Humber Oil Terminals Trustee Ltd v Associated British Ports
| Jurisdiction | England & Wales |
| Judge | Lord Justice Rimer,Lord Justice Tomlinson,Lord Justice Maurice Kay |
| Judgment Date | 10 May 2012 |
| Neutral Citation | [2012] EWCA Civ 596 |
| Date | 10 May 2012 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2011/2186; 2187; 2188; 2189 |
[2012] EWCA Civ 596
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Mr Justice Vos
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Maurice Kay
Lord Justice Rimer
and
Lord Justice Tomlinson
Case No: A3/2011/2186; 2187; 2188; 2189
Mr Nicholas Dowding QC and Mr Mark Sefton (instructed by DLA Piper UK LLP) for the Appellant
Mr Christopher Nugee QC and Mr David Holland QC (instructed by Eversheds LLP) for the Respondent
Hearing date: 6 March 2012
Introduction
The claimant/appellant is Humber Oil Terminals Trustee Limited ('HOTT'). The defendant/respondent is Associated British Ports ('ABP'). HOTT appeals, with permission granted by Patten LJ, on a single ground (ground 1) against an order made by Vos J on 29 July 2011 in the Chancery Division. Also before the court is HOTT's application, adjourned by Mummery LJ, for an extension of time for making a renewed permission application for a second ground of appeal (ground 4) in respect of which Patten LJ refused permission. HOTT has not sought to renew its applications in respect of grounds 2 and 3.
HOTT is ABP's tenant of an oil depot comprising a jetty and associated premises held under four leases. HOTT's claims in the Chancery Division (there were four, one in respect of each tenancy) were brought under Part II of the Landlord and Tenant Act 1954 and were for new tenancies of its holdings (which were treated in each case as co-terminous with the demised premises). ABP opposed the claims in relation to each tenancy in reliance on the ground in section 30(1)(g) of the 1954 Act, namely 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'. Success by ABP in establishing that ground would require the court to refuse the grant of new tenancies (section 31(1)).
A preliminary issue directing a trial of ABP's ground of opposition was ordered by Morgan J on 28 June 2011. Ignoring a reference to a now irrelevant competition law point, the issue it identified was:
'… whether [ABP] 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 [ABP] so intends; …'
That issue was tried before Vos J over five days in July 2011. He heard oral factual and expert evidence, which was tested by cross-examination. In his conspicuously comprehensive judgment delivered on 29 July, he directed himself carefully as to the law and made clear findings of fact. The outcome was that he held that ABP had established its ground (g) opposition and he made appropriate declarations. Ground 1 of HOTT's appeal challenges the legal basis upon which he approached the issue before him. Ground 4 asserts that he made a crucial finding of fact for which there was no evidence.
The facts
I take these gratefully, in part verbatim, from the judge's judgment and from the summary in the skeleton argument prepared by Mr Dowding QC and Mr Sefton.
The four leases under which HOTT is the tenant are as follows. The main one is that of the oil jetty, granted on 29 August 1970 for a term of 40 years expiring on 31 December 2009. The second lease, also granted on 29 August 1970, is of land upon which a tank farm and offices have been constructed and was for a term of just over 40 years, expiring on 1 January 2010. The third lease, of 10 acres of land to the east of the oil depot, was granted on 6 August 1980 for a term of just under 30 years expiring on 1 January 2010. The fourth lease, of 1.97 acres of land to the north of the depot, was granted on 16 November 1988 for a term of just over 20 years expiring on 31 December 2009.
The premises are on the south bank of the Humber estuary. They are collectively known as the Immingham Oil Terminal ('IOT'). The IOT is within the Port of Immingham. ABP is the statutory harbour authority for the port. It also owns and operates another 20 ports; and its business (indeed its statutory duty: see section 9(1) of the Transport Act 1981) is to provide port facilities at its harbours. Each year, about 20 million tonnes of oil and related products pass through the IOT to and from the Lindsey Oil Refinery ('LOR') and the Humber Oil Refinery ('HOR'), some five kilometres south of the IOT. Total UK Limited ('Total') owns and operates the LOR. ConocoPhillips UK Limited ('CoP') owns and operates the HOR. HOTT is a joint venture company owned and operated by Total and CoP.
The IOT was built in the late 1960s by the then publicly owned British Transport Docks Board ('BTDB'), which was later reconstituted and privatised as ABP. It was constructed in conjunction with the building of the two inland refineries. It was designed and built to service their needs exclusively. Apart from the IOT, the Port covers an area of some 1,100 acres and comprises numerous facilities, including the Immingham Gas Jetty and the Eastern and Western Jetties serving a variety of customers.
The most important of HOTT's four leases is that of the jetty. Clause 6(a) exempts HOTT from the payment of ships and cargo dues. The rent was worked out on the basis that over the term it would reimburse BTDB the capital costs of the construction of the IOT. The jetty extends into the estuary for about a kilometre. It has three seaward deep water berths, two of which are suitable for very large crude carriers, allowing partly loaded vessels of up to 290,000 deadweight tonnes to dock. Two of the berths were constructed in the late 1960s and one in the 1990s. The jetty also has a small finger pier, closer to the bank and in shallow water. This has four berths for smaller vessels such as barges and coasters. Most of what is carried over the jetty comes across the deep water berths rather than the finger pier. Total uses the jetty for all its imports of crude oil. CoP uses another facility for such imports, one further down the estuary. It does, however, use about 30% of the jetty's capacity for import and export of finished product; and Total uses the other 70% of capacity. At present, the jetty is operating at or very slightly below full capacity.
The jetty is essentially a steel and concrete platform for carrying a complex system of plant and equipment ('the infrastructure') which is used to transfer crude oil and oil products between vessels at the berths and the manifolds of the two refineries. Although BTDB paid for the initial construction costs of the jetty, HOTT paid for and installed the infrastructure. Under clause 3(7) of the jetty lease, HOTT has the right to remove it at the end of the term. It would, however, cost about £10m to do so. It would also cost at least £60m, and take about two years, to replace what had been removed.
The infrastructure consists of hose rigs (in the case of two of the deepwater berths) and loading arms (in the case of the other deepwater berth and the four small berths on the finger pier). These are what connect to the manifolds of vessels berthed at the jetty; and they link the vessels to a system of pipework, manifolds and valves that run the entire length of the jetty to the south bank of the estuary. From the south bank of the estuary, the pipework continues inland for about 5 kilometres (over property not demised by any of the leases) where it meets an installation called the common pumping station ('CPS') (also not on land demised by any of the leases). The CPS contains a further system of valves and booster pumps. The CPS is used to control and boost the flow of crude oil or oil products between the refineries and the vessels: without the CPS, the IOT will not function. The CPS is connected to the buffer tank farms at the two refineries.
Also on the south bank of the estuary, near where the jetty meets land, there is a small tank farm. This is not of the scale that would be found with a merchant liquid bulk terminal. It is too small for those purposes, and is used by HOTT only for the short term storage of small quantities of oil products, in their passage from the refineries to barges and coasters berthed at the finger pier, and when changing products in the pipelines.
The operation of the IOT is carried out on behalf of the refineries by Associated Petroleum Terminals (Immingham) Ltd ('APT'). APT, like HOTT, is jointly owned by Total and CoP. The operation of the IOT is a complex process and only functions by reason of (a) APT's skilled and knowledgeable workforce, and (b) its bespoke software, operating systems, manuals and so on created and developed over the years. It is common ground that the IOT (specifically the three deepwater berths) is being used at or near maximum capacity. Third party traffic (ie vessels berthing at the IOT not in connection with the two refineries) could not be introduced (a) without disrupting the service to the refineries, or (b) without first incurring capital expenditure on the IOT to add a new berth and install additional infrastructure so as to reduce the length of time that vessels spend on the current berths (and there are also unresolved engineering concerns as to whether any of this is in fact technically feasible). So far as point (a) is concerned, the refining processes carried on by Total and CoP are continuous, in the sense that oil refineries cannot readily be shut down and then...
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