Lord Advocate v Reliant Tool Company
| Jurisdiction | England & Wales |
| Judge | Viscount Dilhorne,Lord MacDermott,Lord Guest,Lord Wilberforce,Lord Pearson |
| Judgment Date | 19 December 1967 |
| Judgment citation (vLex) | [1967] UKHL J1219-1 |
| Date | 19 December 1967 |
| Court | House of Lords |
| Docket Number | No. 1. |
[1967] UKHL J1219-1
House of Lords
Viscount Dilhorne
Lord MacDermott
Lord Guest
Lord Wilberforce
Lord Pearson
Upon Report from the Appellate Committee to whom was referred the Cause Lord Advocate, as representing the Minister of Labour against Reliant Tool Company, that the Committee had heard Counsel as well on Monday the 6th as on Tuesday the 7th, days of November last, upon the Petition and Appeal of the Lord Advocate, as representing the Minister of Labour, praying, That the matter of the Interlocutor set forth in the Schedule thereto, namely, an Interlocutor of the Lords of Session in Scotland of the First Division, of the 12th of May 1967, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Interlocutor might be reversed, varied or altered, or that the Petitioner might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of Reliant Tool Company, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Interlocutor of the 12th day of May 1967, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellant do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments: And it is also further Ordered, That unless the Costs, certified as aforesaid, shall be paid to the parties entitled to the same within one calendar month from the date of the Certificate thereof, the Cause shall be, and the same is hereby, remitted back to the Court of Session in Scotland, or to the Judge acting as Vacation Judge, to issue such Summary Process or Diligence for the recovery of such Costs as shall be lawful and necessary.
My Lords,
Section 1 of the Selective Employment Payments Act, 1966 , requires the Minister of Labour to refund to certain employers the selective employment tax paid by them and to pay to them premiums in respect of their employees. The employers who are entitled to these refunds and payments are those where the employment is in or carried out from an establishment which comes within section 1(2) of the Act.
Section 1(2) prescribes ( inter alia) that the establishment must be one which—
"is engaged by way of business wholly or partly in—
(i) activities falling under any of the minimum list headings shown in Orders III-XVI of the Standard Industrial Classification."
The question which has to be decided in this case is whether or not the Respondents' establishment was engaged in any such activity. If it was, then it is agreed that they are entitled to have their establishment entered upon the register which the Minister of Labour is by section 7 of the Act required to keep of the establishments coming within section 1(2) and entitled to a refund of tax and payment of the premiums.
The Minister of Labour refused to enter their establishment upon the register and the Respondents then, pursuant to section 7(5) of the Act, required the question to be determined by an Industrial Tribunal. The Tribunal which heard their claim unanimously decided that the Respondents were "entitled to selective employment premium, the business being an establishment which satisfies the requirements of section 1(2)( a) and ( b) of the Selective Employment Payments Act 1966".
From that decision the Lord Advocate appealed to the Court of Session. On the 12th May, 1967, the appeal was dismissed. It was a unanimous decision.
The Standard Industrial Classification is a production of the Central Statistical Office, issued, as its introduction reveals, to promote uniformity and comparability in official statistics of the United Kingdom. The introduction states that it contains 152 Minimum List Headings distinguished by arabic numerals and that these Minimum List Headings are grouped into 24 Orders. The Act does not contain nor does the Standard Industrial Classification any definition of the meaning to be attached to the words "Minimum List Heading". These words appear on the left of each page of the Classification and under them appear the arabic numerals. Order I has the title "Agriculture, Forestry, Fishing" and appears in the following form:
ORDER I—AGRICULTURE, FORESTRY, FISHING
Minimum
List
Heading
001 Agriculture and Horticulture
1. Farming (not fruit) and stock-rearing
All types of agricultural holdings, except market gardens and holdings used mainly for the production of fruit, flowers or seeds. Ancillary activities such as thatching, the retting, scutching and combing of flax and the destruction of rabbits and other vermin are included.
2. Agricultural contracting
Services such as ploughing, harvesting or threshing performed for farmers on a contract basis.
3. Market gardening, fruit, flower, and seed growing
Agricultural holdings used mainly for the production of vegetables, fruit, flowers or seeds (other than seed potatoes, which are included in "farming and stock-rearing"). Nursery gardens producing plants, fruit trees, ornamental trees and shrubs, etc., are included.
002 Forestry
Planting, replanting and maintenance of woodlands and forests; tree felling (except tree felling carried out by sawmilling establishments); gathering of uncultivated vegetable products such as ferns, furze, moss, reeds, etc., from forests and elsewhere.
003 Fishing
1. Sea fishing
Sea fishing by net or line; fishing for oysters, lobsters, crabs and other shellfish. The whaling industry is included.
2. Fishing in inland waters
Fishing in rivers, lakes and canals and the operation of fish farms and hatcheries.
Each page of the Classification is set out in the same fashion and in the Appendix to the Classification under the heading "Minimum List Heading" the various numbers are listed.
Section 2(3) of the Act provides that the activities referred to in subsection (2)( a) of the section are—
"( a) activities falling under any of the following minimum list headings in the Standard Industrial Classification, namely
(i) heading 003 (which relates to fishing)
(ii) ….
(iii) heading 602 or 603 (which relate to electricity and water supply); and
(iv) any heading in Order XIX (which relates to transport and communication) other than heading 709
….
( e) activities falling under minimum list heading 001 or 002.."
and in section 2(4) appear the words "activities falling under minimum list heading 703 ….".
In view of these provisions in the Act, it might be inferred that the words "minimum list heading" in section 1(2)( a) were meant to refer to the arabic numerals in the Classification, as it would seem the words were meant to do in the Classification itself. However, it is not possible to reconcile this interpretation with section 10(4) and (5) of the Act which are in the following terms:—
"(4) Where in the case of any minimum list heading in Orders III to XVI of the Standard Industrial Classification the title of the heading is not accompanied by a description of the industries or services included therein, the heading shall be construed as referring only to the manufacture of the goods specified in that title.
(5) Where any minimum list heading in the Standing Industrial Classification contains express provision that a specified activity is excluded from or included in that heading …"
It is clear from section 10(4) that the title of the heading and, where it is accompanied by a description of the industries, the description of those industries is to be regarded as covered by the words "Minimum List Heading" and it is clear from section 10(5) that the small print below the title of the heading forms part of the "minimum list heading", for it is only in the small print that one finds a specified activity included or excluded.
In the light of these provisions, despite what appears in section 2(3) and (4) of the Act, in my view one must treat all that is printed opposite a set of arabic numerals as forming part of a minimum list heading.
The Respondents contended that their establishment was engaged by way of business in activities falling under the following minimum list heading:—
"332. METAL-WORKING MACHINE TOOLS
Manufacturing metal-working machine tools …."
The Tribunal found that the Respondents "were basically designers of machines and tools, although they could also make certain tools if required to do so". It was common ground that the machines and tools they designed could be described as metal-working machine tools. The Tribunal said that the Respondents "did not deal with the general public, but designed machine tools on a contract basis only for manufacturing companies, such as Rolls Royce, Singer, Remington, Massey Ferguson and others. Those tools were used in the manufacture of a whole range of products falling within various minimum list headings within Orders III to XVI of the Standard Industrial Classification".
The word "activities" is frequently used but is not defined in the Act. It must be given its ordinary natural meaning. The designing of machine tools is an activity. The question is, is it an activity "falling under" the heading containing the words "Manufacturing machine tools".
"Falling under" is another expression used in a number of sections in the Act. It has, in my opinion, the same meaning as the words "covered by" or "coming within".
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