Crowe v Lloyds British Testing Company Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MORRIS,LORD JUSTICE WILLMER,LORD JUSTICE HARMAN |
| Judgment Date | 18 December 1959 |
| Judgment citation (vLex) | [1959] EWCA Civ J1218-3 |
| Court | Court of Appeal |
| Date | 18 December 1959 |
[1959] EWCA Civ J1218-3
In The Supreme Court of Judicature
Court of Appeal
Lord Justice Morris
Lord Justice Willmer and
Lord Justice Harman
MR W.L. ROOTS, Q.C. and MR RAYMOND PHILLIPS (instructed by The Treasury Solicitor) appeared on behalf of the Appellant Valuation Officer.
MR J. P. WIDGERY, Q.C. and MR DAVID WLDDICOMBE (instructed by Messrs. Gregory, Rowcliffe & Co., agents for Messrs Shakespeare & Vernon, Birmingham) appeared on behalf of the Respondents, Lloyds British Testing Co. Ltd.
This is a Case stated by the Lands Tribunal for the decision of the Court of Appeal pursuant to section 3, subsection 4, of the Lands Tribunal Act, 1949. The question in issue is whether, upon the facts as found, the premises of Lloyds British Testing Co. Ltd are to have their rateable value ascertained under section 22 (1) (a) of the Rating and Valuation Act, 1925, as amended, or under section 22 (1) (b). The figures which respectively become applicable upon the basis of the alternative contentions are not in dispute.
The company own and occupy a hereditament which is described as testing house and premises in Dudley. They occupy and use the hereditament for the purpose of testing, proving and finishing chain cables and anchors in accordance with the provisions of the Anchors and Chain Cables Act, 1899. Under that Act it is provided that a maker of or dealer in anchors or chain cables shall not sell or contract to sell, nor shall any person purchase or contract to purchase, for use on any British ship, any chain cable or any anchor exceeding 168 1bs in weight unless it has been previously proved in accordance with the Act. A contract for the sale of any such chain cable or anchor carries with it, in the absence of an express stipulation to the contrary, an implied warranty that the anchor or cable has before delivery been proved in accordance with the Act. A chain cable or anchor must be tested and proved by authorities independent of the manufacturer of whom the Committee of Lloyds Register of British and Foreign Shipping for testing establishments is one. The company had a licence pursuant to the provisions of section 5 of the Act for the testing of anchors and chain cables with a view to their proof. The Act lays down the methods of testing anchors and chain cables, and prescribes the tensile strength and the breaking strain used for the purpose of testing anchors and chain cables. Provision is made for the authorising of the maximum charges which may be made by a licensed tester who must clearly show in his testing establishment both the authorised scale of maximum charges and the charges actually made by him. An Inspector of Testing Establishments is appointed. It is important to appreciate the nature of the work involved in the testing and finishing of chain cables. A statement in regard to it can conveniently be found at page 405 in volume 1 of the King's Bench Law Reports of 1931 in the report of a case concerning the company to which case I will later refer. I cite from that report the following passage: 'The cables were sent to the occupiers' works in their manufactured state but unfinished in the respects hereinafter mentioned. In accordance with the provisions of section 9 of the Act of 1899 a piece of three links was selected and cut out of the length of chain cable. This cutting out was performed by a heavy hydraulic cutter which severed two links one on each side of the piece of three links. The sample piece was then taken to a hydraulic machine and subjected to a test load, called the breaking strain, determined as to load by the provisions of the Second Schedule of the said Act. If the piece selected failed to withstand the breaking strain, a further sample piece was cut out in the aforesaid manner and subjected to the same test. If neither of the samples withstood the breaking strain the whole length was rejected. If one of the sample pieces satisfactorily withstood the breaking strain the several parts of the cable length were joined together by a welded link formed and welded at a forge on the premises by the occupiers' employees. The restored cable length was then placed in its entire length in the chain proving machine and subjected to a reduced test load, as provided by the Act, and termed the tensile strain, and this test resulted in appreciable elongation of the cable and a certain change in shape in each link. The cable was then carefully examined link by link by two separate sets of examiners successively who in the course of examination detected any flaws and removed all scale from the links. In the event of any defective links being found on this examination these were cut out and replaced by welded links formed and joined in the manner above described, and the whole length was then retested. When the said tests had been applied in accordance with the Act the occupiers, as licensed testers, were under obligation to, and did in fact, stamp with a distinctive mark, as laid down in section 10 of the Act, each cable that had withstood the said strains and was in the opinion of the licensed tester without flaw or material weakness. Thereafter the cable length was drawn into a tank and submerged in hot water. Whilst still hot it was then drawn through a second tank containing an anti-corrosive tar preparation and after that it was ready for despatch to the ultimate consignee. These last two processes were necessary in order to make the cable commercially saleable, and if not carried out at the occupiers' works would have to be carried out at some other place and either by the manufacturer, purchaser or some other person. With regard to anchors, these were similarly received in their manufactured state from the makers but unfinished in the respects hereinafter mentioned. The anchor was weighed to determine the test load. It was then placed in the anchor testing machine and submitted to the statutory proof strain required. It was then taken to pieces for examination of the various parts, and if satisfactory was reassembled. In some types of anchor, the riveting of heated pins inserted by the occupiers' workmen was necessary in the process of reassembly. When an anchor had passed the test, the obligations and practice of the occupiers as regards stamping was the same mutatis mutandis as in the case of cables. Before delivery to the consignees anchors were painted by hand. It was further the obligation under the Act and practice of the occupiers, upon request, to deliver a certificate in respect of any cable or anchor which had respectively withstood the said strains and in the opinion of the occupiers was without flaw or material weakness. The hereditament contained heavy machinery and plant both hydraulic and electric for the purpose of carrying out the work above mentioned and also of other work carried out upon the hereditament, which consisted of testing samples of metal, cable, wire rope and other metal substances for other manufacturers, such tests not being in any way connected with the Act of 1899. In the case of such wire rope the method employed was to test to destruction, i.e., to place strain upon the rope until it broke, and the result of such test was communicated to the manufacturers by means of a written statement or formula showing the result of the test. In the hereditament there was a machine shop installed with power and machinery in which the manufacture and repair of tools and plant used by the occupiers and the shaping of portions of metal for the above mentioned tests were carried out".
The Lands Tribunal have found that the hereditament is similarly used today save that the three links for the breaking test are now cut at the maker's premises and not on the hereditament, and that the amount of 'forging' of links has been considerably reduced since 1931 consequent upon the uses of high tensile steel for cables and this cannot be forged on the hereditament.
Section 22 of the Rating and Valuation Act, 1925 , provided for the method of ascertaining the rateable value of a hereditament for the purposes of the first new Valuation List to be prepared under the Act and of any subsequent Valuation List. For hereditaments coming under subsection 1 (a) there was one method of ascertaining the net annual value; for those coming under subsection 1 (b) there was another. A hereditament was under (a), if it belonged to one of the classes specified in the first column of the table contained in Part I of the Second Schedule to the Act. A hereditament was under (b), if it was not such a hereditament as mentioned under (a). If reference is made to Part I of the Second Schedule, it will be seen that the first five classes of hereditaments are "houses and buildings without land other than gardens" of varying gross values. But there is an important note to the Part of the Schedule which reads: "For the purposes of this Part of this Schedule the expression "houses and buildings" does not include mills, manufactories or premises of a similar character used wholly or mainly for industrial purposes or hereditaments valued as part of any railway, dock, canal, gas, water, electricity or other public utility undertaking".
There was no definition of the word "manufactories" nor of the phrase "industrial purposes". The words I have quoted from the Second Schedule remained in effective operation until slightly altered in 1955. Were the premises at Dudley a manufactory or were they of a similar character to a manufactory? Were they used wholly or mainly for industrial purposes? The words to which I refer must be given ordinary reasonable meanings. The word "manufactory" was probably in 1925 synonymous with factory or workshop, but whether this was so or not, I would consider that the testing...
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