British Oxygen Company Ltd v Board of Trade

JurisdictionUK Non-devolved
JudgeLord Reid,Lord Morris of Borth-y-Gest,Viscount Dilhorne,Lord Wilberforce,Lord Diplock
Judgment Date15 July 1970
Judgment citation (vLex)[1970] UKHL J0715-1
Date15 July 1970
CourtHouse of Lords
British Oxygen Company Limited
Minister of Technology (Formerly the Board of Trade)

[1970] UKHL J0715-1

Lord Reid

Lord Morris of Borth-y-Gest

Viscount Dilhorne

Lord Wilberforce

Lord Diplock

House of Lords

Upon Report from the Appellate Committee, to whom was referred the Cause The British Oxygen Company Limited against Minister of Technology (formerly the Board of Trade), that the Committee had heard Counsel, as well on Wednesday the 6th, as on Thursday the 7th, Monday the 11th and Tuesday the 12th, days of May last, upon the Petition and Appeal of The British Oxygen Company Limited, whose registered office is at Hammersmith, London, W.6, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 14th of February 1969, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order 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 Minister of Technology (formerly the Board of Trade), 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 Order of Her Majesty's Court of Appeal, of the 14th day of February 1969, complained of in the said Appeal, be, and the same is hereby, Varied, and that it be Declared, (1) That in so far as cylinders are solely used to receive the gases when made, the Minister is competent to approve expenditure on them; and (2) That when the cylinders not being within (1) above are used partly for storage and partly for delivery of the gas and storing it on the customer's premises the Minister is competent to approve such part of the capital expenditure as may be held to be appropriate for the eligible purpose; and that, subject to such Variation, the said Order be, and the same is hereby, Affirmed: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondent three-quarters of the Costs incurred by him in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Chancery Division of the High Court of Justice to do therein as may be just and consistent with this Judgment.

Lord Reid

My Lords,


The Appellants seek declarations that certain items of their industrial plant are eligible for grants under the Industrial Development Act, 1966. Until that year taxpayers could claim investment allowances as of right. But that system was replaced by the provisions of the 1966 Act which empowered the Board of Trade, and now the Minister of Technology, to make grants if the conditions laid down in the Act apply.


The Appellants produce in saleable form the atmospheric gases oxygen, nitrogen and argon and also other substances including hydrogen. The atmospheric gases are delivered to customers in liquid form at very low temperatures and under little more than atmospheric pressure. The hydrogen is delivered at ordinary temperature but under very high pressure. The plant with which this case is concerned is used to effect such delivery. It includes two types of tanker and two types of cylinder for containing gas under pressure.


The large tanker consists of a Foden four wheeled tractor which supports the front end of a long tank of some 400,000 cubic feet capacity, the other end being attached to a double bogey. The smaller tanker consists of a tank about half that size mounted on an ordinary four wheel lorry chassis. These transport the liquid gases in vacuum insulated containers and have elaborate and expensive components: the tanks alone cost over £15,000 and £11,000 respectively. Outwardly they look much the same as tankers seen daily on the public roads transporting liquids such as petrol, oil or milk.


The first type of cylinder is used for delivery of hydrogen at very high pressure. Batteries of nine cylinders with various controls are mounted on trailers. The cylinders can readily be detached and they could be used separately. But in practice they never are used separately and they are only detached from the trailers very seldom for maintenance and inspection. When hydrogen is delivered to customers in these cylinders sometimes it is at once transferred to the customers' storage plant but sometimes the trailer is left with the customer for a time and he draws hydrogen from the cylinders as he needs it.


The Appellants use very large numbers of the second type of cylinder each of which is a separate unit. It is delivered full of oxygen or some other gas. The customer uses the contents as required and the cylinder is then collected by the Appellants and refilled. It is really a type of returnable container.


I must now set out the relevant parts of the 1966 Act:

"1.—(1) Subject to the provisions of this section, the Board of Trade (hereafter in this Act referred to as 'the Board') may make to any person carrying on a business in Great Britain a grant towards approved capital expenditure incurred by that person in providing new machinery or plant for use in Great Britain—

( a) for carrying on a qualifying industrial process in the course of that business; or


(2) For the purposes of this section a qualifying industrial process is a process for or incidental to any of the following purposes, that is to say—

( a) the making of any article;


(3) For the purposes of this section—

( a) the repair or maintenance in the course of a business of an article which is used in the course of that business for carrying on any such process for or incidental to any of the purposes mentioned in subsection (2) of this section;

( b) the storage in the course of a business of anything which is to be used in the course of that business for carrying on any such process or which is to be or has been subjected to, or has resulted from, any such process carried on in the course of that business; and

( c) the packing in the course of a business of anything which is to be or has been subjected to, or has resulted from, any such process carried on in the course of that business,

shall each be treated as a process incidental to that purpose, but, save as aforesaid, repair, maintenance, storage or packing shall not be treated as a process incidental to any of the purposes mentioned in subsection (2) of this section.


(6) Subject to any order under section 7 of this Act, the amount of any grant under this section shall be twenty per cent, of the expenditure in respect of which it is made, except that it shall be forty per cent. of the said expenditure so far as it qualifies as development area expenditure in accordance with Schedule 1 to this Act."


"Machinery or plant" is defined in section 13(1):

"'machinery or plant' includes part of any machinery or plant but does not include a computer, ship or aircraft or any vehicle except—

( a) a vehicle constructed or adapted for the conveyance of a machine incorporated in or permanently attached to it and of no "other load except articles used for the purposes of the machine;

( b) a vehicle constructed or adapted for the conveyance or haulage of loads in or about private premises, including the site of building or civil engineering operations;………"


The Respondent maintains that the tanks and hydrogen cylinders are parts of the vehicles to which they are attached and are therefore excluded from eligibility for grant by section 13. The Appellants maintain that they ought to be regarded as separate items of plant and they rely in particular on the first exception from the exclusion of vehicles.' That exception broadly applies to machines on wheels: it does not apply to plant on wheels. But the Appellants rely in particular on the words "and no other load". They argue that these words shew that "vehicle" is intended to have a narrow meaning and to apply only to a chassis. If a machine is incorporated in or permanently attached to a chassis the chassis and machine together would normally be regarded as being a vehicle: to call such a machine a "load" requires the notional separation of the two. If "vehicle" has this narrow meaning then the chassis and plant permanently attached to it must also be notionally severable. Logically this argument may be attractive but I think it puts much too much weight on the draftsman's use of the word "load". This provision does not differentiate between parts of the vehicle: the whole vehicle including the machine is made eligible for grant. So the provision read as a whole affords no support for the Appellants' contention that the tank can be notionally separated from the chassis where in fact the two are clearly part of a single unit. The whole tanker is a vehicle: it is designed for use as such and is in fact used as a single unit for transporting the liquified gases.


But the hydrogen cylinders are in a somewhat different position. Two arguments are open to the Appellants which would not apply to the tankers. In the first place it could be said that the whole unit is not a vehicle. For some purposes anything on wheels is a vehicle. But the word could have a narrower meaning of something used to carry goods (or people) from one place to another. So a storage tank built on wheels for convenience might not be regarded as a vehicle if its real purpose was storage rather than transportation. But the primary purpose of the hydrogen cylinders with the trailer appears to be for delivery and not for storage of the hydrogen. The second possible argument is that in fact the cylinders are not part of the vehicle but are a load...

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    ...68 Th ese terms are often used interchangeably; see eg, Craig, above n 24, 542. 69 See British Oxygen Co Ltd v Ministry of Technology [1971] AC 610, 625 (Lord Reid) ('British Oxygen'). 70 See Peter Cane and Leighton McDonald, Principles of Administrative Law: Legal Regulation of Governance ......
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