Associated Provincial Picture Houses Ltd. v Wednesbury Corporation  1 KB 223 is an English law case that sets out the standard of unreasonableness of public-body decisions that would make them liable to be quashed on judicial review, known as Wednesbury unreasonableness.
The court gave three conditions on which it would intervene to correct a bad administrative decision, including on grounds of its unreasonableness in the special sense later articulated in Council of Civil Service Unions v Minister for the Civil Service by Lord Diplock:
So outrageous in its defiance of logic or accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it.
In 1947 Associated Provincial Picture Houses was granted a licence by the Wednesbury Corporation in Staffordshire to operate a cinema on condition that no children under 15, whether accompanied by an adult or not, were admitted on Sundays. Under the Cinematograph Act 1909, cinemas could be open from Mondays to Saturdays but not on Sundays, and under a Regulation, the commanding officer of military forces in a neighbourhood could apply to the licensing authority to open a cinema on Sunday.
The Sunday Entertainments Act 1932 legalized opening cinemas on Sundays by the local licensing authorities "subject to such conditions as the authority may think fit to impose" after a majority vote by the borough. Associated Provincial Picture Houses sought a declaration that Wednesbury's condition was unacceptable and outside the power of the Corporation to impose.
The Court held that it could not intervene to overturn the decision of the defendant simply because the court disagreed with it. To have the right to intervene, the court would have to conclude that:in making the decision, the defendant took into account factors that ought not to have been taken into account, or
the defendant failed to take into account factors that ought to have been taken into account, or
the decision was so unreasonable that no reasonable authority would ever consider imposing it.
The court held that the decision did not fall into any of these categories and the claim failed. As Lord Greene, M.R said (at 229),
It is true the discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word "unreasonable" in a rather comprehensive 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 LJ in Short v Poole Corporation  Ch. 66, 90, 91 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.
The test laid down in this case, in all three limbs, is known as "the Wednesbury test". The term "Wednesbury unreasonableness" is used to describe the third limb, of being so unreasonable that no reasonable authority could have decided that way. This case or the principle laid down is cited in United Kingdom courts as a reason for courts to be hesitant to interfere with decisions of administrative law bodies.
In recent times, particularly as a result of the enactment of the Human Rights Act 1998, the judiciary have resiled from this strict abstentionist approach, recognising that in certain circumstances it is necessary to undertake a more searching review of administrative decisions. The European Court of Human Rights requires the reviewing court to subject the original decision to "anxious scrutiny" as to whether an administrative measure infringes a Convention right. In order to justify such an intrusion, the Respondents will have to show that they pursued a "pressing social need" and that the means employed to achieve this were proportionate to the limitation of the right.
The UK courts have also ruled that an opinion formed by an employer in relation to a contractual matter has to be "reasonable" in the sense in which that expression is used in Associated Provincial Picture Houses Ltd v Wednesbury Corporation: see The Vainqueur José  and Braganza (Appellant) v BP Shipping Limited and another (Respondents) (2015), UK Supreme Court.