Humber Oil Terminals Trustee Ltd v Associated British Ports
| Jurisdiction | England & Wales |
| Judge | Lord Justice Etherton,Lord Justice Sullivan,Lord Justice Mummery |
| Judgment Date | 27 January 2012 |
| Neutral Citation | [2012] EWCA Civ 36 |
| Docket Number | Case No:A3/2011/0672, 0671, 0669, 0649 |
| Court | Court of Appeal (Civil Division) |
| Date | 27 January 2012 |
[2012] EWCA Civ 36
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
THE CHANCELLOR OF THE HIGH COURT
HC10C00971, HC10C00970, HC10C00969, HC10C00894
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Mummery
Lord Justice Etherton
and
Lord Justice Sullivan
Case No:A3/2011/0672, 0671, 0669, 0649
Mr Nicolas Green QC and Mr Ewan West (instructed by DLA Piper UK LLP) for the Appellants
Mr Jon Turner QC and Mr Alistair Lindsay (instructed by Eversheds LLP) for the Respondents
Hearing dates : 12th January 2012
Introduction
These are appeals from the order of Sir Andrew Morritt C. dated 24 February 2011 by which he struck out the amended Particulars of Claim in four actions pursuant to CPR Rule 3.4 and ordered that the original Particulars of Claim be reinstated.
Permission to appeal was given by Patten LJ on 17 June 2011 following an oral hearing.
Background
The respondent in each appeal, Associated British Ports ("ABP"), is a privately owned company. It owns and operates 21 ports in the UK. It is the UK's largest ports group and holds about 23 per cent of the UK market. ABP is the freehold owner and operator of the port of Immingham on the south bank of the river Humber. One of the facilities of the port is the Immingham Oil Terminal ("the IOT"), which was constructed in the 1960s to serve two inland refineries called the Lindsey Oil Refinery and the Humber Refinery ("the Refineries"). The former is owned by Total UK Ltd ("Total") and the latter is owned by ConocoPhillips Ltd ("Conoco"). Since June 1966 the IOT has been operated by Associated Petroleum Terminals (Immingham) Ltd ("APT"), a joint venture company owned and controlled by Total and Conoco.
The appellant in each appeal, Humber Oil Terminals Trustee Limited ("HOTT") is another joint venture company of Total and Conoco. ABP is the landlord and HOTT is the tenant under four leases of land on which the IOT is situated ("the Leases"). The Leases were for terms which expired on 31 December 2009 or 1 January 2010. HOTT is currently holding over under section 24 of the Landlord and Tenant Act 1954 ("the 1954 Act").
Negotiations for an extension of the Leases took place in 1995 and subsequently from 2005. In July 2008 ABP indicated to HOTT that its preferred course was to take operational control of the IOT. No agreement was reached in the negotiations.
In January and June 2009 ABP served on HOTT notices under section 25 of the 1954 Act to terminate the Leases. In each of those notices ABP indicated that it would rely upon the ground in section 30(1)(g) of the 1954 Act (viz. "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") in opposition to any application by HOTT to the court for the grant of a new lease pursuant to section 24 of the 1954 Act.
In December 2009 HOTT commenced four actions (one for each Lease) in the Grimsby County Court for new leases. ABP served Defences in January 2010 in which, among other things, it relied upon the ground of opposition in section 30(1)(g) of the 1954 Act. The relevant part of the Defences on that aspect was as follows:
"The Defendant intends to occupy the premises (and all associated land holdings presently leased to the Defendant) for the purposes of a business to be run by it for the import and export of oil products with a view to (a) ensuring continuity of supply to Total and Conoco (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."
On 16 March 2010 District Judge Richardson ordered, among other things, that all the actions be transferred to the Chancery Division of the High Court; there be tried as a preliminary issue in each action whether, on the determination of HOTT's current tenancy, ABP intends to occupy the holding 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); until the determination of the preliminary issue all further proceedings be stayed except for the issue of interim rent.
Up until this point, then, the actions were continuing in an entirely conventional manner as claims for a new tenancy under the 1954 Act, to which the landlord objected on one of the grounds in section 30. They then took an unconventional turn. On 16 July 2010 HOTT applied for permission to serve amended Particulars of Claim raising issues of competition law. No draft amended Particulars of Claim were supplied in support of that application. Deputy Master Lloyd nevertheless granted permission on 4 August 2010.
Amended Particulars of Claim were served on 15 October 2010. They ran to 28 pages and 107 paragraphs (some of which included several sub-paragraphs). It is not necessary, for the purpose of this appeal, to give more than the following brief summary of the allegations in them.
The amended Particulars of Claim stated, in outline, that ABP has a dominant position in a relevant market, and has abused its dominant position for the purposes of section 18 of the Competition Act 1998 ("CA") and Article 102 of the Treaty on the Functioning of the European Union ("Article 102"). It has done so in that, during the course of negotiations over the terms on which new leases might be granted and in its Defences, ABP has sought to impose excessive selling prices in the form of excessive rents and/or refused to grant leases otherwise than in return for such excessive selling prices; it has relied on the ground of opposition in section 30(1)(g) of the 1954 Act; it seeks to exercise its rights as owner of the land on which the IOT is situated as a means of acquiring all or part of that part of the business of APT concerned with the IOT and would thereby in practice acquire all of HOTT's equipment used in operating that part of the IOT on terms entirely suited to its commercial self-interest. Those allegations were the subject of considerable elaboration in Part III of the amended Particulars of Claim.
The alleged abuse by demanding excessive rent in the negotiations since 1995 was addressed in paragraphs 64 and 70 to 80 of the amended Particulars of Claim. Reference was also made in those paragraphs to proposals as to charges contained in a document sent by ABP to HOTT on 26 March 2010 entitled "MOU between Associated British Ports and Humber Oil Terminals Trustee Limited" ("the MOU") in the context of the continued use of the IOT by HOTT if there were no new leases.
Paragraphs 65 and 81 to 84 of the amended Particulars of Claim concerned the allegation that the rents specified in ABP's Defences are significantly in excess of market rates based on the normal economic value of the land and assets. Paragraph 82 contrasts, for example, the difference between the alleged existing rent of £2,850,000 under the Lease for the jetty comprised in the IOT and the rent proposed by ABP of £23,000,000.
Paragraphs 66 and 85 to 89 of the amended Particulars of Claim concerned the allegation that ABP is not entitled to rely on section 30(1)(g) of the 1954 Act because its reliance arises as the result of its failure to extract excessive rents from HOTT for access to an essential facility. Paragraph 88 alleged that ABP is not and will not be capable of operating the essential facility and cannot guarantee efficient security of supply to the Refineries.
That allegation was the subject of elaboration in paragraphs 67 and 90 to 96 of the amended Particulars of Claim. In those paragraphs it was alleged that there is a high degree of integration between the IOT and the Refineries; as the operator of the IOT, APT's functions are fully integrated with those of the Refineries; the only way ABP could successfully and efficiently operate the IOT would be to use the assets, systems, knowledge, expertise and personnel of HOTT and APT and to allow APT to continue to operate under the control of the Refineries without interference from ABP; ABP's aspirations to introduce third party traffic are misconceived; and in the light of all those matters, any attempt by ABP to control the IOT independently would place the Refineries' operations at substantial risk.
Paragraphs 68 and 97 to 100 concerned the allegation that ABP has abused its market power and position of freehold owner by using the ground of opposition in section 30(1)(g) of the 1954 Act to expropriate a part of the refining facilities, having failed to extract excessive rents from HOTT as part of commercial negotiations. It was alleged, in that context, that the Refineries cannot operate without continuing HOTT's operations, and that the MOU shows that ABP intends to impose ships dues, goods dues and cargo handling charges which are excessive and far beyond the normal economic value of the facilities offered.
It was alleged that, alternatively, if, contrary to all those matters, ABP is entitled to rely on the ground of opposition in section 30(1)(g) of the 1954 Act, HOTT "will rely on the matters pleaded herein, in particular but not limited to those at paragraphs 90 to 96, in order to negative any intention on [ABP's] part to occupy the holding for the purposes, or partly for the purposes, of a business to be carried on by him therein".
The relief sought in the prayer to the amended Particulars of Claim included the following two...
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