Humber Oil Terminals Trustee Ltd ("HOTT") v Associated British Ports ("ABP")
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE SALES,Mr Justice Sales |
| Judgment Date | 18 May 2012 |
| Neutral Citation | [2012] EWHC 1336 (Ch) |
| Docket Number | Case No: HC10C00971, HC10C00894 |
| Court | Chancery Division |
| Date | 18 May 2012 |
[2012] EWHC 1336 (Ch)
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4A 1NL
The Honourable Mr Justice Sales
Case No: HC10C00971, HC10C00894
HC10C00970, HC10C00969
Mr Nicholas Dowding QC, Mr Mark Sefton (instructed by DLA Piper UK LLP) for the Claimant
Mr Christopher Nugee QC, Mr David Holland QC (instructed by Eversheds LLP) for the Defendant
Hearing dates: 30/1/12–10/2/12
Introduction
This is the latest in a number of judgments in relation to legal proceedings between the Claimant ("HOTT") and the Defendant ("ABP") concerning the Immingham Oil Terminal on the Humber Estuary. The Terminal was built to accommodate oil tankers to supply crude oil to and take refined products from two refineries about 5 km inland (the Lindsey Oil Refinery, "LOR", and the Humber Oil Refinery, "HOR"). The legal proceedings are in respect of four leases of property which relate to the Terminal. The most important for the purposes of this judgment is the lease which relates to the oil jetty which protrudes about one kilometre into the Humber Estuary, and comprises seven berths for ships ("the Oil Jetty").
In this judgment, unless indicated otherwise, I use the same terms as are set out and defined in the judgment of Mr Justice Vos in these proceedings, dated 29 July 2011 ( [2011] EWHC 2043 (Ch)—"the New Leases Judgment"). Like him, I will use the abbreviation "IOT" to refer to the entirety of the premises demised by the four leases ("the Leases").
The IOT facility was built in the late 1960s and the Leases were then entered into for periods of 40 years. ABP is the landlord under the Leases and HOTT the tenant. HOTT is jointly owned by the oil companies which own LOR and HOR, Total UK Limited ("Total") and ConocoPhillips UK Limited ("CoP") respectively. Although sharing an interest in HOTT, Total and CoP compete with each other in the oil market.
The terms in the Leases came to an end in 2010. In advance of that, ABP served notices under the business tenancy provisions in Part II of the Landlord and Tenant Act 1954 ("the 1954 Act") to pre-empt claims by HOTT under the 1954 Act that ABP should grant it new leases. In its notices, ABP relied on section 30(1)(g) of the 1954 Act, claiming that it wished to take back possession of the property demised under the Leases in order to carry on a business of its own on it, namely to take on its own shoulders the operation of the Oil Jetty and IOT in order to allow the supply of crude oil to and the export of refined products from the Refineries over the Oil Jetty in return for payment by their owners. In turn, HOTT applied to court under section 24(1)(a) of the 1954 Act for the grant of new tenancies to it.
On 28 June 2011 Morgan J ordered that the question whether ABP genuinely intends to occupy the demised property to carry on its own business there, so as to be entitled to take advantage of section 30(1)(g) of the 1954 Act, should be tried as a preliminary issue. Before that, HOTT had amended its pleadings to raise questions as to the lawfulness of any such intention of ABP as a matter of competition law, but by a judgment in February 2011 the Chancellor had struck out the amendments based on competition law ( [2011] EWHC 352 (Ch)). By the time of the hearing before Morgan J, HOTT had issued a notice of appeal in respect of the Chancellor's decision. Therefore, in defining the preliminary issue to be tried and in order to avoid delay in fixing a hearing date for that trial while HOTT's appeal took place, Morgan J ordered that the preliminary issue should not include any question as to the lawfulness of ABP's intention as a matter of competition law.
The preliminary issue, as defined by Morgan J, was tried by Vos J and is the subject of the New Leases Judgment. In the New Leases Judgment, Vos J found that ABP had established that it had the requisite intention in accordance with section 30(1)(g) of the 1954 Act to occupy the property demised under the Leases for the purpose of carrying on its own business there. Accordingly, subject to any appeal and subject to any issue of competition law, Vos J found that ABP has successfully given notice under the 1954 Act so as to defeat any right of HOTT to have new leases of the demised property granted to it.
Since Vos J delivered the New Leases Judgment in July 2011, there have been two hearings in the Court of Appeal. The first was HOTT's appeal against the decision of the Chancellor striking out its competition law pleading in relation to the section 30(1)(g) case. That appeal was dismissed on 27 January 2012 ( [2012] EWCA Civ 36). The second hearing was in respect of HOTT's appeal against the New Leases Judgment. It took place in March 2012, part way through the hearing before me. In a recent decision handed down on 10 May 2012 ( [2012] EWCA Civ 596), the Court of Appeal has dismissed this appeal by HOTT as well.
Whether or not HOTT is entitled to have new leases granted to it, a question arises regarding the level of interim rent to be paid by HOTT for its continued occupation and use of the demised property until such time as the question whether new leases should be granted or not is resolved. ABP has applied to the court under section 24A of the 1954 Act to determine the level of interim rent and the period for which it is to be paid. The date from which interim rent is payable is governed by section 24B and, in relation to the Oil Jetty Lease, is in dispute. The amount of interim rent payable is to be set in accordance with section 24D of the 1954 Act. These are the matters which I have to determine.
At the start of the hearing before me, HOTT indicated that it wished to reserve its position in relation to possible arguments based on competition law which might affect the level of interim rent to be set by the court. I made an order by consent designed to afford HOTT an opportunity after having sight of this judgment to apply (if so advised) to amend its pleadings in relation to the issue of the level of interim rent to raise competition law issues for further consideration at a future hearing. The parties were agreed that they should proceed with the hearing before me to obtain at least a provisional ruling (subject to any future point of competition law to be raised hereafter) on issues regarding interim rent.
By far the most significant of the issues which I have to determine is the level of interim rent in respect of the Oil Jetty Lease. In addition, I have to determine (i) the level of interim rent payable in respect of the Oil Depot Lease in relation to the grant of an easement for pipelines owned by HOTT which run across ABP's land (which complete part of the run of pipelines between the Refineries and the Oil Jetty) and (ii) the date from which the interim rent payable in respect of the Oil Jetty Lease should run (ABP says it should run from 1 January 2010; HOTT says it should run from 8 April 2010: the difference between them turns on a point of construction of the terms of the Oil Jetty Lease).
The amount of the interim rent payable under the other leases relevant to the IOT has been agreed between the parties at £145,778 p.a. in relation to the land demised under the Oil Depot Lease; £142,500 p.a. in respect of what was termed the 10 Acre Lease; and £28,072.50 p.a. in respect of what was termed the 1.97 Acre Lease. The times at which the interim rent begins to become payable in relation to those other leases are not in dispute. The time at which the interim rent under all the Leases ceases to be due will be when the claims and cross-claims in respect of the grant of new leases under the 1954 Act are finally determined. That date is not yet known.
Factual Background
The basic factual background to the IOT, the Leases and the dispute between HOTT and ABP is helpfully set out by Vos J in the New Leases Judgment. It is convenient to set out some paragraphs of that judgment here, for ease of reference:
"1. This case concerns 4 leases of properties (the "Leases") comprising important parts of the Immingham Oil Terminal in the Humber Estuary. I shall use the abbreviation "IOT" to refer to the entirety of the premises demised by the Leases. Each year, about 20 million tonnes of oil and related products passes through the IOT to and from the Lindsey Oil Refinery ("LOR") and the Humber Oil Refinery ("HOR") (together the "Refineries"), some 5 kilometres away from the IOT. Total UK Limited ("Total") owns and operates the LOR, and ConocoPhillips UK Limited ("CoP") owns and operates the HOR.
2. The tenant under each of the Leases is Humber Oil Terminals Trustee Limited ("HOTT"), which is a joint venture company operated by Total and CoP. Total and CoP also own a joint venture operating company, Associated Petroleum Terminals (Immingham) Limited ("APT"), established to operate the IOT, other jetties, and the Common Pumping Station (the "CPS") for the Refineries.
3. The most important of the 4 leases relates to the Immingham Oil Jetty itself (the "Oil Jetty") which protrudes about one kilometre into the Humber Estuary, and comprises a total of 7 berths. There are three seaward deep water berths, two of which are suitable for VLCCs, allowing partly loaded vessels of up to 290,000 deadweight tonnes to dock. The 4 remaining berths are suitable for barges and coasters and are located to the West of the Oil Jetty on a finger pier. Total uses the Oil Jetty for all its imports of...
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