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The intention of this post is a simple one: to assess the ways in which natural justice arguments have historically been raised in private law proceedings. By “natural justice” I mean those common law principles requiring a fair procedure and an unbiased tribunal when powers are exercised. Ordinarily, of course, natural justice arguments arise in judicial review proceedings against public bodies in the Administrative Court or Upper Tribunal, usually when those bodies are exercising a statutory power. But to what extent can it be argued that a private body, in its private relations with private individuals, has acted unlawfully by making decisions in a procedurally unfair manner?
Until around the late 1920s, the law was pretty clear on when natural justice principles could be invoked in private law proceedings. An important distinction was made between proceedings in equity and proceedings at common law. In equitable proceedings for a declaration or injunction, natural justice principles could be invoked when the plaintiff wished to challenge the exercise of trust powers and other fiduciary powers. At common law, the action would invariably be brought for damages, although from 1883 a declaration could also be sought. Natural justice arguments at common law would arise primarily on the basis of a breach of contract, normally with some sort of implied term being read into the contractual relationship between the plaintiff and defendant requiring certain principles of natural justice to be followed. Natural justice arguments would occasionally arise in proceedings founded on the tort of conspiracy, too, though the limited circumstances in which conduct amounting to conspiracy could be established minimised reliance on this tort.
With regard to proceedings in equity, it is clear that there need not be a contractual relationship between the parties for natural justice arguments to be invoked. The rules of natural justice were conceptualised as freestanding equitable principles governing the exercise of powers. This can be seen most clearly in the case of Dawkins v Antrobus (1881) 17 ChD 615. In that case, the plaintiff had been expelled from the Travellers’ Club under a rule of the club that allowed a majority of members to expel a member who conducted himself in a manner that brought the club into disrepute. The plaintiff challenged his expulsion in the Chancery Division, seeking an injunction and declaration on the ground that insufficient notice of the charge made against him had been given. These arguments were not the primary concern of Sir George Jessel MR at first instance, but they were considered in detail in the Court of Appeal. The judgment of Brett LJ is especially clear in setting out when natural justice principles could be invoked. Brett LJ envisaged three ways in which the decision of the club members to expel the plaintiff could be looked at: (i) to see whether they had acted in accordance with the rules of the club; (ii) to see whether those rules themselves complied with the requirements of natural justice; and (iii) to see whether their conduct, though within the four corners of the rules properly interpreted, could nonetheless be described as mala fide (at 630). More importantly, natural justice arguments would not just be relevant in the second type of challenge. Even if the rules accepted amongst the members of the club were, in principle, compatible with the rules of natural justice, natural justice principles could also be invoked when considering whether the members’ conduct was bona fide. In particular, Brett LJ said that “there would be a denial of natural justice if a decision was come to without [the plaintiff] having an opportunity of being heard” (630, see also Cotton LJ at 634 and 636).
The possibility of seeking an injunction or declaration in equity for breach of freestanding principles of natural justice thus coincided with, but was conceptually distinct to, the possibility of bringing an action at common law for damages on the basis of some express or implied term in a contract between the parties. These were two distinct areas of case law: the conceptual bases of the natural justice principles (“equity”/“contract”) and the remedies that were available (injunction and declaration / damages and declaration) were very different.
Blurring the lines
The clear picture outlined above came to be muddied in the middle decades of the twentieth century. In a series of cases the courts came to emphasise the necessity of a contract in all private law proceedings in which natural justice principles were invoked, regardless of whether those proceedings were for damages (or, more frequently, a declaration) at common law or for an injunction or declaration in equity.
The case law started to become confused in Maclean v The Workers’ Union  1 Ch 602. In that case, Maugham J, sitting in the Chancery Division, emphasised that where a contract between the parties set out procedural rules governing the parties’ exercise of their powers, then the courts could not invoke standalone natural justice requirements to supplement the rules the parties had themselves agreed (at 623-625).
The approach in Maclean still preserved the possibility of invoking freestanding natural justice principles in (very rare) cases where there was no form of contractual agreement between the parties. However, the effect of Maugham J’s decision was to make natural justice principles subservient to, and subject to ouster by, contractual agreements. This approach might have been justifiable on the basis of freedom of contract: private parties should be free to dispense with any procedural protections the law would ordinarily impose on their dealings, if that is their intention. But given the sort of body against whom these private law natural justice claims were being brought – bodies like trade unions and sporting regulators, who exercised, through contract, some sort of de facto monopolistic control over less powerful individuals – there was always a degree of artificiality in such reasoning.
Nonetheless, the law’s preference for a contractual approach to natural justice continued to dominate. The highpoint in this came in Byrne v Kinematograph Renters Society Ltd  1 WLR 762. An injunction and declaration were sought in the Chancery Division against the decision of the defendant, a limited company established to protect film distributors, that its members should no longer supply films to the plaintiff’s cinemas. It was argued that this decision was made on the basis of an unfair procedure. It was accepted by the plaintiff at trial that there was no contract between himself and the defendant. Nonetheless, it was argued that natural justice arguments could be invoked in proceedings in equity. This argument was rejected by Harman J who said, “the existence of some contract is essential”. The possibility of introducing natural justice principles in equity where there was no contract between the parties was thus emphatically rejected.
The problem with the exclusively contract-based approach to natural justice arguments, as established in Byrne, was that contracts between private individuals seldom set out elaborate requirements of fair procedure to govern the relationships of the parties to the contract. The possibility of bringing an action for breach of an express term was, therefore, practically non-existent. Actions based on implied terms requiring fair procedures were equally fraught with difficulty. The criteria under which the law allowed for the implication of contractual terms meant that such terms would be implied rarely: it would be unusual for the extensive requirements of natural justice to satisfy the “officious bystander” or “business efficacy” tests. The role of natural justice arguments outside the judicial review process was thus much restricted by Maugham J’s judgment in Byrne.
The limitations of the law of contract fuelled two important dissenting judgments of Denning LJ in Russell v Duke of Norfolk  1 All ER 109 and Abbott v Sullivan  1 KB 189, both in the Court of Appeal. Both of these cases involved actions for breach of contract. Yet in both cases Denning LJ objected to the limited, contract-focussed approach the majority judges took when addressing natural justice arguments. Denning LJ, manipulating the boundaries of law and equity, called for a generous reliance on the principles of natural justice across the law, basing his approach on Dawkins v Antrobus.
Eventually Lord Denning was given the opportunity of vindicating this approach in the important case of Nagle v Feilden  2 QB 633. A decision of the Jockey Club to refuse the plaintiff a horse trainer’s licence simply on the grounds of her gender was challenged on the basis that it was against public policy, and thus unreasonable. Because this was a case where the plaintiff had applied for a licence, rather than one where the plaintiff was deprived of a licence she already had (cf. Russell v Duke of Norfolk), it could not be said that there was any contract between the parties through which “public law” principles like natural justice or unreasonableness could be mediated. However, while Lord Denning MR accepted that a contract had to be alleged where a claim was brought for damages for breach of contract, he expressly said that principles of natural justice, unreasonableness, and so on could be invoked irrespective of contract where a declaration was sought. Looking back over the previous case law, he saw the invocation of contracts as often being “fictitious” (646). The true ground in these cases, he said, was “a man’s right to work”: that right could be protected by the law, independent of any implied term in a contract.
Lord Denning MR affirmed his approach five years later in Enderby Town FC Ltd v Football Association Ltd  1 Ch 591. That case, and Nagle v Feilden, were accepted by Megarry V-C in McInnes v Onslow-Fane  1 WLR 1520 – an ordinary private law claim for an injunction – as establishing that courts are “entitled to intervene in order to enforce the appropriate requirements of natural justice and fairness” (1528), even where, as in McInnes itself, there was no contract between the parties.
The modern law
Nagle v Feilden and McInnes v Onslow-Fane thus recognised the continued possibility of invoking natural justice arguments in private law proceedings even where no express or implied contractual term bound the parties to respect those principles. While Hoffmann LJ, obiter, doubted the correctness of Nagle v Feilden in R v Jockey Club, ex parte Aga-Khan  1 WLR 909 (at 933), the non-contractual basis of natural justice principles outside the judicial review process has nonetheless continued to be recognised in the subsequent case law. In Modahl v British Athletic Federation Ltd (No 2)  1 WLR 1192, Latham LJ expressly recognised the continued applicability of the Nagle v Feilden approach. This was re-affirmed at first instance in Bradley v Jockey Club  EWHC 2164 (QB) (per Richards J at ). As Jonathan Morgan has recognised in his excellent survey of the modern case law and its application to sports governing bodies, the approach in Nagle v Feilden is still to be regarded as “good law” (Morgan, “A mare’s nest? The Jockey Club and judicial review of sports governing bodies”  LIM 102, at 106).
All of this as a useful reminder to both public and private lawyers that public law principles have life outside the strict confines of the judicial review process. Yet given the importance of the possibility of natural justice arguments being raised outside judicial review, it is unfortunate that the circumstances in which they might be introduced are still so ambiguous.
A number of important question marks still hang over this area of the law. In particular, a question remains as to the scope of the principle in Nagle v Feilden. In Bradley v Jockey Club, for example, a question was raised as to whether the Nagle v Feilden approach should be considered as one instance of the common law doctrine against unreasonable restraints of trade, or whether it had a broader application in line with the approach taken in equity, as typified by Dawkins v Antrobus. At first instance, Richards J noted that a number of cases decided after ex parte Aga Khan had rationalised Nagle v Feilden on a restraint of trade basis (see Stevenage Borough FC Ltd v Football League (1996) 9 Admin LR 109, Newport Association FC Ltd v Football Association of Wales Ltd  2 All ER 87, and Mondahl (No. 2)). Indeed, such an analysis would be at one with Denning LJ’s emphasis of a common law “right to work” in that case, though we might see this “right” as simply one of the many common law principles that engage and shape the broader application of the rules of natural justice. Richards J refused to settle this point exactly in Bradley: he said that it was “unnecessary to get caught up in the subtleties” (para ) and that it was sufficient to note that “even in the absence of contract the court has a settled jurisdiction to grant declarations and injunctions in respect of decisions of domestic tribunals that affect a person’s right to work”. If we can see Nagle v Feilden as a natural successor to the line of cases exemplified by Dawkins v Antrobus, then the case allows for a ready reliance on natural justice principles outside judicial review. If, however, it is to be conceptualised simply as an aspect of the restraint of trade doctrine, its scope is much more limited.
There are other questions, too. What of the comments in earlier cases, like Maclean, that the non-contractual approach to natural justice arguments can only be relied on in the absence of any contract setting out procedural requirements? This approach was not emphatically dealt with in Nagle v Feilden, Bradley, and other cases. Indeed, in cases where the contractual route is preferred (where, for example, a claimant is seeking damages), in what circumstances, if at all, will it be proper to imply contractual terms requiring the principles of natural justice to be respected?
The potential of this area of law to develop as a dynamic corollary to judicial review is great, and its significance ought not to be underestimated. The on-going ambiguity is, however, regrettable. It is hoped that the courts will clarify the law in this area one day soon.
Philip Murray is a Fellow of St John’s College, Cambridge, and can be followed on Twitter: @DrPhilipMurray.
Suggested citation: P. Murray, ‘Natural Justice at the Boundaries of Public Law ‘ UK Const. L. Blog (21st November 2013) (available at http://ukconstitutionallaw.org).