LAW NOTES : Administrative Law - Subsidiary Legislation & Its Control Mechanism

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INTRODUCTION

“Subsidiary legislation” (hereafter referred to as SL) may be defined as any proclamation, rule, regulation, order, notification, bye-law, or other instrument made under any Act, Enactment, Ordinance or other lawful authority and having legislative effect.[1] The maker of SL had to be the person specifically mentioned in the Parent Act (hereafter referred to as PA).[2] SL had become desirable and necessary as for its benefits including the fact that it lessen the duty imposed to the Parliament in making non-essential law. This SL’s powers is conferred by the administrative authorities, and sometime its infringe the rights and interests of an individual. Besides, the fact that SL can be passed quickly without informing the party affected, make it necessary for the controls and safeguard to be imposed upon it. This controls ought to be introduced in order for the benefits of the SL to be fully utilized and its disadvantages to be minimized.

There are several types of controls mechanism that are available in controlling the SL development, for example judicial, legislative, procedural controls (like consultation of affected interests) and others. Two of them will be the focus of the discussion; the judicial control, legislative control together with their scope of effectiveness.  The discussion will be based on the cases decided, legal scholars’ opinion and comparison made between Malaysia and other country.

JUDICIAL CONTROL

Judicial control is one of the most important controls mechanism of the SL. The following paragraph will focus on the concept under judicial control together with the effectiveness of this control as per in Malaysia. Here, the following grounds may be used by Courts to control SL via judicial control.

FIRST GROUND : IMPLIED LIMITATIONS ON THE GENERAL POWER TO MAKE SL.

The first implied restriction under this ground is, the court shall not be excluded from judging disputes between an individual and individual or between an individual and administration unless there is an express provision in the related statute clearly indicated so. In the case of Chester v Bateson[3], the court had declared that a regulation was invalid as it prohibited the property owner, during the wartime zone to get access to court, without the consent from the Minister. Here, the court said that although their property might be forgo but their access to the court can’t ever be denied unless for a legitimate reason. In another case[4], where it was clearly stated under the Wheat Act[5] that for any dispute with regards to point of law, a right to obtain ruling from court is available for the affected party. But in this case, bye-law had been enacted by the Wheat Commission saying that all dispute shall be ruled by the determination of arbitration. The court had held that the Wheat Commission had no power to do so without express power given by the PA. As in the case[6] involving taxes, the court had ruled that the act of SL in that case to exclude the power of court to revise the decision made by the Commissioner was to be declared void as it ultra vires the PA and also violates the individual right to make an appeal.

The second implied limitation is SL can’t impose any financial levy unless it is provided so by the Parent Act. In a decided case[7], a food controller had issued an order that no one shall deal in milk business without license, and in this case the Appellants were granted the license with condition that they had to pay the controller some financial levy. Here, the court ruled the levy was invalid as it was not authorized by the PA. Here it must noted that for any SL bring upon the financial levy matters, those SL must really adhere what had been stated in the PA or else it's going to be invalid.[8] In Section 44 of the Interpretation Act, an expanded dimension of power is given to make SL prescribing fees. Thus, it’s a PA duty to confer the power to levy fees before this provision comes into operation. So here, there is a clear efficacy to control SL in term of financial levy, as its validity will depend on the authorization from the PA. The concept of obtaining authorization from the Parent Act will directly give power to judiciary to execute its function in controlling the evolvement of SL in term of financial levy.

The third implied restriction is no regulations should have the restrospective effect unless the PA expressly provided so. Article 7(1)[9] clearly stated the prohibition for any enactment of ex post facto laws of criminal nature. This, in other hand indicated that there is no prohibition to enact such law for a civil nature. But this concept applied to Parliament. Although Section 20 of Act[10] give a broad power for SL to work in retrospective manner[11], but in a decided case[12]; for subordinate agencies, the power to make SL with retrospective effect must be given expressly by the PA in clear and unambiguous words. Here, the effectiveness of this controls is again secure by the concept of obtaining the authorization from the ‘PA’. Although the vagueness of Section 20[13] give wide power for SL to work retrospectively, but the interpretation given by the Court is the one which will merged together with this provision. Its true that SL can work retrospectively, but at the same time this is subjected to the clear authorization from the PA, which make the effectiveness to control SL via this mechanism to be very convenient.

The fourth implied restriction is SL shall not be unreasonable. The test[14] available is :

“If, for instance the SL were found to be unequal in their operation as between diferrent classes; if there were manifestly unjust, if they disclosed bad faith; if there involved such oppressive operation towards the people that these people can’t found any justification in the minds of reasonable men, the court held that Parliament never intended to do such rules, thus making them to be unreasonable and ultra vires.”

 In another case[15], the court had ruled; the reasonableness of the regulations will only be determined once the vires is established, as they were a bit reluctant to involve in the ‘merits’ of SL as where they were quite ‘ill’ equipped in that sense. While in deciding the case of McEldowney v Forde[16], a bye-law had been passed saying that anyone who involved with any unlawful association (including Republican Club) shall be found guilty of an offence. A person who was a member of the referred Club had been prosecuted for the above offence although he had never join any unlawful activity of the club. The court had held that the SL established was too vague and so arbitrary as to be unreasonable.

The effectiveness of this mechanism is depending on our judiciary decision as the concept of ‘unreasonableness’ is not something that is written down in any statute. As per the case of Kruse, the court will have to decide whether or not the SL is reasonable upon the affected party. The reluctancy of court to uphold their function just because they are quite in-equipped on the SL’s merits must be set aside. This is because to permit those enforcement of unreasonable SL will just equivalent to cause griveous injuries towards the affected party.

SECOND GROUND : “UNCONSTITUTIONALITY”

The 1^st ground to be looked at is whether the PA which delegated the SL’s power is constitutional or not. This ground is subjected to the judicial review as per under Constitutional Law. The principle here is; if the PA is unconstitutional as per Article 4 of Federal Constitution,[17] it is said to be non est as making the SL made under it to be void. In the case of Madhavan[18], its held that the power conferred to the RMP in issuing licences of public speech, does not contravene with the Article 10[19],  as in Clause (2), (3) and (4)[20], Parliament is given power to restrict the freedom under this Article. This judgment had been critiqued by many legal scholars as its considered as too ‘simplisitic’ in its reasoning and had failed to balance the right of individual and the public interest. However in another case[21], a new approach had been taken. In this case, Emergency (Essential Powers) Ordinance 1969 was said have no effect as it had been made during emergency, which was regarded had been lapsed and ceased to be law. This indirect way making the SL made under it, Essential (Security Cases) Regulations 1975 to be void. Federal Court had held that it’s courts’ power to decide on the elimination of emergency proclamation under Article 150(1)[22] which indirectly give effect upon the validity of SL. Here, the effectiveness of this control will highly depend on the discreetness of the judges in balancing the right of an indidual and the public interest as whole.

On this 2^nd ground, the focus of discussion are on whether the SL is unconstitutional together with the effect of that unconstitutionality.[23] Here,this control will be subjected to the judicial review under Constitutional Law. The principle behind this ground is that if the SL contradicts with any constitutional provisions, that SL can be stroked down by courts. The application of this ground can be seen in several cases. For example in the case of Osman[24], the Privy Council had held that the argument saying that certain emergency regulations made under Emergency (Essential Power) Act 1964 had infringed the Article 8 of Federal Constitution and shall be void to its inconsistency must be regarded as not a valid argument. This decision was based on the Article 150(6)[25] of Federal Constitution. The same decision in the Osman’s case was upheld in another case[26]. But later, in case of Teh Cheng Poh[27], the Privy Council had declared that the Regulations 1975[28] that was issued by YDPA under Ordinance 1969[29], was ultra vires the Constitution hence void as per Article 150(2), as here Parliament had sat after the Proclamation making YDPA to no longer posses power to make essential legislations having the force of law. Upon the discussion above, the effectiveness of this control mechanism can be said to exist as court may declared the concerned SL to be void on the ground that ‘its contradicting with any constitution’s provision’, althoughat the same time this power is subjected to the certain special circumstances.[30]

THIRD GROUND : “ULTRA VIRES OF SL UPON THE PARENT ACT / OTHER STATUTES”

The 3^rd ground is; when the SL go beyond the power conferred by the PA, this will fall within the concept of ‘ultra vires’.[31] The types of ultra vires that are Substantive Ultra Vires or Procedural Ultra Vires

(i) SUBSTANTIVE ULTRA VIRES

The focus here will be on the scope, extent and the range of the power conferred upon the SL. The principle underlying is that subordinate agencies have no power to legislate on any matter more than the scope or power that had been conferred towards them by the Parliament. Here, the court is said to have power to declare such excessive of power on part of the subordinate agencies to be invalid, thus making the law made by them also to be void.[32] In the case of McEldowney[33], judge had determined the validity of SL according to this three aspects that were; (1) determination of the words used in the Parent Act that describes the power conferred upon the SL, (2) determination of the meaning of the SL and (3) determination on whether the SL complies with the description in the PA. The main problem addressed by court in declaring the subsidiary legislation to be void is when the statute related is said to used a very broad and general terms.[34] Here, the efficacy of the court to declare such SL to be void is affected as it’s observed that the broader the power conferred, the lesser the chance to control for the court. This is where the Doctrine of Excessive Delegation as one of the effective solution is needed. The important part of the judicial review for SL is pointed out in Section 23(1) of the Interpretation Acts[35] which stated that any SL shall be void to the extent of the inconsistency if it’s inconsistent with the Act of Parliament. In Section 87(d)[36],its stated, no SL shall be inconsistent with PA.

So here, we can see that this substantive ultra vires is one of the limb that provides a good platform for the court to have efficacy in its function to control the SL. This can be seen from the the case of Wong Pot Heng[37] where it was proven that court do have power to invalidate the SL that is substantively ultra vires. But this effectiveness is then indirectly subjected to the vagueness of the terms used in Statute in conferring the power to make SL. The more vague the terms used, the harder for the court to execute its function in this field. That why Doctrine of Excessive Delegation[38] must be upheld as it will ensure that there will be no ‘too broad legislative powers’ conferred by the legislature.[39] Besides, it must be noted that the Federal Court’s decision in the case of Eng Keock Cheng[40], only held that this doctrine shall not applied to the laws passed under emergency powers[41] but not to other laws.[42]

(ii) PROCEDURAL ULTRA VIRES

The principle behind this ground is, SL shall be void if it’s enacted without following the procedure which is mandatory in nature. However, it must be noted here that whether the procedural requirement is mandatory or not it’ll depend to the courts. In a decided case[43], the court tend to treat a procedural norm which requiring consultation to the specified body as mandatory. Here, the fact that the SL don’t complied with the procedure laid down by the statute on referring the proposed rules to the statutory body in asking for their advice on it’s expediency, will make those SL to be declared as procedurally ultra vires.

LEGISLATIVE CONTROL

Malaysia practises parliamentary democracy system which higlight the function of legislative as the body to make the law. Here, this body possesses special right or duty as a principal to ensure that the agent entrusted (executive) with delegated power always act parallel with boundaries served. As for this, a system of legislative supervision over SL had been developed as its believed that this mechanism is one of the effective way to controls SL[44]. In general, the main stages in the supervision is involving ; laying procedure (herein after referred as LP) of delegated legislation before the legislature, scrutiny by the scrutiny committee and debate on the SL at the House. LP is 'informative' in its function. The principle behind this idea is that in the circumtances where the legislative wanted to carry out its function in controlling SL, its important that it been informed with the SL made or proposed to be made. Here, the SL may be laid down as in a draft form or it may be laid down after it has been made in the case where the SL had become effective before its being informed upon the legislature. There are 6 formulaes[45] to be referred under this LP.

            The 1st formulae involved is known as ‘laying simpliciter’. Its a LP which intends to provides information and its directory in nature. The idea behind this formulae is that the statutory instrument (also referring to SL) made had to be presented before the Parliament[46], but failure to do so will not affect its validity.[47] Section 36(2), Financial Procedure Act is one of the example here[48].

            The 2nd formulae is ‘laying with negative or annulment resolution’. Generally, SL enacted will takes effect as soon as its made. Here, the priciple is, SL will continues to take effect until there is an annulment resolution being passed by Parliament. This can be seen for instance in an act[49] which subjected the regulations made to the annulment procedure of the Dewan Rakyat. This concept only applicable to the annulment of the instrument and not to the act of amendment. Thus, the effectiveness of this LP in governing the SL only extended upon the matter related to the annulment and not the amendment.

            The 3rd formulae involved is “laying in draft subject to annulment”. Section 6(1) of the Act[50] laid down that the instrument shall not be enforced until after the expiration date 40 days beginning from the day of the laying. If within those period either House decides to annull the instrument the it shall not be enforced. However, a new draft of proposed instrument maybe presented without any prejudice. This indirect way will give an opportunity to Parliament to express its disapprobation upon the proposed instrument. Here, the 3rd formulae is a bit different compare to the 2nd formulae in the way that the instrument will comes into force only 40 days after laying unless annulled within those period, whereas in the 2^nd formulae, the statutory instrument is already been enforced before it being annullable.[51] This 3^rd LP is also mandatory in nature.[52]

            The 4th formulae is “laying subject to affirmative resolution”. In general, SL made will be enforceable immediately after its had been enacted. Here, this SL will continues to take effect and will then lapse if there is no affirmative resolution passed by Parliament within a stipulated time-period. [53] This LP is mandatory in nature and is regarded as the  most effective controls’ manner compares to the 1^st and 2^nd formulae. This is because the 1^st LP is more informative rather than actionable. While on the 2^nd formulae, SL is allowed to be continously enforceable unless there is annulment resolution passed by Parliament. But in this 3^rd formulae, the control mechanism is more strict, convenient and effective as SL will definitely lapse unless there is affirmative resolution passed by Parliament. This will make those SL to always be in the Parliamentary control and only allowed to be enforced with the supervision of Parliament.

            The 5th formulae involved is “laying in draft subject to affirmative resolution” which highlighted that its mandatory for the proposed instrument to be presented in draft before the Parliament. Its also stated under this formulae that, only upon the affirmative resolution granted by the Parliament, those proposed drafted instrument can be regarded as enforceable. For Malaysia, its suggested for our country to have our own Parliemantary Scrutiny Committee[54] so that this body can help to scrutinized the draft rules. Besides, Malaysia may also needs to refer to Australia[55] statute, as here all regulations are made compulsory to be laid upon both Houses in Parliament for 15 days. Failure in complying with this provision will make the SL become void. Its important to make all the regulation to be presented before Parliament so that Parliament is aware on the enforced SL.  This LP must be considered as the most effective way available for the Parliament to take in charge in controlling the evolvement of SL as here, the Parliament can be said as having the earliest control upon the enforcement of SL that is while its still in the drafting form.

            In conclusion, Malaysia do practices both of control mechanisms that are Judicial and Legislative Control. The effectiveness of this control differ as according to its controls. In certain control mechanism such as Control of Judiciary upon the Unconstitutionality of the PA which governing the SL become proper case by case. I do believed that the scope of effectiveness can always have its own room to be improvised so long as the Judiciary and Legislative system  be open towards new suggestion.

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[1] Section 3 of Interpretation Acts 1948 & 1967

[2] May include : Yang di-Pertuan Agong, Minister, partly to the Yang di-Pertuan Agong and partly to the Minister, the Mayor of Kuala Lumpur or The officers who are stated in the Parent Act such as the Director General of a government department or a statutory body with the relevant minister’s consent.

[3] [1920] 1 KB 829

[4] R & W Paul Ltd v The Wheat Commission [1937] AC 139

[5] 1932 (UK)

[6] Commissioner of Customs and Excise v Cure & Deeley Ltd [1962] 1 QB 340

[7] Attorney-General v Wilts United Dairies [1922] KB 897

[8] Palm Oil Research and Development Board Malaysia & Anor v Premium Vegetable Oils Sdn Bhd [2005] 3 MLJ 97

[9] Federal Constitution

[10] Interpretation Act 1948 & 1967

[11] Section 20 – Sl may be made to operate retrospectively ‘to any date’ which is not earlier that ‘the commencement of the act’.

[12] Wong Pot Heng v Kerajaan Malaysia[1992] 2 MLJ 885

[13] Interpretation Act 1948 & 1967

[14] Kruse v Johnson [1898] 2 QB 91

[15] Ibid 6

[16] [1969] 2 All ER 1039

[17] MP, J. (1997). Administrative Law of Malaysia and Singapore. (3RD ed., pp. 85). KUALA LUMPUR: BUTTERWORTHS ASIA.

[18] Madhavan Nair v Government of Malaysia [1975] 2 MLJ  286

[19] Federal Constitution

[20] Article 10 of Federal Constitution

[21] Johnson Tan Han Seng v Public Prosecutor [1977] 2 MLJ 66

[22] Federal Constitution

[23] MP, J. (1997). Administrative Law of Malaysia and Singapore. (3RD ed., pp. 86). KUALA LUMPUR: BUTTERWORTHS ASIA.

[24] Osman v Public Prosecutor [1968] 2 MLJ 137

[25] Article 150(6) of Federal Constitution ; stated that no provision fall under this article which passed by Parliament in the period of Proclamation of Emergency shall be void as being inconsistency to the constitution – subjected to Article 150(6A).

[26] Public Prosecutor v Khong Teng Khen [1976] 2 MLJ 166

[27]Teh Cheng Poh v Public Prosecutor [1979] 2 MLJ 238

[28] Essential (Security Cases) Regulations 1975

[29] Emergency (Essential Power) Ordinance 1969

[30] Proclamation of Emergency

[31] MP, J. (1997). Administrative Law of Malaysia and Singapore. (3RD ed., pp. 89). KUALA LUMPUR: BUTTERWORTHS ASIA.

[32] Wong Pot Heng v Kerajaan Malaysia [1992] 2 MLJ 885 ; upheld the test laid down in the McEldowney v Forde’s case in determination on the SL validity.

[33]McEldowney v Forde [1969] 2 All ER 1039

[34] MP, J. (1997). Administrative Law of Malaysia and Singapore. (3RD ed., pp. 90). KUALA LUMPUR: BUTTERWORTHS ASIA.

[35] 1948 & 1967

[36] Interpretation Act 1948 & 1967

[37] Ibid 27 ; Refer to the previous discussion on this case.

[38] This doctrine had been applied in the India and the USA courts

[39]JACK M., B. (2010). Administrative Law . (p. 10). NEW YORK: WOLTERS KLUER.

[40] Eng Keock Cheng v PP [1968] 1 MLJ 18

[41] Article150 of Federal Constitution

[42] S., J. (1967). Constitutional Limitations on Legislative Power in Malaysia.

[43] Banwarilal Agarwalla v State of Bihar AIR 1970 Pat 377

[44] MP, J. (1997). Administrative Law of Malaysia and Singapore. (3RD ed., pp. 126). KUALA LUMPUR: BUTTERWORTHS ASIA.

[45] Statutory Instruments Act 1946 – Britain Act

[46]For example ; Section 36(2) of Financial Procedure Act 1957: “Regulations made ... shall be laid before Dewan Rakyat”.

[47] MP, J. (1997). Administrative Law of Malaysia and Singapore. (3RD ed., pp. 127). KUALA LUMPUR: BUTTERWORTHS ASIA.

[48] Section 36(2) of Financial Procedure Act : “Regulations made … shall be laid before the Dewan Rakyat”.

[49] Section 17 of Elections Act 1958

[50] Statutory Instrument Acts 1946

[51] MP, J. (1997). Administrative Law of Malaysia and Singapore. (3RD ed., pp. 128). KUALA LUMPUR: BUTTERWORTHS ASIA.

[52] Griffith J.A.G. & Street H. (1967). Principles of Administrative Law. (4th ed.). Pitman.

[53]Section 46(2) of Exchange Control Act 1953 : “Regulations involved shall be laid before the Dewan Rakyat as soon as its enforceable but shall cease to have effect thereafter unless approved by resolution of the said Dewan”.

[54] Had been practiced in United Kingdon and India

[55] Section 48(1)(c) of the Interpretation Act 1901 - Australia

Done By :

AMERA MOHD YUSOF

FACULTY OF LAW , UM