Ferguson (Harry) Research Ltd v Dawkins
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HODSON,LORD JUSTICE WILLMER,LORD JUSTICE DEVLIN |
| Judgment Date | 11 April 1960 |
| Judgment citation (vLex) | [1960] EWCA Civ J0411-3 |
| Court | Court of Appeal |
| Date | 11 April 1960 |
[1960] EWCA Civ J0411-3
In The Supreme Court of Judicature
Court of Appeal
Lord Justice Hodson
Lord Justice Willmer and
Lord Justice Devlin
MR. J. P. WIDGERY, Q.C. and MR. A. ORR (instructed by the Solicitor of Inland Revenue) appeared for the Appellants
MR. D. WIDDICONBE (instructed by Messrs, Joynson-Hicks & Co agents for Messrs. R. A. Rotherham & Co., Coventry) appeared for the Respondents.
This is an appeal from a decision of the Lands Tribunal, dated 30th October, 1959, on a reference to arbitration in respect of two proposals concerning an assessment of a hereditament described as Offices, Research Establishment and Premises at Approach Road, Bagington The question is whether or not the premises cnnsltute an industrial hereditament. The hereditament is a factory building, taken by the Respondents in June, 1956, and used by them for the purpose of developing a revolutionary type of transport vehicle. The following facts were proved: "At the date of the first proposal the hereditament consisted of a machine shop, main workshop, engine test house, drawing office and other offices and ancillary buildings together with a car park. By the date of the second proposal a new office block had been erected enabling the main workshop area to be enlarged. The type of work done on the hereditament consists of the construction and testing of prototype vehicles and of the making and testing of parts to go into the se vehicles. This work is in connection with the development of a now type of transport vehicle, the ideas for which originated in the main with the Chairman of the Company, and embody patents which were acquired In 1950 from a Mr. Dixon and a Mr. Rolt. The vehicle is still in the process of research and development and is not yet available to the public." Further facts proved were: "(a) The work done by the Company at this hereditament embraced most elements of a vehicle "taut especially the suspension, transmission, braking and driving. (b) At the date of the hearing four prototype vehicles had been constructed. These were all in existence but had not yet reached finality. (c) The prototype can be used for the purpose of practical demonstration. (d) For manufacture in bulk outside the hereditament complete sets of blue prints would be supplied, (e) The development of the ideas tested in the prototype and the necessary work of design and drawing took place on the hereditament." The member of the Lands Tribunal made an inspection on the 15th December, 1959, when he saw the Drawing Office as well as the various workshops mentioned in the decision The process involves that the inventor's concept Ion has to be expressed in blue prints and the design has to be tested to see whether It works in practice. It is to this end that prototypes are required. In these operations something is made which gives the premises a factory flavour, and it is conceded that the premises are a factory within the definit on contained in the Factory and Workshop Act, 1901, Section 149 (1) which reads: Subject to the provisions of this section, the following expressions have in this Act the meaning hereby assigned to them; that is to say:-The expression 'non-textile factory' means -(a) any works, warehouses, furnaces, mills, foundries or places named in Part one of the Sixth Schedule to this Act". Paragraph 13 of that Schedule is: "'Metal and india-rubber works,' that is to say, any premises in which steam, water or other mechanical power is used for moving machinery employed in the manufacture of machinery or in the manufacture of any article of metal not being machinery or in the manufacture of India-rubber or gutta-percha or of articles made wholly or partially of India-rubber or gutta-percha". It is immaterial to consider whether the premises come within the definition of "factory" contained in Section 149 (1) (c): "Any premises wherein or within the close or curtilage or precincts of which any manual labour is exercised by way of trade or for purpose of gain In or Incidental to any of the following purposes, namely -(1.) the making of any article or of part of any article".
The premises being a factory, the remaining question is whether they are precluded from being an industrial hereditament by the terms of the proviso to Section 3(1) of the Rating find Valuation (Apportionment) Act, 1928 which reads:-"In this Act the expression 'industrial hereditament' means a hereditament occupied and used as a factory Provided that the expression industrial hereditament does not include a hereditament occupied and used as a factory or workshop if it is primarily occupied and used for the fallowing purposes (f) any other purposes, whether or not similar to any of the foregoing, which are not these of a factory or workshop."
The Lands Tribunal found the fallowing facts: "l accept the evidence of Mr. J. R. Peacock, the Secretary of Harry Ferguson Research Limited, Harry Ferguson Holdings Limited and H.F. Holdings Limited, that the object of the work done here is the construction of prototypes and parts and the testing of them for the purpose of finding out whether an ides is good and practical, and the only product of the premises is a prototype and parts therefor." The Lands Tribunal also accepted the evidence of the Plaintiffs' witness when he said: "that the prototype was one of the most important articles in the business as it was relied upon for the purpose of demonstrating principles". The decision went on: "this is a relatively small works and is not adapted for manufacture of cars for sale to the public; as I have said the final product is the completed prototype or perfected parts; manufacture in bulk cannot be undertaken in the premises as they now are."
The Lands Tribunal, having found the se facts, answred the question posed by saying that he found that the hereditament was an industrial hereditament and not within the provision. Immediately before the conclusion, as if it were the basis of that conclusion, he said this: "The receipts of the Appellants arise almost wholly from payments made by the Parent Company and I think that these payments are made not to finance research as such, but to enable research to be carried out with the object of plecing either a new type of vehicle or new type components or parts of vehicles on the market, and it seems to me that the work done by the Appellants is by way of trade or for the purposes of gain, the ugh these are Indirect and nothing comes out of the factory which is immediately saleable to the general public."
With all respect to the Lands Tribunal I do not think that the question of ultimate gain is relevant to the quest ion under consideration, although, of curse, it would be relevant had the question been, are the premises a factory within the definition contained in the subsection which I have read, Section 149 (1) (c) of the Act of 1901? it has not been suggested that the activities of the Respondents are altruistic: 1rut the contention before the Lands Tribunal and in this Court wag that the primary purposes of the factory are not factory purpose but research purposes, the work being of an experimental nature involving the making and perfecting of a design, and it is contended that the purpose, of the operation is to produce a design, the end product being a blue-print which can be used elsewhere in practice.
Reliance was placed on a decision of the House of Lords in Grove v Lloyds British Testing Company Ltd., 1931 Appeal Cases, page 450. In that case, there was a conflict of judicial opinion in the lower Courts on the question of whether the hereditament was a factory; but the matter which is relevant to this cage appears in the speech of Lord Dunedin at page 466. The factory in question, a cable testing station occupied by Lloyds British Testing Co, Ltd., was engaged in testing cables and anchors and it was used for forging links to join up chains which had been severed in the process of testing. When the admission was made that the premises were a factory, the argument turned on the question whether the primary purpose was a factory purpose or not. Lord Dunedin said on page 468: "Undoubtedly, there is in the works the forging links to join up the chains which have been severed, and that forging gives to the premises the character of a factory....
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...whether the premises comprised in the workshop area should be derated,— Held, following Harry Ferguson Research Ltd. v. DawkinsWLR, [1960] 1 W. L. R. 639, that the purpose for which the premises were occupied or used was to be determined by the subjective intention of the occupiers, and acc......
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Ulster Television Ltd v Commissioner of Valuation
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Ulster Television Ltd v Commissioner of Valuation
...should be ascertained from an objective consideration of the activities carried on in it. Harry Ferguson Research Ltd.v. DawkinsWLR [1960] 1 W.L.R. 639 and Assessor for Renfrewshire v. Scottish Pipework Engineeringand Allied Training GroupSC [1968] S.C. 118 considered. (3) A television sign......