra­ seology commonly used in relation to exercise of statutory discretions often use the word 'unreasonable' in a rather com­ prehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting 'unreasonably'. Similarly. there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority, Warrington L.J., in Short v. Poole Corporation (26), gave the example of the red-haired teacher dismissed because she had red hair. That is unreasonable in one sense. In another sense it is taking into consideration extraneous· matters. It is so  unreasonable  that  it  might almost be described as being done in bad faith; and, in fact, all these things run into one another."

Thus, it is difficult  to  distinguish  substantially  between  the  test of reasonableness and other tests which are accepted as grounds for invalidating an administrative act, such as lack of good faith, having regard to improper considerations, achievement of an object extraneous to the matter etc., all of which are merely different forms of testing excess of authority. Probably the common descriptive term to fit  all these categories of excess of authority is what the French call "detourne­ ment de pouvoir" and the English "abuse of power".

If this is really so, then not only does the Interpretation Ordinance not stand in the way oflaying down the rule that the test ofreasonableness applies equally to all manner of delegated legislation by an administrative body, and not merely to the bye-laws oflocal authorities, but the opposite is true. The term "regulation", as defined in sec. I of the Inter-

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pretation Ordinance* does not  distinguish  between  a  bye-law  and other types of delegated legislation and if the test of reasonableness applies to one type, why should it not also apply likewise to the other types?

What does the test of reasonableness involve? If we are to reconcile the words of Lord Greene in the Associated Picture Houses case (20) with those of Lord Russel in Kruse v. Johnson  (23),  I  would  say that if the court finds that the delegated legislation is so illogical, unreasonable and intolerable that a sensible person would not conceive that a reason­ able Minister would be capable of making it,  one would  then  have to say that the legislature never intended to grant such power to the Minister. Such delegated legislation is unreasonable and ultra vires. As I have already indicated, I have found in this country one judgment of the time of the Mandate ( Attorney-General v. Rousseau (1)), in which the Supreme Court deals with the question of the force of one of the Road Transport (Routes and Tariffs) Rules which were made by the High Commissioner by virtue of the Road  Transport  Ordinance. After deciding-contrary to.the opinion of the District Court-that the rule was not ultra vires, in the sense that it was expressly covered by the Ordinance, it proceeded to deal with the question of the reasonable­ ness of the rule, saying that if it suffered from unreasonableness it would have to be set aside, but reached the conclusion that it was not unreason­ able.

It is well to emphasize again that if in interpreting local authority bye-laws the courts act with restraint and the utmost toleration and would not deny their effect because of unreasonableness except in the most extreme case, this is even more true with regard to departmental secondary legislation made by a Minister who is subject to the direct criticism of the Knesset, or by a subordinate of a Minister likewise subject through  his Minister to such criticism. One thing is beyond  all doubt, and that is that the court will not attempt to substitute its discretion for that of the competent authority nor impose its views on

• Interpretation Ordinance, sec. I :

In this Ordinance and  in every enactment  currently  in force and in every enactment  to be made hereafter each word and expression in this section shall be interpreted as hereafter stated alongside thereof...

"regulation"-regulation, rule, bye-law, proclamation, declaration, order direction, notice, announcement or other document made by every authority in Palestine or Israel... including an order, direction, notice, announcement or other document made by virtue of a regulation, rule or bye-law as aforesaid.

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those upon whom the legislature intended to rely for their understanding and logical powers, their knowledge and experience in the practical affairs of life, in short, their discretion based  on  a  thorough  know­ ledge of all aspects of the situation and the conditions which, in their opinion, demand the enactment of certain secondary  legislation  and none other.

In the course of his submissions, when t.he State Attorney was questioned by the court on the matter of reasonableness with extreme illustrations on the face of them  unacceptable  (such  as,  for  example, the retroactive prescription of rates for travelling in public transport services), he agreed that it was quite possible to apply the test of reason­ ableness to departmental delegated legislation, but  obviously  in  the most extreme cases alone. After he had time to reflect, he retracted what he had conceded in a moment of weakness. Clearly we do not wish to hold the learned State Attorney to his admission and I have only re­  called the fact in  order  to demonstrate  that  there is  much  to  be said  on the whole question and  that  one  must  not  exclude  the  possibility of cases in which unreasonable use is made of authority by a non­ sovereign legislator, including a Government department, to such an extent that the court's interference may be required.

Let us now turn to the facts and see whether  they are sufficient to rebut the presumption of the Ports Order, 1953, in point of reason­ ableness, in the above sense. From one aspect it is difficult seriously to take issue with the argument of the learned State Attorney that the Order was made for attaining a proper and reasonable purpose. As indicated, the arrangement was made with the knowledge of all the interests involved, the Port Authorities and Foreign Exchange Control Authorities on the one hand, and the Savar Co. Ltd., and the ship owners and the agents, on the other, under which the increased lighterage charges were in fact brought into operation beginning on February 14, 1952, and the Order was only introduced to give them the seal of legality. The respondents alone refused to fall into line. From this aspect it is impossible not to regard as an eminently reasonable measure  the act of the Minister of Transport, intended to bring the respondents  into the circle of those who were voluntarily bearing the increased charges. It is indeed possible that the publication of the Order after so long a delay points to defective and weak administration-and we should not like to encourage such administration-but this is not a consideration relevant to the matter in litigation before us.

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For the other side, Mr. Firon contended that in substance the Order constitutes interference with the contractual  relationships  between the ship owners and the suppliers of lighterage services, and that a retroactive determination of rates for such services could seriously affect the orderly course of business and generally have undesirable effects. This argument was acceptable to the District Court but with all due respect does not impress me in the 'circumstances of the special case before us. The relations between the lighterage contractors and their customers are indeed contractual but the service charges are not included among them. This detail depends entirely upon the provi ions of the law, as to which the parties have no binding voice and from which they are not free to deviate. Changes in the rates are in the absolute discretion of the Minister of Transport. The exercise of this authority, even in a retrospective manner affecting past transactio:,;is, does not in itself constitute an unlawful interference or one so unreasonable  that it could be regarded as in excess of authority.

Whether or not the period of time in relation to which the retro­ spective application was prescribed is within reasonable limits, according to the rules adopted by the courts in such cases, is a different question. On this point I agree with the conclusion reached by the District Court that because of the unduly long period of retroactivity the Order is defective for obvious unreasonableness.

The period is one and a half years. And I do not see how it is possible after  the lapse of so long a t e  to order that concluded  transactions  be reopened without causing "manifest wrong and injustice" to those who are now required to make the higher payments (see the Binenbaum case (5) at p. 386) or without creating "confusion and  uncertainty" (see the case of Ho/on  Municipality  v.  Shwartz  (12)  at  p.  218). For this reason, the retrospective application of the Ports (Lighterage Charges) Order, 1953, appears to me to be invalid.

A further reason for invalidating the retroactive application  of  the Order, and in reality the Order itself, is this. It appears to me that the instant case comes within the range of the principles which serve as grounds for invalidating an administrative act, including admin­ istrative legislation, on account of the extraneous purpose which it aims to achieve. We are told, and this is not disputed, that in order to avoid a loss in State revenue of foreign currency from foreign ships, there was need to raise the rates for the services provided to accord with the change in the exchange rate of the Israel lira. To forestall the argument of discrimination in their favour, the rates were likewise raised for Israel

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