Arbuckle Smith & Company Ltd v Greenock Corporation

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeThe Lord Chancellor,Lord Reid,Lord Radcliffe,Lord Cohen,Lord Keith of Avonholm
Judgment Date18 Feb 1960
Judgment citation (vLex)[1960] UKHL J0218-3
Docket NumberNo. 4.

[1960] UKHL J0218-3

House of Lords

Lord Chancellor

Lord Reid

Lord Radcliffe

Lord Cohen

Lord Keith of Avonholm

Arbuckle Smith & Company Limited
and
Corporation of Greenock

After hearing Counsel, as well on Monday the 18th, as on Tuesday the 19th, days of January last, upon the Petition and Appeal of Arbuckle Smith & Company Limited, having a principal place of business at 91 Mitchell Street, Glasgow, Cl, praying, That the matter of the Interlocutors set forth in the Schedule thereto, namely, an interlocutor of the Lord Ordinary in Scotland (Lord Guest) of the 25th of March 1959 and also an Interlocutor of the Lords of Session there of the Second Division of the 18th of June 1959, so far as therein stated to be appealed against, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Interlocutors, so far as aforesaid, might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of the Corporation of Greenock, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Interlocutors of the 25th day of March 1959 and of the 18th day of June 1959, in part complained of in the said Appeal, be, and the same are hereby Recalled: And it is hereby Declared, That during the whole of the relevant rating year the warehouse premises situated at Ker Street, Greenock aforesaid were unlet, unoccupied and unfurnished within the meaning of section 243 (1; of the Local Government (Scotland) Act 1947: And it is further Ordered, That the said Cause be, and the same is hereby, remitted back to the Court of Session in Scotland to proceed as accords: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellants the Costs of the Action in the Court of Session and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That unless the Costs, certified as aforesaid, shall be paid to the party entitled to the same within one calendar month from the date of the certificate thereof, the Court of Session in Scotland, or the Judge acting as Vacation Judge, shall issue such summary process or diligence for the recovery of such Costs as shall be lawful and necessary.

The Lord Chancellor

My Lords,

1

This is an appeal against an Interlocutor of the Second Division of the Court of Session by which the Court adhered to an Interlocutor of the Lord Ordinary (Lord Guest) decerning against the Appellants in terms of the first conclusion of the summons for payment to the Respondents of £2,141 13s. 4d.

2

There is no dispute about the facts. The Appellants purchased certain warehouse premises situated in Greenock with entry as at 1st March, 1957, with a view to using them as a bonded store for spirits. It was not permissible for the Appellants so to use the premises until provisional approval of such use had been granted by H.M. Customs and Excise. The Appellants applied for provisional approval on 28th January, 1958. It was an essential preliminary to the grant of provisional approval that certain alterations to the premises should be carried out in order to make them secure in accordance with Customs regulations. The Appellants commenced to carry out such alterations on 3rd March, 1958, and completed them on 16th June, 1958. Provisional approval was granted by H.M. Customs and Excise on 13th June, 1958, and thereafter the Appellants commenced to use the premises as a bonded store. The Appellants had never prior thereto—that is at any time during the relevant period of Whitsunday, 1957, to Whitsunday 1958 used the premises as a bonded store or for any purpose of their business as warehousemen. They intended to occupy the premises when the alterations were complete and when H.M. Customs and Excise were satisfied with the security measures.

3

Liability for rates in Greenock depends upon section 222 of the Local Government (Scotland) Act, 1947, which enacts:

"Save as otherwise provided with respect to any rate in this Act or any other enactment, every rate levied shall be payable by owners and occupiers in equal proportions",

4

and upon section 16 (1) of the Valuation and Rating (Scotland) Act, 1956, which enacts:

"In the year first commencing after the passing of this Act and in every subsequent year every rate levied by a rating authority shall be payable by occupiers only …"

5

By section 379 (1) of the Act of 1947 "occupier" is defined as meaning the tenant or sub-tenant or any person in the actual occupation of land.

6

Section 243 (1) of the Act of 1947 (as amended by the Act of 1956) enacts that, save as otherwise provided in a local Act, any rate levied by the rating authority shall not be payable in respect of lands and heritages if the lands and heritages are unlet, unoccupied and unfurnished throughout the whole of the year from Whitsunday to Whitsunday corresponding to or as nearly as may be to the period for which the rate is levied.

7

We were assured that there is no relevant local Act.

8

The premises in question were admittedly unlet and unfurnished and the question is whether they were unoccupied in the sense used in the context of rating.

9

Lord Patrick thought that the word "actual" in section 379 (1) of the Act of 1947 had been used to make plain that the occupation which is necessary to make the occupier liable to pay rates is de facto occupation as opposed to de jure occupation, the kind of constructive occupation which might be held to flow from mere ownership of land. I am disposed to agree with him on this, and also when he says that for the purposes of the Act of 1947 an owner of land must have made some actual use of the premises in the relevant year before he can be called on to pay rates. The crucial question, however, is what kind of use is contemplated or, in other words, whether it is sufficient to make alterations with the intention of carrying on a business when the alterations are completed.

10

I do not think it is. I accept broadly the argument for the Appellants which can be put in this way. The sole purpose of the Appellants in acquiring the premises was to use them as a bonded store in connection with their business as warehousemen. The alterations were necessary in order that this purpose might, if the alterations were approved by the Customs and Excise, receive effect. Yet activity carried on in relation to premises, the sole object of which is to make the premises fit for the only use which is contemplated, does not amount to the kind of actual user as is essential to rateable occupation. So long as the activities were confined to making the premises fit for a contemplated purpose, the premises were not serving the Appellants' purposes as warehousemen. The premises were not being applied to the purpose for which they existed but were in an antecedent stage. It must be remembered that under rating law it is open to the owner to sterilise a property—whether by leaving a house without furniture or otherwise—which is perfectly capable of being let for a valuable rent. If, therefore, there is no use of premises according to their nature I find it difficult to see how there is occupation attracting liability for rates.

11

The learned Judges who considered this case in the Court of Session were obviously much impressed by the advantage which in their view the Appellants would receive from altering the premises. I cannot, however, take their next step of saying that because it was an advantage to the Appellants to alter the premises, therefore the Appellants were making beneficial use of the premises. It is an undoubted advantage to the owner of an empty house to put on some slates and keep it weathertight, but the fact that he does so could not create rateable occupation where none existed. I cannot myself accept the view that when a person is repairing or altering something designed for a particular purpose, he is by that action making use of it. The learned Lords of Sessions were able to find support for their view in the decisions of this House in ( Jones v. Mersey Docks and Harbour Board 11 H.L.C.443) and Clyde Navigation Trustees v. Adamson, 3 M. (H.L.) 100. With the greatest respect, I cannot find any. When I consider the use made of its premises by a Docks and Harbour Board, I have no difficulty in recognising it as a full as well as a beneficial occupation, although the Board is precluded from making a profit. In these cases the dock estates were clearly being used according to their actions and the decisions do not, in my view, help in the problem raised by the instant case.

12

As, however, reliance has been placed on certain English cases and everyone has treated the law of Scotland and the law of England as being the same on this point, I want to say that I do not think that they place any real difficulty in the way of the view which I have formed. It will be noted that in Hackney Borough Council v. Metropolitan Asylums Board (1924) 40 T.L.R. 645 Lord Hewart indicated that the carrying out of alterations without more might not amount to rateable occupation. My difficulty is to perceive the relevance of the accumulation of small facts on which the decision that there was rateable occupation was reached. I do not think that the cases where the ratio decidendi was that the premises were in effect "stand-by" premises, such as Borwick v. Southwark Corporation [1909] 1 K.B.78, and Associated Cinema Properties Limited v. Hampstead Borough Council [1944] K.B. 412, help in the...

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