Shell-Mex and B P Ltd Ltd v Clayton (Valuation Officer) and Anor

[1956] 3 All ER 185

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(Judgment by: Lord Tucker)

Between: Shell-Mex and B P Ltd Ltd
And: Clayton (Valuation Officer) and Anor

Court:

Judges: Viscount Simonds
Lord Oaksey
Lord Morton of Henryton

Lord TuckerLord 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

Hearing date: 26-28 June 1956
Judgment date: 25 July 1956

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Judgment by:
Lord Tucker

My Lords, it was conceded by counsel on behalf of the respondents in the course of the hearing that they could not contest the decision of the Court of Appeal that the appellants had established that the hereditament in question satisfied the first of the three necessary conditions prescribed in s 5(1)(c) of the Rating and Valuation (Apportionment) Act 1928, viz, that it was used wholly or partly for dock purposes. They reserved, however, their rights with regard to apportionment under s 6, if the occasion should arise. It remains, therefore, to decide whether the hereditament also satisfies the two remaining further conditions, viz, (b) that it is part of a dock undertaking, and (c) that such undertaking is one whereof a substantial proportion of the volume of business was concerned with the shipping and unshipping of merchandise not belonging to or intended for the use of the undertakers.

As to (b), it was contended for the appellants that the hereditament is occupied and used as part of the dock undertaking carried on by the British Transport Commission in the Port of Hull. And, alternatively, that it is so occupied and used as part of the dock undertaking carried on by the appellants at their own dock, ie, the barge berth. If they are right in their submission that it is part of the undertaking of the Port of Hull, it is admitted that they would, in that event, satisfy the third condition with regard to the volume of business concerned with the shipping and unshipping of merchandise not belonging to or intended for the use of the undertakers.

On the first of these two alternatives I feel unable to accept the contention of the appellants. I think the decision turns largely on the particular facts of each case. It is quite possible for a dock authority to let off part of their premises on terms and in circumstances in which the demised premises will remain part of the dock undertaking subject to the regulations of the authority with regard to user and so forth; but in the present case, the authority merely granted long leases of vacant land adjacent to their undertaking to the appellants for their own purposes and free from any regulation or supervision by the authority. There is nothing which, to my mind, would justify a finding that, by the grant of these leases, the dock authority had incorporated in their existing undertaking the new installations and equipment which the appellants were to erect for the purposes of their business. I think the finding of the Lands Tribunal on this issue was justified by the facts proved, and should not be disturbed.

I pass, therefore, to the alternative submission. This depends on the definition of "dock undertaking" in s 5(3). It is as follows:

"'Dock undertaking' means an undertaking carried on by a dock authority, but also includes any other undertaking comprising as part thereof a dock in so far only as its business is carried on at and in connection with that dock."

I find the latter part of this definition very puzzling, but it would seem to me difficult to say on the facts of the present case that, if the undertaking is limited to the business carried on at and in connection with the dock, ie, the barge berth, the hereditament in question, which is physically separated from the dock, could be said to be part of the limited undertaking. But, however this may be, I have reached the conclusion that, assuming the appellants qualify as undertakers under the second limb of the definition, the substantial proportion of the volume of their business is not concerned with the shipping and unshipping of merchandise not belonging to or intended for their use.

I do not think the words "belonging to" and "use of" in this context are equivalent to "the property of" and "personal use". I think they have a wider meaning. The property in the oil in the strict legal sense of the word did not pass to the appellants from the consigning companies on delivery, but the appellants had a good possessory title to it as against everyone. The consignors had no more than a contractual right to an account and payment. When delivered, it was put in a common tank and mixed with other oil. For all practical purposes the oil was at the disposal of the appellants, subject only to the consignors' rights referred to above. I think, therefore, it "belonged to" the appellants within the meaning of those words in the present context. I also agree with the Court of Appeal that the oil was intended for their "use", in the sense of being used in their business. If a garage proprietor carries on a business which includes a hire-car service as well as an installation of petrol pumps for the supply of petrol to his customers, and for these purposes buys petrol from the distributing companies, I think the petrol is supplied to him to be "used" in his business, irrespective of whether it is put in the tanks of his own hire cars or those of his customers. This, in my opinion, is the sense in which the word is used in the present context.

For these reasons, I would dismiss the appeal.