Humber Oil Terminals Trustee Ltd v Associated British Ports
| Jurisdiction | England & Wales |
| Judge | Mr Justice Vos |
| Judgment Date | 29 July 2011 |
| Neutral Citation | [2011] EWHC 2043 (Ch) |
| Date | 29 July 2011 |
| Court | Chancery Division |
| Docket Number | Case Numbers: HC10C00971, HC10C00894, HC10C00970, HC10C00969 |
[2011] EWHC 2043 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Vos
Case Numbers: HC10C00971, HC10C00894, HC10C00970, HC10C00969
Mr Nicholas Dowding Q.C. and Mr Mark Sefton (instructed by DLA Piper UK LLP) for the Claimant
Mr Christopher Nugee Q.C. and David Holland Q.C. (instructed by Eversheds LLP) for the Defendant
Hearing dates: 18 th-22 nd July 2011
Introduction
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 crude oil, but CoP does not, using another facility, the Tetney Monobuoy, further down the Estuary instead. CoP does however utilise about 30% of the Oil Jetty's capacity for import and export of finished product. Total uses the remaining 70% of the Oil Jetty capacity. It is common ground that, as things stand, the Oil Jetty is now operating at or very slightly below its full capacity.
4. The preliminary issue that is now before me was ordered by Morgan J on 28 th June 2011 as follows:—
“ …the issue of whether the Defendant intends to occupy the holdings for the purposes, or partly for the purposes, of a business to be carried on by it therein, within the meaning of Section 30(1)(g) of the Landlord and Tenant Act 1954, and if so when, and in what circumstances the Defendant so intends; but so that such issue shall not include any question as to the lawfulness of that intention as a matter of competition law”.
5. The objective behind this preliminary issue is that I should determine the question of ABP's intention at this hearing. If ABP establishes the necessary intention, the continuation leases under the Landlord and Tenant Act 1954 (the “1954 Act”) will carry on until after the competition claims have been determined one way or another. There is an appeal pending against the Chancellor's decision of 24 th February 2011 striking out HOTT's competition claims.
6. Section 30(1)(g) of the 1954 Act provides that “ on the termination of the current tenancy the landlord intends to occupy the holding for the purposes, or partly for the purposes, of a business to be carried on by him therein….”.
7. Paragraph 4 of ABP's amended Defence pleads that ABP intends to “ provide port facilities and services for the import and export of oil and other products with a view to (a) ensuring continuity of supply to Total and [CoP] (and their respective refineries) and (b) exploring and implementing the supply of oil and other products which are deemed appropriate over or through the premises to other third parties”.
8. In evaluating ABP's intention in this case, I have had to consider the starkly divergent approaches of the parties. On the one hand, ABP wishes, as its pleading explains, to occupy and manage the IOT itself with a view both to the maintenance of supply to the Refineries, and to opening the Oil Jetty to third party users. On the other hand, HOTT wishes to renew the Leases and maintain the status quo, and points to the fact that, when the Leases terminate, it is entitled to remove its pipelines, equipment and infrastructure from the Oil Jetty, notwithstanding that it would cost some £10 million to do so, and would then cost at least £60 million and take about 2 years to replace what it had removed.
The history of the operation of the IOT
9. The British Transport Docks Board (“BTDB”), a publicly owned corporation, was reconstituted and renamed as ABP by section 5(1) of the Transport Act 1981. Section 5(2) made provision for ABP to become a subsidiary of a holding company. That holding company, Associated British Ports Holdings plc (“ABPH”), was incorporated on 31 st December 1982. Section 7(1) provided for ABP to continue as a statutory corporation. ABP is now in private ownership. Section 9(1) imposed a statutory duty on ABP to: “ provide port facilities at its harbours to such extent as it may think expedient”.
10. ABP owns and operates 21 UK ports and is the UK's largest ports group, holding about 23% of the market share. Immingham is the busiest port in the UK (by volume) and handled over 55 million tonnes of goods in 2008.
11. BTDB constructed the Oil Jetty at IOT between 1967 and 1969 pursuant to the Immingham Dock Revision Order 1966. Thereafter, HOTT installed a complex system of pipes and loading and unloading equipment pursuant to an agreement of 27 th January 1967. The first pipeline was installed in 1967, and the Oil Jetty became partially operational in April 1969. As contemplated by the original terms of the lease of the Oil Jetty, in 1993–1994, ABP constructed, at HOTT's request, a third deep water berth.
12. Apart from the IOT, the Port of Immingham (the “Port”) covers an area of some 1,100 acres, and is made up of numerous facilities including the Immingham Gas Jetty (the “IGT”), which is a specialist liquid bulks terminal handling vessels up to 50,000 deadweight tonnes for a variety of customers, and the Eastern and Western jetties (respectively the “Eastern Jetty” and the “Western Jetty”), which are also specialist liquid bulk terminals handling vessels up to 30,000 deadweight tonnes, also serving a variety of customers. The other terminals generally handle dry bulk cargoes.
13. The statutory background is that section 33 of the Harbours, Docks and Piers Clauses Act 1847 encompasses what is known as the “open ports” obligation, providing: that “ [u]pon payment of the rates made payable by this…Act…the harbour, dock and pier shall be open to all persons for the shipping and unshipping of goods…”. Section 26(2) of the Harbours Act 1964 allows a harbour authority such as ABP power to “ demand, take and recover such ship, passenger and goods dues as they think fit”. Section 27A of the same Act allows ABP to levy ship and goods dues or equivalent dues, to make other charges, and to make a combined charge including both, except where the payer objects. Section 31 of the Harbours Act 1964 allows those paying dues and charges imposed by a harbour authority to appeal to the Secretary of State. The definition of “ ship, passenger and goods dues” in section 57 provides that such dues include those for any ship entering using or leaving the harbour, and in respect of services rendered or facilities provided in respect of goods brought into or taken out of the harbour.
The Leases
14. I have set out the details of the Leases in a schedule to this judgment. In short the 4 Leases are of 4 different properties as follows.
15. The lease of the Oil Jetty (the “Oil Jetty Lease”) is the most important one. Clause 3(7) of the Oil Jetty Lease permits HOTT to remove “ the Lessee's works” at the end of the term. The Lessee's works include the pipes and the loading and unloading equipment which HOTT installed. Clause 6(a) of the Oil Jetty Lease exempts HOTT from payment of ships and cargo dues. There was only one rent review after about 25 years.
16. The lease of 10 acres of land (the “Oil Depot”) which comprises APT's offices and a tank farm (the “Oil Depot Lease”) was granted on different terms to the Oil Jetty Lease. It contained three rent reviews, and a provision in clause 3(9) requiring HOTT to remove all buildings and erections on the Oil Depot if ABP requires it to do so at termination.
17. The lease of a further 10 acres of land (the “10 Acres”) to the East of the Oil Depot (the “10 Acre Lease”) was broadly on the same terms as the Oil Depot Lease.
18. The lease of a further 1.97 acres (the “1.97 Acres”) to the North of the Oil Depot was also granted broadly on the same terms as the Oil Depot Lease.
Chronological Background
19. In the course of the trial, it was realised by the parties that some of the documents placed in the chronological bundle formed part of a lengthy series of “without prejudice” negotiations between the parties in the run up to and in the course of these proceedings. Though some of these documents had already been opened to me, it was eventually agreed to redact the financial offers passing between the parties, but to leave un-redacted the fact that discussions had taken place and the comments on those discussions in board minutes and other documents. This seemed a sensible compromise to me, since it was part of HOTT's case that ABP's intention to re-occupy the IOT was not firm and settled, so that what ABP was saying about its contacts with HOTT...
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