B.P. Oil Grangemouth Refinery Ltd v Assessor for Lothian Region
| Jurisdiction | Scotland |
| Judgment Date | 09 May 1984 |
| Date | 09 May 1984 |
| Docket Number | No. 4. |
| Court | Court of Session |
SC
L.V.A.C. Lord Robertson, Wylie, Ross.
ValuationDerating"Freight-transport hereditament"Dock"Dock purposes""Dock undertaking"Oil terminalTerminal part of oil field undertaking of group of companiesOil owned by one associated company of ratepayer until passing to another at rail of tankerExclusive use of terminal licensed to associated company which appointed ratepayer to take responsibility for operating terminalRatepayer having exclusive controlWhether "shipping" and "unshipping" of oil necessaryWhether "undertaking" only shipping of oilWhether associated companies also "undertakers"Whether "substantial proportion ofvolume of businessconcerned with shippingof merchandise not belonging to or intended foruse of the undertakers"Rating and Valuation (Apportionment) Act 1928 (cap. 44), sec. 5 (1) (c), (2) (c), (3)1.
ValuationOil terminalWhether entitled to freight deratingWhether undertaking of associated companies of occupier.
ValuationValue"Error of classification""Classification"Failure by assessor to note subjects as within class of "freight-transport hereditaments"Rating and Valuation (Apportionment) Act 1928 (cap. 44), sec. 9 (5)Local Government (Scotland) Act 1975 (cap. 30), sec. 2 (1) (f).
A company which was a subsidiary of British Petroleum Company Ltd. ("B.P.") and which had been entered in the valuation roll as the occupiers of a marine oil terminal appealed to the valuation appeal committee
23against the entry for these subjects in the valuation roll. They contended that the terminal was entitled to derating as freight-transport lands on the ground that it was a dock undertaking, a substantial part of which was not concerned with the shipping and unshipping of merchandise not belonging to or intended for the use of the undertakers in terms of sec. 5 (1) (c) of the Rating and Valuation (Apportionment) Act 1928. The committee found that the pipeline formed part of the Forties Field oil undertaking of the group of companies of which B.P. was the parent. Four production platforms were linked by a subsea pipeline to the coast and oil was piped in a land pipe to a gas treatment plant. Most of the oil was then stored in tanks until an oil tanker was ready to load. The oil was then piped to the terminal. All the parts of the undertaking except the terminal were owned by a company ("B.P.O.") which was also a subsidiary of B.P. The oil was owned by B.P.O. until ownership was transferred at the rail of the tanker, mainly to another subsidiary ("B.P.T."). The lessees of the sea bed had entered into an agreement with B.P.T. conferring the exclusive use of the terminal on B.P. and any company controlled by it. B.P.T. licensed B.P.O. exclusively to use the terminal and B.P.O. appointed a further subsidiary of B.P. ("B.P.D.") to operate the terminal. B.P.D. in turn appointed the appellants to take responsibility for the shipping of petroleum, although the latter might arrange for any other company controlled by B.P. to perform their obligations. The appellants had exclusive control over the mooring of the ships at the terminal, prepared regulations and employed superintendents. Following a previous appeal to the valuation appeal committee, the appellants had been entered as occupiers of the terminal in the valuation roll. The committee held inter alia that the failure of the assessor to note in the valuation roll that the subjects were freight-transport lands was an error of classification in terms of sec. 2 (1) (f) of the Local Government (Scotland) Act 1975. They held, however, that the undertaking carried on at the terminal was that of shipping of oil and that this was carried on by the appellants and the other B.P. subsidiaries. The terminal was not therefore a dock undertaking in terms of sec. 5 (1) (c) of the 1928 Act. The company appealed by stated case to the Lands Valuation Appeal Court, before whom it was conceded on behalf of the assessor that the undertaking was not the shipping of oil. The assessor contended, however, that the committee had erred in holding that the failure to note that the subjects were "freight-transport lands" was an error of classificationHeld (1) that "classification" in sec. 2 (1) (f) of the 1975 Act was to be interpreted in a wide sense and that the 1928 Act specified various classes which were to receive the benefit of derating; a failure by the assessor to note that subjects were entitled to derating was therefore an "error of classification".
(2) That the terminal provided a general service and was therefore a "dock" within sec. 5 (3) of the 1928 Act.
(3) That the terminal was occupied as part of a "dock undertaking" as defined by sec. 5 (3) of the 1928 Act as the undertaking was not the whole
oilfield complex and the shipping of oil but the business carried on at the terminalDictum of Lord Watson in Edinburgh Street Tramways Co. v. Magistrates of Edinburgh (1894) 21 R. (H.L.) 78, at p. 86,applied.
(4) That the three other subsidiaries of B.P. had no presence on the terminal of which the appellants had total control; the committee had found that each company were separate legal personae; it was not relevant to consider what might happen if the other subsidiaries exercised their rights under the agreements in relation to the terminal and there was no question of the appellants and the other subsidiaries operating the terminal as a consortium; the appellants were accordingly alone the undertakers in relation to the terminal in terms of sec. 5 (1) (c) of the 1928 Act.
Clyde Navigation Trustees v. Inland RevenueSC1930 S.C. 454distinguished.
(5) That the oil did not accordingly belong to the undertakers and, because it was not being unshipped at the terminal but was being shipped abroad, it could not be regarded as being intended for the use of the undertakers.
Shell-Mex & B.P. v. ClaytonUNK [1955] 3 All E.R. 102distinguished.
(6) That it was not necessary from the reference in sec. 5 (2) (c) of the 1928 Act to "all purposes connected with shipping or unshipping" for oil to be unshipped at the terminal.
Observed, per Lord Ross, (1) that the oil might have been "intended for use of the undertakers" if it had been shipped to a refinery operated by the appellants.
(2) That it was not necessary to decide whether the unshipping of ballast constituted "the unshipping of merchandise" in terms of sec. 5 (1) (c) of the 1928 Act.
At a meeting of the valuation appeal committee of Edinburgh District of Lothian Region, B.P. Oil Grangemouth Refinery Limited appealed against an entry in the valuation roll for the year 1983. The subjects of appeal were described as "Marine Terminal (1) Hound Point, Dalmeny, West Lothian". The net annual value and the rateable value were both 1,238,000. The appellants contended that the net annual value of the subjects of appeal should be noted "F.T." as they were entitled to the benefit of industrial derating and the rateable value should be shown as 619,000 with effect from 1st April 1981.
The valuation appeal committee refused the appeal and, at the request of the appellants, stated a case for the opinion of the Lands Valuation Appeal Court. The committee found the following facts admitted or proved:
"1. The subjects of appeal are a terminal at which ships load oil and are one of several subjects about which the committee heard a conjoined appeal on 17th and 18th November 1980. The assessor's production number one is the stated case of this committee following upon that appeal which was concerned with various subjects forming parts of the Forties Field oil undertaking of the British Petroleum group of companies. Findings in fact 1, 2, 19, 24 and 25 and the decision and reasons of the committee are held as repeated hereinbrevitatis causa. As a result of that decision the present appellants were entered in the roll as the occupiers of the marine terminal as from 1st April 1978 in place of B.P. Trading Ltd. All the companies hereinafter referred to whose names begin with B.P. are wholly-owned subsidiaries of the British Petroleum Company Ltd.
2. The appellant's production no. 1 explains what the Forties Field oil undertaking of the British Petroleum group of companies is and was itself production no. 2 in the previous appeal. An addendum of May 1983 has been added to provide further information about operations at the marine terminal and in particular described the arrangements for loading oil there. Production 1 is referred to for its terms brevitatis causa. The topmost photograph on page 9 shows a tanker tied up at the terminal. The terminal is solely concerned with the unloading ballast water and loading crude oil. Ballast water is not merchantable. The arrangements with regard to ballast water are dealt with by finding 17 in the previous stated case which is held as repeated herein brevitatis causa. The ships carry ballast water for stability. They carry it in their oil tanks and being polluted with oil deposits from the tanks it must be cleaned before being discharged into the River Forth. The oil salvaged from the ballast water is put into oil storage at Dalmeny and in due course loaded to another tanker with other oil in storage. The appellants' production no. 2 contains their detailed regulations concerned with the mooring of ships at the marine terminal. The regulations are prepared and made up by the appellants' marine superintendant. Production 2 is referred to for its terms brevitatis causa. The appellants employ six berthing supervisors there each of whom has a master's ticket with six general workers to assist them. The appellants have a contract with the Grangemouth boatmen who provide labour in the mooring operations. The only B.P. company with staff working at the subjects of appeal are the appellants.
3. The Crown Estate Commissioners let the sea-bed upon which the marine terminal stands to the Forth Ports Authority for 99 years from 24th April...
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