Shell-Mex v Langley
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE DONOVAN,LORD JUSTICE PEARSON |
| Judgment Date | 30 July 1962 |
| Judgment citation (vLex) | [1962] EWCA Civ J0730-6 |
| Court | Court of Appeal |
| Date | 30 July 1962 |
[1962] EWCA Civ J0730-6
In The Supreme Court of Judicature
Court of Appeal
The Master of The Rolls (Lord Denning),
Lord Justice Donovan and
Lord Justice Pearson
Mr J. RAMSAY WILLIS, Q. C. and Mr D. G. WIDDICOMBE(instructed by Messrs Sydney Morse & Co.) appeared on behalf of the Appellants
Mr ANTHONY CRIPPS, Q. C and Mr. J. RAYMOND PHILIPS(instructed Solicitor of Inland Revenue) appeared on behalf of the Respondent
This case concerns the rateable value of some plots of land at London Airport. They were let by the Ministry of Transport and Civil Aviation (whom I will call "the landlords") to Shell-Mex and B. P. Limited (whom I will call "the tenants"). The details are set out in the decision of the Lands Tribunal; so that I need only state the general position.
(a) The Petrol Installations. The landlords have let to the tenants certain plots for petrol installations. The tenants have constructed on some of these plots a series of large petrol tanks, both above ground and under ground, where they store petrol. They have constructed a loading bay on the site and have installed pumps by which they pump petrol from the tanks to the loading bay. The tenants have a large number of petrol lorries (which are called "bowsers"). They bring the bowsers to the loading bay and fill them up with petrol. The bowsers then go out to the aircraft and supply them with petrol. These aircraft are, of course, on the aprons some distance away from the petrol installation. In one of the tenancy agreements, the tenants are granted a right to lay a line of pipes across the airport so as to supply the petrol installation with petrol, and also to lay hydrant pipe lines to take-off points on the aprons.
The first important feature to notice about the tenancy agreements is that the landlords not only let the land to the tenants; they also give the tenants the right to use the roads of the airport and in addition the right to supply aircraft with fuel in a clause which runs as follows: "a right to supply aviation fuel lubricating oils and products allied thereto from the said fuel tank and fuel distribution installation to aircraft at the said airport at such points as the lessor shall prescribe and subject to compliance with all the bye-laws and directions referred to in the above written lease".
The second important feature to notice about the tenancy agreements is that the rents stated therein are inclusive rents covering not only the use of the land but also the right to use the roads and the right to supply aircraft with fuel. The rent also includes (in the one case) the right to lay pipe lines
The third feature to notice is that in each case the rent is a progressive rent, increasing as the years go by, so as to have regard to the expanding business of London Airport,
(b) The Bowser Parking Site. The landlords let to the tenants a piece of land where they could park the bowsers; and in the tenancy agreement they gave the tenants a right (in common with another company) to use a piece of land next to the parking area as a "manoeuvring area". The clause ran as follows: "a right at all timer during the said term (in common with the tenant of the area of land coloured blue) to use the land coloured yellow for the purpose of access to and egress from the said premises coloured pink".
The important feature to notice about this agreement is that the rent was an inclusive rent of £625 a year.
Such being the facts in outline, the dispute is this: In assessing the rateable value, the Lands Tribunal have taken the rents reserved by the agreements as a guide. Mr Ramsay Willis urged before us that this was. erroneous. The agreements were no guide at all, he said, and should be thrown out of the window. He said that the rents actually reserved reflectedthese elements which should not have been taken into account: (1) the right to trade over the airport as a whole; (2) the right to use the manoeuvring area; (3) the right to lay lines of pipes; (4) a contribution towards the costs incurred by the landlords in developing the central area of the airport and making roads.
The Lands Tribunal accepted that a deduction ought to be made from the rents for the right to lay line?, of pipes (no doubt because they regarded those pipes, when laid, as separately rateable), and no question arises about this. But the Lands Tribunal made no deduction in respect of the other matters.
Mr. Ramsay Willis urged strongly before us that the hereditament to be rated was the land itself which was lot to the tenants, and not the rights over other land of the lessors. He said that an easement "or right over the land of another was not rateable unless it required the occupation of land for its exercise. The rigat to take petrol in lines of pipes under the ground was rateable because it required the occupation of land by pipes; see Holywell Union v. Drainage Company, 1895 Appeal Cases, 117. But the right to trade over the airport was, he said, not rateable because it did not involve the occupation of land; nor was the right to use the manoeuring area rateable, because that likewise did not involve the occupation of land.
Mr Ramsay Willis supported this contention (in regard to the petrol installations) by pointing out that the right to trade over the airport was a dominating factor in assessing the rents. He said that at one time there was a proposal that the tenants should pay a rent for the land itself based on so much a square yard, and in addition a "gallonage fee" of so much a gallon on all petrol they supplied to aircraft. Eventually an inclusive rent was agreed in lieu of a gallonage fee; but this rent, he sail, still remained in substance a payment for the right to supply aircraft with fuel. He referred to a letter from sir Alfred Le Maitre (of the landlords) to Mr Cecil Field (of the tenants) saying that the figure of rent "represents the value of a pretty top-hat concession on an airport considered by some to be moderately busy. This rent with its alteration after seven years carries with it immunity from all uplift .
Mr Ramsay Willis -supported his contention (in respect of the bowser parking site) by pointing out that the right to use the area was an important factor in assessing the rent. He pointed to a letter showing that the rent of £625 was calculated on the area of the parking area and of the manoeuvring area, the parking area being charged at twice that of the manoeuvring area.
My conclusion is this: If the right here IN THE SUPREME COURT OF JUSTICE question were to be regarded as distinct and severable from the hereditament itself, which is the subject of the assessment, I would agree that the rights themselves should not be rated, and their inclusion would either make the rentals valueless as a guide or there would "lave to be a deduction on account of them. Such was the case with the right of trading in John Monzies v. Assessor for Glasgow (Case 2), 1937 Session Cases, 288. The newsagent; there occupied a bookstall at the Central Station, Glasgow, which was the rateable hereditament. They had also the right to sell newspapers over the whole railway system. It was held that the. latter right could not be regarded "merely as a pertinent of the bookstall". But in the present case the right to trade over London Airport seemsto me to be a right appurtenant to the letting of the petrol installation and to be inseparable from it. It is one of the 'privileges' and "opportunities" attaching to the hereditament such as Lord Buckmaster spoke of in Port of London Authority v. Orsett Union, 1920 Appeal Oases, at page 305. Just as a tradesman will pay more for a shop in a good situation, sc also will a petrol company pay more for a petrol installation situate within the perimeter of London Airport. I know, of course, that in the ordinary way customers come to the shop for their goods, whereas here the tradesman takes the goods from the shop to the customers. But that makes no difference in point of principle. If you trade in petrol at an airport, it is the only practicable way of doing it. It is the situation that matters; and it is the situation for which any hypothetical tenant will be ready to pay, because it carries with it, as necessarily appurtenant to it, the right to supply petrol to aircraft.
Likewise -with the bowser parking site. If a tenant takes a parking site, it is necessary that he should have room to get in and out. The right to use the manoeuvring area is again necessarily appurtonant to the parking site and is properly included in the value. As the Lands Tribunal said, it is rather like a row of shops with a common loading space in the rear yard. A tenant pays a rent for one of the shops together with a right to use the common loading space. The rent of the shop is a guide to the rateable value, end no deduction should be made for the right to use the leading space, for the simple reason that it is necessarily appurtenant to it.
I find myself, therefore, in agreement with the lands Tribunal and would dismiss this appeal.
I also have come to the conclusion that the decision of the Lands Tribunal is in principle correct. In the normal case the letting of a hereditament-, however well situate the hereditament may be, will not of itself confer the right to trade therefrom. The tenant would ordinarily not need such a right from his landlord. The law gives it to him subject to any conditions.-which statutes or bye-laws may impose. If, however, the hereditamont let is on private...
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