Shell-Mex and B P Ltd Ltd v Clayton (Valuation Officer) and Anor
[1956] 3 All ER 185Between: Shell-Mex and B P Ltd Ltd
And: Clayton (Valuation Officer) and Anor
Judges:
Viscount Simonds
Lord Oaksey
Lord Morton of Henryton
Lord Tucker
Lord Keith of Avonholm
Subject References:
LOCAL GOVERNMENT
RATES
De-rating
Freight-transport hereditament
Installations for unshipping and storing oil
Ratepayer selling agent for oil companies
Use of hereditament for dock purposes
Occupation and use of hereditament as part of a dock undertaking
Oil 'intended for the use of' the ratepayer
Legislative References:
Rating and Valuation (Apportionment) Act 1928 - (18 & 19 Geo 5 c 44), s 5(1) (c), (3), s 6(3)(b)
Case References:
Clyde Navigation Trustees v Inland Revenue, Inland Revenue v Kirkwall Assessor - [1930] SC 454; Digest Supp
Clyde Navigation Trustees v Glasgow Assessor - [1931] SC 400; Digest Supp
Judgment date: 25 July 1956
The ratepayer was the occupier of a hereditament comprising land along the banks of the River Humber which it held under leases from the British Transport Commission (the dock authority) or their predecessors in title. The ratepayer was the sole selling agent in the United Kingdom of three oil producing companies. Substantially the whole of the ratepayer's business consisted of the sale and distribution of that oil, and it was remunerated for its services by the three oil companies on a commission basis. There stood on the hereditament, which was some 511/2 acres in area, offices, stores, garages, filling sheds, pump houses, a boiler house, tanks and ancillary buildings, all of which erections save one were occupied by the ratepayer. In addition, the ratepayer owned and occupied a barge berth erected on part of the foreshore, in part leased from the Board of Trade and in part under licence from the British Transport Commission and their predecessors in title. The berth was some one thousand feet from the hereditament and was connected with the pump houses and tanks on the hereditament by means of pipe lines which were owned, occupied and used exclusively by the ratepayer. The ratepayer used the land as a terminal depot in its business of importing, distributing and marketing oil. Incoming tankers unshipped their cargoes of oil at two jetties which belonged to the British Transport Commission and which constituted a dock within the
Rating and Valuation (Apportionment) Act 1928, s 5(3). [F1] The unshipping was effected by pumping the oil from the tankers through a system of pipes running along the jetties and leading to the storage tanks on the hereditament, and the ratepayer took delivery of the oil at the ship's rail. The total tankage capacity at the hereditament was 211,781 tons and the tanks habitually contained between one hundred thousand and one hundred and fifty thousand tons of oil, which was sufficient to cover one month's deliveries. The average receipts and deliveries of oil approximately balanced, and the stock held at the hereditament was in the nature of a reserve. The ratepayer distributed supplies of oil by land and water transport to its own depots and to various categories of customers. The ratepayer consumed a relatively insignificant quantity in its own operations. Oil was shipped into barges at the barge berth (which was a dock within the meaning of s 5(3)(a) of the Act of 1928). Approximately one-quarter of the oil brought into the hereditament from the tankers was dutiable, and the whole hereditament, including the pipes and the storage tanks, was a bonded warehouse. The terms of the leases under which the hereditament was held showed them to have been granted for the purpose of receiving into the hereditament oil unshipped at the jetties. It was contended for the ratepayer that the hereditament was a freight-transport hereditament within s 5(1)(c) of the Rating and Valuation (Apportionment) Act 1928a, as being a hereditament (i) used partly for dock purposes and (ii) so used as part of a dock undertaking and (iii) whereof a substantial proportion of the volume of business was concerned with shipping and unshipping merchandise not belonging to or intended for the use of the ratepayer. The valuation officer and the rating authority conceded that (in accordance with the decision of the Court of Appeal) the hereditament was used partly for dock purposes.
Held
(Lord Oaksey dissenting from the conclusion and reason (i)): the hereditament was not a dock undertaking within s 5(3) of the Rating and Valuation (Apportionment) Act 1928 (and, therefore, was not a freight-transport hereditament within s 5(1)(c)) for the following reasons-
- (i)
- the hereditament was not part of the dock undertaking of the British Transport Commission, since it was leased to, and exclusively occupied by, the ratepayer for the purposes of its own business, and
- (ii)
- although the ratepayer owned a dock, viz, the barge berth, its undertaking at the hereditament was not "business carried on at and in connection with that dock" within those words in the definition of dock undertaking.
Dictum of Lord Fleming in Clyde Navigation Trustees v Glasgow Assessor (1931 SC at p 406) adopted by Lord Simonds (see p 191, letter b, post).
Decision of the Court of Appeal ( [1955] 3 All ER 102 ) affirmed.
Notes
The third condition of the definition of freight-transport hereditament in s 5(1)(c) of the Rating and Valuation (Apportionment) Act, 1928, is that the dock undertaking is one whereof a substantial proportion of the volume of business is concerned with shipping and unshipping of merchandise not belonging to or "intended for the use" of the undertakers. On the question whether oil received by the appellants on the hereditament for the purpose of being sold by them was "intended for the use" of the appellants' opinions were divided. Viscount Simonds and Lord Tucker were of opinion that the oil was merchandise so intended (see p 191, letter i, to p 192, letter a, and p 196, letter b, post); Lord Oaksey and Lord Morton of Henryton were of opinion that the oil was not merchandise so intended (see p 192, letter d, and p 194, letter H, post), and Lord Keith of Avonholm, although inclining to the view that the oil was merchandise so intended, expressed no concluded view (see p 198, letter E, post).
For apportionment, where a freight-transport hereditament is used partly for transport purposes, see 27 Halsbury's Laws (2nd Edn) 463, para 891.
For the Rating and Valuation (Apportionment) Act, 1928, s 5, s 6, see 20 Halsbury's Statutes (2nd Edn) 184, 187.
Appeal
Appeal by the ratepayer, Shell-Mex and BP Ltd from an order of the Court of Appeal, dated 22 July 1955 and reported [1955] 3 All ER 102 , on an appeal by the ratepayer by way of Case Stated from the Lands Tribunal, pursuant to the Lands Tribunal Act 1949, s 3(4). The ratepayer appealed to the Lands Tribunal against the decision of a local valuation court sitting at Kingston-upon-Hull on 25 September 1952 dismissing the ratepayer's appeal that a hereditament occupied by the ratepayer and situated at Salt End, Preston, within Holderness rural district rating area, ought to be treated as a freight-transport hereditament within the meaning of the Rating and Valuation (Apportionment) Act 1928, s 5(1). The second respondents were the rating authority, the Holderness Rural District Council. The facts appear in the opinion of Viscount Simonds, p 188, letter e, to p 190, letter a, post.
Michael Rowe QC and J R Willis QC for the appellant ratepayer.
Maurice Lyell QC and P R E Browne for the first respondent, the valuation officer.
H Edmund Davies QC and E P Wallis-Jones for the second respondents, the rating authority.
Their Lordships took time for consideration.
25 July 1956. The following opinions were delivered.
Order
Appeal dismissed with one set of costs only to be apportioned as to two-thirds to the respondent, the valuation officer, and as to one-third to the respondents, the rating authority.