B P Refinery (Kent) Ltd v Walker
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DENNING |
| Judgment Date | 19 February 1957 |
| Judgment citation (vLex) | [1957] EWCA Civ J0219-1 |
| Court | Court of Appeal |
| Date | 19 February 1957 |
[1957] EWCA Civ J0219-1
In The Supreme Court of Judicature
Court of Appeal
The Master of the Rolls
(Lord Evershed)
Lord Justice Denning and
Lord Justice Romer.
In the Matter of An Appeal To the Lands Tribunal Against A Decision of A Local Valuation Court Constituted From the Central Kent Local Valuation Panel Given On the 24Th June 1953
-and-
In the Matter of the Local Government Act, 1948
Mr MICHAEL ROWE, Q.C., and Mr W.L. ROOTS (instructed by Messrs Llnklaters & Palnes) appeared on behalf of B.P. Refinery (Kent) Limited.
Mr MAURICE LYELL, Q.C., and Mr PATRIOT BROWNE (instructed by the Solicitor of Inland Revenue) appeared on behalf of the Valuation officer.
THE MASTER OP THE ROLLS (read by Lord Justice Denning): These two cases are appeals from the Lands Tribunal, pursuant to the Lands Tribunal Act, section 3 (4), relating to the liability for rates of certain parts of premises occupied by B.?. Refinery (Kent) Limited (hereinafter called "the Company"), or of the plant and machinery thereon. As the name of the company implies, the promises in question are used for the purpose of refining crude oil: and, as I understand it, the process of refining, put in broad and general terms, involves the breaking up or oparating of the crude oil into certain "fractions" or groups of hydrocarbon substances having, as between then, different vaporisation or boiling points. The fractions or groups into which the crude oil is thus separated are, in an ascending order of their respective vaporisation or boiling points: Primary flash distillate, benzine, naphtha, kerosene, light gas oil, heavy gas oil, and reduced crude. The last named, is, in fact, the residue of the oil after separation from it of the other 3ix fractions; It constitutes in volume something in the neighbourhood' of 50 per cent of the original crude oil treated. The process is essentially one of distillation and condensation in which use Is made of the differing vaporisation points above referred to, and it is carried out upon a section of the company's premises called a "topping unit" which covers in soace a rectangle of approximately 250 by.295 ft.
The process of which I have stated the main characteristic is one of modern development and design and is in fact very complex. It requires the production and control of very considerable degrees of heat, amounting to as much as 750 degrees Fahrenheit at certain stages. The process has been described in great detail and with great care in the Case stated, and both parties were agreed before us that such description is in every respect correct. In the circumstances it would be waste of time for me to attempt in this Judgment a repetition of that description. But in order to make this Judgment clear it is necessary for mo to refer to certain features or stages in the process, and it Is also necessary to state at once that the process is continuous, the oil, or the severed components of the oil, passing continuously through a series of pipes which connect the individual parts of the whole topping unit. The oil and its components go, however, through a number of distinct and physically separate items of apparatus – fractionating towers, heaters, strippers, caustic soda towers, reflux and product accumulators, heat exchangers, condensers, coolers – to mention the majority but not all of them. The drawing "A" gives a bird's eye view of the whole refinery, and that part of it known as the topping unit is seen at the north- east corner of the refinery surrounded by a red line. The disposition of the various units of apparatus is also well illustrated in the plan "B" which shows that the several items of apparatus are themselves ldentifiably distinct.
The main claim of the Valuation Officer put by him before the Lands Tribunal and in this Court is that the whole topping unit should be regarded as a single entity, namely, a "still" within the meaning of that term as used in class 4 of the detailed Order of 1927 to which I must later refer. Before the Lands Tribunal the Valuation Officer alternatively contended that the whole unit constituted a "tower for oil refining and condensing" within the meaning of those words as also used in class 4 of the 1927 Order. These alternative claims were both rejected by the Lands Tribunal, and before us Mr Lyell, for the Valuation Officer, has confined himself to the former of them.
The Valuation Officer further contended before the Lands Tribunal that (If the topping unit was not rateable as a single item, that is, on the ground that it was a "still" or tower for oil refining and condensing) nevertheless many of the component Items of apparatus fell individually within the scope of class 4 of the 1927 Order being capable of identification with corresponding items in the Order and being in each case (as required by the Order) a building or structure or In the nature of a building or structure. Upon this port of the Valuation Officer's argument before them the Lands Tribunal found in a number of instances in favour of the Valuation Officer. Thus (to take one example) they held that the heaters were, in truth, "stills" within the terms of the Order and that they were rateable as such, being structures or buildings or in the nature of structures or buildings. In the case which I have instanced, and in the other cases where the Lands Tribunal similarly found in the Valuation Officer's favour, the company has accepted their decision before us. In certain other cases the Valuation Officer, in his turn, has before us accepted the rejection by the Lands Tribunal of his clair that certain other parts of the unit were rateable. But In seven instances the rejection by the Lands Tribunal of the Valuation Officer's contentions has been challenged before us by the Valuation Officer, These seven instances are those of the items of apparatus called heat exchangers, condensers, coolers, reflux and product accumulators, soda flash tower, catwalks and pipes. In all these instances Mr Lyoll has argued in this Court that, if the unit it self is not to be treated as a "still", the Lands Tribunal wrongly rejected his claim as regards individual items. Those contentions on the part of the Valuation Officer constitute the substance of the first appeal before us.
The second appeal relates exclusively to a largo and elaborate boiler built, not on the topping unit, but on another neighbouring part of the refinery. The boiler appears to have been constructed by the firm of Spearing & Partners Limited, and is illustrated on plan "E" attached to the Case. It was the claim of the company before the Lands Tribunal that the boiler was a single individual unit which could not sensibly, for the purposes of rating, be broken up into its component parts: and that since no item occurs in class 4 of the 1927 Order naming a "boiler" or anything else with which the present boiler, as such, could be identified, this boiler of the company's escapes altogether liability for rates. In connection with this argument, Mr Rowe suggested before us that in one respect the 1927 Order might be ultra vires; and I shall have to return to this suggestion later? though, for reasons which will appear, I do not think it necessary to express my view upon it. For, as I have understood the argument of Mr Lye 11, if the boiler is not capable of any separatlon for the purposes of rating into its individual components, then it is not challenged on the part of the Valuation Officer that the boiler does as such fall outside the scope of class 4 of the 1927 Order and escapes altogether liability for rates. On the other hand, if the boiler can properly be broken up for the purposes in hand (as the Lands Tribunal held) then certain of its components – in truth, by far the greater part of thorn – can be identified with items In class 4 of the 1927 Order; and, assuming that those components can further be regarded as buildings or structures or in the nature of buildings or structures (as the Lands Tribunal also held) then these components are separately rateable as such. The second appeal before us is an appeal by the company, in effect confined to the first question which I have Indicated, namely, in the boiler be severed or broken up for the purposes In hand into its component parts? For the company has not challenged the conclusions of the Lands Tribunal as regards the structural-nature of the individual parts if their severance be found legitimate.
I have sufficiently stated the general nature of the questions before us In these appeals, and I turn at once to make my references to the Rating and Valuation Act, 1925, and to the Order of 1927. Subsection (1) of suction 24 of the Act is as follows: "For the purpose of the making or revision of valuation lists…. the following provisions shall have effect with respect to the valuation of any hereditament other than a hereditament the value of which is ascertained by reference to the accounts, receipts or profits of the undertaking carried on therein?- (a) All such plant or machinery in or on the hereditament as belongs to any of the classes specified in the Third "Schedule to this Act shall be deemed to be a part of the hereditaments (b) Subject as aforesaid, no account shall be takon of the value of any plant or machinery in or on the hereditament".
There is no question here of the hereditament being one the value of which is to be ascertained by reference to the accounts or profits of the undertaking. So far, therefore, as plant and machinery is concerned rateability depends upon the extent to which it is comprehended in the Third Schedule to the Act or the later Order of 1927. I accept the correctness of Mr Rowe's statement that, whereas prior to the 1925 Act machinery and...
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