Lands Tribunal for Scotland

OPINION

BP Oil Grangemouth Refinery Limited
v
(1) Assessor for Central Scotland and
(2) Assessor for Lothian Valuation Joint Board

Summary

1. Each of these three appeals was referred to the Tribunal under Section 1(3A) of the Lands Tribunal Act 1949. The appellants, B.P. Oil Grangemouth Refinery Ltd. (“B.P.”) are entered in the valuation rolls as occupiers of three subjects, which are located at Hound Point off South Queensferry and at Grangemouth (two subjects). The appellants claimed ‘material change of circumstances’, effective on 1 January 2003, consequent upon their having granted a Licence in favour of Forth Ports plc (“Forth Ports”) in respect of the Hound Point subjects and having partially renounced , again in favour of Forth Ports, certain leases in respect of the Grangemouth subjects. The appellants claimed that following these agreements they were no longer in rateable occupation and that the subjects (in the Grangemouth cases, parts of the subjects) had become part of the operational land of Forth Ports plc, with the result that the Hound Point entry should be deleted from the roll and the Grangemouth valuations reduced. The respondent assessors contended that the appellants remained occupiers and that all the subjects should remain unaltered in the rolls.

2. In the Tribunal’s opinion, each of the subjects remains in the occupation of the appellants. We have accordingly refused these appeals.

The Issues

3. B.P. appealed against entries in the valuation rolls in relation to the following subjects in respect of each of which they were entered as ‘Occupiers’:-

  1. Marine Terminal, Hound Point, Dalmeny, South Queensferry.
  2. LPG Tank Farm, Grangemouth Docks.
  3. Jetties, Grangemouth Docks.

In each appeal the appellants contended that there had been a change in the rateable occupation of the subjects (in the case of appeals (ii) and (iii), certain jetties and associated areas forming parts of the subjects) and accordingly a ‘material change of circumstances’ in terms of Section 2(1)(d) of the Local Government (Scotland) Act 1975. In the case of appeals (ii) and (iii), the values to be substituted in the event of the appeals succeeding were agreed at £870,000 and £170,000 respectively. The only issue in each case was whether, from 1 January 2003 onwards, the appellants were in rateable occupation of the subjects (or parts of the subjects). The Hound Point subjects and the parts of the Grangemouth subjects sought to be removed from the entries are referred to in this Opinion as “the subjects of appeal”.

Procedure

4. Applications under section 1(3A) of the Lands Tribunal Act 1949 and Regulation 4 of the Valuation Appeal Committee (Procedure in Appeals under the Valuation Acts) (Scotland) Regulations 1995 for referral of the appeals to the Tribunal were in each case granted by the local valuation appeal committees.

5. The appeals were heard together by the Tribunal on 7 to 9 March 2005. In each case, the appellants were represented by Christopher Haddow QC and the respondent assessors (in appeal (i) the Assessor for Lothian Valuation Joint Board, and in appeals (ii) and (iii) the Assessor for Central Scotland) by Raymond Doherty QC. The appellants led evidence from Captain John A. Pollock, Marine Superintendent, B.P. Grangemouth and Stuart J. Wallace, Financial Controller and Deputy Director, Forth Ports plc. The assessors led evidence from John R. R. Fowler, Chartered Surveyor, Depute Assessor, Lothian Valuation Joint Board, and Iain R. K. Macgregor, MRICS, Divisional Valuer, Central Scotland Valuation Joint Board. Schedules of agreed productions and productions for the appellants and each of the assessors were lodged.

Authorities referred to

Westminster Council v Southern Railway Company & Others [1936] AC 511. (“Westminster Council”)
Greenock Corporation v Arbuckle Smith & Co. 1960 SC (HL) 49 (“Arbuckle Smith”)
Assessor for Renfrewshire v Old Consort Company Ltd. & Another 1960 SC 226 (“Old Consort”)
John Laing & Son Ltd. v Assessment Committee for Kingswood Assessment Area & Others [1949] 1 KB 344 (“John Laing”)
Allan & Others v The Overseers of Liverpool, Etc. (1874) LR 9 QB 180 (“Allan”)
Young & Co. v Liverpool Assessment Committee [1911] 2 KB 195 (“Young & Co.”)
Docks and Harbours (Rateable Values)(Scotland) Order 2000
Armour on Valuation for Rating 5th Edition

The Facts

6. There was no significant dispute between the parties on the main facts. We have made the following findings of fact based on the oral and documentary evidence presented to us.

The Appellants

7. B.P. have a substantial business operation based at various locations in Scotland. Some of the agreements referred to also involve other B.P. companies but no issue arose in regard to that. B.P. own and operate an oil refinery at Grangemouth which refines crude oil into products such as petrol, diesel and heating oil as well as a petrochemicals plant producing raw material for plastic extrusion. In addition they have interests in oil extraction from the North Sea. In terms of the Shippers’ Pipeline Liquids Transportation and Processing Agreement (April 2002 version) (“the Shippers’ Agreement”), B.P. operate a pipeline bringing crude oil belonging to a number of companies from the North of Scotland to the refinery at Grangemouth. At the Grangemouth subjects, they both import and export unrefined oil and refined products by sea and distribute refined products by road. A refined product known as ‘Forties Blend’ is then pumped to Dalmeny where it is kept in storage tanks prior to being shipped from the Hound Point subjects.

Forth Ports

8. Forth Ports are a publicly quoted company operating dock areas at Leith, Rosyth, Burntisland and Methil as well as elsewhere. They provide docks and harbours to enable ships to tie up and take on board or discharge cargo. This cargo is extensive in range and type and also includes the provision of a Roll-on Roll-off (Ro-Ro) berth for vessels taking vehicles to and from the continent or islands off the coast of Scotland. They have extensive property holdings at both Grangemouth and Leith and at both locations there are a number of third party companies occupying land under lease, some of whom use nearby quays to bring in or dispatch goods. The company also runs a stevedoring company handling loading and unloading of cargoes. They own a subsidiary company called Forth and Tay Navigation Service through which they exercise their responsibilities for safe navigation in their areas of responsibilities. Forth Ports have statutory powers over part of the River Forth and its estuary which they exercise through their appointed Harbour Master. They also have responsibility for providing pilotage and for undertaking conservancy namely the provision of a safe passage by way of navigation marks, dredging etc. for vessels through their area. Bye laws are in existence as well as regulations which control their area of maritime responsibility. No vessel (above a certain prescribed size) can enter the estuary without the approval of the Harbour Master who also has powers to direct vessels as to their course, their time of arrival and where they may tie up. At all times when vessels are within the port and estuary area controlled by Forth Ports the Harbour Master has ultimate power over where a vessel may go or remain. Forth Ports’ income is mainly derived from ships’ dues, cargo dues, stevedoring charges, conservancy dues and rental income.

Hound Point Subjects

9. These subjects consist of three linked parts making up a marine terminal located in the estuary of the River Forth, east of the Forth Rail Bridge, offshore from South Queensferry, viz.:-

(a) Hound Point 1 (“HP1”) - an oil loading terminal erected on sea bed leased by Forth Ports from the Crown Estate Commissioners (C.E.C.) in 1976 with entry on 24 April 1973.

(b) Vapour Recovery Platform (“VRP”) - a platform housing equipment to gather fumes emanating from the loading Terminals and to return these to the shore for further processing.

(c) Hound Point 2 (“HP2”) - a second oil loading terminal.

Both HP2 and the VRP are erected on sea bed leased to B.P. by the C.E.C. in 1996 with entry on 1 March 1992. The three parts of the terminal are connected to each other by means of elevated gangways. Personnel access is by boat generally from Hawes Pier at South Queensferry. Access is restricted to approved personnel only and the general public does not have access. There are sub-sea pipelines from the terminal to the tank farm at Dalmeny on the south shore of the river. These facilities have always been operated by B.P. as part of their business. Forth Ports have no financial interest in this business other than their general interest in the volume of marine traffic from which they derive much of their income. Forth Ports have no regular presence at the subjects. They have no specialist capability which would enable them to operate or supervise the operation of B.P.’s business at the subjects (other than directing the movement of vessels).

10. Hound Point is connected to the Forties pipeline system which gathers, by way of sub- sea and underground pipelines, oil from several oil production platforms in the North Sea. The oil from these various fields is gathered at a central point called B.P. Unity from where it travels to Cruden Bay and then to Kinneil Kerse adjacent to B.P.’s refinery at Grangemouth. At Kinneil, gas, which is an integral part of crude oil when it is recovered from the North Sea, is removed and the resultant oil (Forties Blend) is pumped to the tank farm at Dalmeny. The terminal at Hound Point is used to export Forties Blend by way of tank ships which tie up at either HP1 or HP2 for loading.

11. Under the Shippers Agreement B.P. has entered into contracts with other oil producing companies in the North Sea. A preamble to the Shippers Agreement records the oil companies’ desire to have

“Shippers’ Pipeline Liquids transported through and processed within the Forties System and to have the resultant Forties Blend and Gas Products handled within and delivered from the Forties System, and B.P. is prepared to transport and process such Pipeline Liquids and to handle and deliver such Forties Blend and Gas Products.”

The services undertaken by B.P. under this agreement include inter alia delivery of Forties Blend free onboard tankships at Hound Point and of various products onto tankships at Grangemouth. Oil from the different fields is not segregated between the different owners but each of the producing companies is allocated an equity share of the combined flow reflective of their input.

12. A range of vessels uses the Terminal. In excess of 200 visits typically are made by ships in a typical year. Less than 10 are by ships owned and operated by B.P. The greatest number are owned and managed by oil transport companies. A high percentage of the oil exported from Hound point is owned by oil companies other than B.P. although B.P. are responsible under The Shipper’s Agreement for transferring and processing the crude oil from the North Sea to Hound Point and for discharging the oil to any designated vessel. The owners of the oil can decide which vessel they wish to charter. B.P. has a right to reject vessels which do not comply with their safety regime or otherwise meet the company’s standards. As the terminal is a specialised one the ships using it are virtually exclusively oil carrying tank ships. There has been only one occasion when a non-tank ship vessel has used Hound Point and that involved the cruise ship ‘Queen Elizabeth II’ which tied up alongside. This occurred in late 2003 and, being outwith the conditions of Forth Ports’ licence, required the agreement of B.P., although as there was no cargo discharge only Forth Ports benefited financially. Passengers did not embark on to the jetty but were taken off by tender directly from the ship to Hawes pier. Discussions have been held with the owners of that ship and its sister ship ‘Queen Mary II’ about further visits but they have not been attracted back to tie up at Hound Point. There was no evidence of Forth Ports ever having exerted any particular control over B.P.’s choice of vessels using the subjects or as to which of the two terminals should be used by any vessel. There has been no change of any kind in the use of the subjects since 1 January 2003.

Hound Point Legal Agreements

13. Various agreements have been entered into between Forth Ports and B.P.. These agreements remained in force on 1 January 2003 (except in so far as varied by later agreements) and are summarised as follows:-

(i) Heads of Agreement dated 14 February 1974. This related to HP1 and contained the arrangements under which the terminal was built and funded. B.P. built the terminal and on completion passed it over to Forth Ports who paid B.P. a sum equivalent to the original construction cost. Forth Ports agreed to appropriate exclusive rights to B.P. for a period of 15 years and in turn B.P. agreed to make payments to Forth Ports of a sum equal to their borrowing and amortisation costs based on the “price” paid for the jetty plus an additional fixed sum per annum. B.P. was permitted to extend the Term for two further periods of 10 years.

(ii) An Appropriation Agreement (as provided for in the Heads of Agreement) granted exclusive use of HP1 to B.P.

(iii) Leases. HP2 and the Vapour Recovery Platform were constructed by B.P. on sea bed leased to them by The Crown under leases which were consolidated and adjusted into one document giving B.P. rights to occupy the sea bed until 2042 on payment of an annual rent. This rent is subject to review periodically.

(iv) Two agreements were entered into on 29 March and 7 April 1994 between Forth Ports and B.P.. Under the first of these which became known as the “Opportunity Agreement” Forth Ports agreed to pay to B.P. an “opportunity fee” based on the volume of crude oil passed through HP1 and HP2. This payment is stated as being in recognition of the amount of business B.P. brings to Forth Ports’ area. The second, known as the “Harbour Dues Agreement” contains an acknowledgement of the statutory rights of Forth Ports to levy and collect harbour dues in respect of HP1 and HP2. The dues were levied by reference to the ship’s Gross Registered Tonnage. This was subsequently changed so that the dues were calculated by reference to the Deadweight Tonnage, a more easily determined measure of a ship’s capacity, but the financial effect was broadly unchanged. The obligation of Forth Ports to pay the opportunity payment to B.P. has the effect of reducing very substantially Forth Ports’ receipts under the Harbour Dues Agreement. The percentage remaining with Forth Ports in 1994 was about 10% but this has now increased to approximately 35%. This increase is reflective of an increasing preponderance of very large vessels taking on board part only cargoes.

(v) Forth Ports and B.P. entered into a further agreement (the “Licence Agreement”) on 17 and 23 December 2002. This acknowledges B.P.’s entitlement to exclusive use of HP1, that they are tenants of HP2 and the Vapour Recovery Platform and that they are entitled to occupy and operate the whole terminal in terms of the Opportunity Agreement and the second lease. It further acknowledges that the parties wish to alter the entitlement of B.P. to occupy the Terminal. B.P. (the “Licensors”) granted in favour of Forth Ports (the “Licensees”):-

“2.1 … an exclusive licence for the exclusive occupation and operation of the Terminal.

The conditions of this licence included inter alia:-

“2.2 The Licensees shall use the Terminal for the Purpose [the import and/or export of hydrocarbons including the provisions of jetties and associated terminalling and pollution control facilities in relation to the docking, loading and unloading of tankers delivering and collecting hydrocarbons to and from the Terminal] and for no other use whatsoever without the prior written approval of the Licensors.

2.3 The regulation and control of the Terminal will be vested solely in the Licensees acting through their Chief Harbour Master .

2.4 The Licensees will not do or omit any act or permit any act or omission which would constitute a breach of any of the terms of the [leases between The Crown Estate Commissioners and Forth Ports and B.P.] or the Opportunity Agreement.”

2.5 The Licensors reserve to themselves the right which shall be exercised with due regard to the Licensees’ right to occupy and control the Terminal to enter upon the Terminal for the purpose of inspecting them (sic) and carrying out such repairs and maintenance as may be necessary for the Licensors to comply with their obligations (if any) under the Appropriations Agreement, The Harbour Dues Agreement, The Second Terminal Lease and the Opportunity Agreement or otherwise and for such other purposes as the Licensors and the Licensees may agree but it will be at the option of the Licensees to require that the Licensors or any employee of the Licensors vacate the Terminal immediately on being required to do so.”

The licence endures from 1st January 2003 until the earliest of the date of termination of the leases from the Crown Estate Commissioners, including any extension, or the date of termination of the Opportunity Agreement or any extension of it. Notwithstanding the agreed duration either party can terminate the licence by giving not less than 30 days notice. Clause 4 provides that notwithstanding the terms of the licence and for its duration:-

“… all payments of whatever nature and whenever due falling due by the Licensors to the Licensees under the terms of the Heads of Agreement, the Appropriation Agreement and the Opportunity Agreement will continue to be due and payable to the Licensees and B.P. Grangemouth will continue to be entitled to receive from the Licensees the Opportunity Fee referred to in Clause 4 of the Opportunity Agreement.”

In terms of clause 5 the licence was to operate without prejudice to the existing rights of Forth Ports to levy port charges under the Harbour Dues Agreement on ship owners using the Terminal but did not give Forth Ports any additional right to levy additional charges upon B.P. in respect of the Terminal. A “concession fee” of £100 per annum is payable by Forth Ports to B.P. for the duration of the Licence. The Licence provides that except as otherwise expressly provided the licence will be without prejudice to the rights and obligations (if any) of the parties in terms of any other agreement entered into between them in relation to the Terminal including but without prejudice to the generality the Heads of Agreement, the Appropriation Agreement and the Opportunity Agreement.

(vi) The Operations Agreement. An Operations Agreement was entered into between B.P. and Forth Ports on the same dates as the Licence Agreement (and the partial renunciations at the Grangemouth subjects, to which it also applies), also effective from 1st January 2003. Under this agreement Forth Ports appointed B.P. as its contractor to carry out a specified schedule of tasks related to the properties, effectively B.P.’s whole operation at Hound Point. The Agreement is capable of termination by either party on 30 days notice. Forth Ports pay B.P. the sum of £100 to carry out the duties under the Operations Agreement. There are normal clauses requiring B.P. to carry out its duties in accordance with Health and Safety procedures and all statutory provisions and to keep Forth Ports indemnified in terms of any contracts previously entered into between the parties. The access arrangements provide that:-

“… except insofar as reasonably required by Forth Ports as occupier and Licensee of the Facility no employees, agents, contractors or invitees of Forth Ports will be entitled to have access to the Facility during the period of the Agreement without the consent of B.P. and then only on such terms and conditions as imposed by B.P.”

The services as set out in the Schedule are described as being the day-to-day operation of the terminal in a safe and cost effective manner, managing operations for the loading and unloading of tankships, and providing such services as are necessary to support this including the maintenance of the terminal. B.P. is to ensure that the terminal is manned with an adequate number of suitably qualified and competent personnel supported with adequate marine and non-marine equipment. The schedule further provides that B.P. complies with the contracts in place for operations at the Terminal and with local, governmental and Port Authority regulations. B.P. is required to maintain the facilities to the standards equivalent to that applying to all operational assets within the B.P. group. B.P. are also required to comply with certain reporting procedures, involving the regular provision of details of shipping and cargo movements and other information, reporting certain types of incident and convening and attending quarterly meetings with Forth Ports:-

“… for the purpose of delivering to Forth Ports a quarterly performance report and addressing any matters arising therefrom.”

LPG Berth and Jetties, Grangemouth

14. The Grangemouth subjects of appeal lie within Forth Ports’ impounded dock system at Grangemouth. Marine access is available from the River Forth by way of a lock gate which leads to The Eastern Channel. From the Eastern Channel vessels can, if required, transit to the other docks at Grangemouth all of which are owned by Forth Ports.

15. The first subjects of appeal comprises 2 jetties called E1 and E2 along with an LPG loading dock contained within a former entrance lock all with supporting areas of land. They are located within an area known as the embayment area on the North Western side of the Eastern Channel. The second subjects of appeal consist of 4 jetties along with an area of land lying on the South Eastern side of Eastern Channel. All of the jetties are connected to B.P.’s existing oil refinery nearby by means of connecting pipe work which conveys product both to and from the refinery. The pipelines are in the ownership of B.P. who are responsible for and manage the import and export arrangements. These facilities, including the jetties, are all, together with adjoining areas still leased by B.P. and admittedly still occupied by B.P., operated by B.P. in connection with their business. Forth Ports has no financial interest in B.P.’s business other than their general interest in the volume of marine traffic. Forth Ports have no specialist capability which would enable them to operate or supervise the operation of B.P.’s business at the subjects. Captain Pollock, who is B.P.’s Marine Superintendent at Grangemouth, understands that all the areas on which B.P. operate at Grangemouth docks, including the subjects of the present appeal, are leased by B.P. from Forth Ports, as was the position prior to 1 January 2003.

16. As with Hound Point all vessels using Grangemouth Docks are under the ultimate control of Forth Ports through their Harbour Master. He has the ultimate decision in terms of which berth is allocated to which ship. However as B.P. knows the nature of the cargo being imported or exported and which pipelines are most appropriate there is in practice very close liaison between the companies. In practice B.P. will state to Forth Ports the preferred berth and this will in almost every case prevail. Forth Ports’ primary role in relation to the subjects of appeal involves the safe passage of marine traffic both in the River and the Docks. In an emergency they are the ultimate party responsible for the safety of the dock area and for its compliance with the statutory and other authorities. An incident involving a vessel the “ Border Heather” required B.P. to seek authority from Forth Ports for their proposed arrangements for handling the emergency including the proposal for it to remain at its jetty before its subsequent movement to a lay by berth.

17. Jetties E1and E2 as well as the LPG area were the subject of extensive repair and upgrading work before being leased to B.P. All of this work was carried out at B.P.’s expense. E1 and E2 are used for both import and export of liquid oil products. E1, being the westmost, lies closest to another jetty belonging to Forth Ports called the Common User jetty. The Common User jetty is used by Ross Chemicals who own a tank-farm adjacent and they have a pipeline connection between the common user jetty and the tank-farm. Ross Chemical import refined oil, mainly petrol and distribute by road to retail customers. They also have a connection to B.P.’s oil refinery and can secure product from there for their own tank-farm. The common User Jetty is also used by Intermol who bring in molasses there and pipe them by way of a dedicated pipe to their own premises. On occasions vessels under the control of B.P. use the Common User jetty.

18. The LPG jetty is purpose-designed and built to handle the export of Liquid Petroleum Gas which is mainly derived from the gases gathered at the gas separation plant at Kinneil Kerse. This gas is subjected to extreme chilling which converts it to a liquid form. Adjacent to the LPG berth there are storage tanks in which the liquefied gas is stored prior to its transfer to a vessel.

19. The second subjects of appeal at Grangemouth, part of the entry for ‘Jetties’, comprise jetties arranged along the south eastern side of Eastern Channel. There were previously five, but J1 was removed to facilitate the construction of the new entrance lock. Jetties J2 to J5 remain but J5 is now very seldom used. The jetties are connected by pipelines to B.P.’s Grangemouth oil refinery.

20. The vessels using the Grangemouth jetties are generally coastal tankers. At the relevant date B.P. owned and operated 4 such vessels. These are currently being replaced by 3 new ships but the business being conducted is substantially the same. The vessels, in the main, take refined product and distribute this by sea to other B.P. locations in Britain and also Europe. There is, in addition, refined oil sold on a “free on board” basis being oil available for purchase by third party customers for their own purposes. Approximately 40% to 50% of the product passing through the jetties at Grangemouth lies within the “free on board” category. There has been no change in the use of the Grangemouth jetties since 1 January 2003.

21. Forth Ports operate a security system for their entire dock area at Grangemouth which controls landward access. In addition B.P. operates a further level of security in respect of the sections of property operated by them. Accordingly any party wishing to visit any of the B.P. operated properties has firstly to go through the Forth Ports security control point and thereafter, immediately prior to entering the B.P. occupied property, to pass through B.P.’s own security check-point. There is no further security control over entry into the jetties areas which are the subject of these appeals, and there is no physical delineation of the boundary between these and other parts of B.P.’s operational areas.

Legal Agreements at Grangemouth

22. As with Hound Point, various agreements have been entered into between B.P. and Forth Ports. Except in so far as varied by later agreements, these all remained in force on 1 January 2003 and are summarised as follows.

(i) The LPG property is the subject of a lease between Forth Ports and B.P. dated 24 March and 4 April 1977. This lease was the subject of a Minute of Addendum in 1978 which granted to B.P. the lease of a further 2 areas of ground on the same terms and conditions as the principal lease. The lease ran until 1990 and entitles B.P. to use the leased subjects for the berthing of vessels owned by B.P. or chartered by them for the carriage of products on their behalf and for the berthing of any other vessel due to load LPG “free on board”.

(ii) The jetties on the Northern side of Eastern Channel adjacent to the LPG berth were also leased to B.P. by Forth Ports under a lease dated 24 and 27 March 1986 with entry August 1980 and enduring until November 2005. There was an option to renew for a further period of 74 years. The rent was subject to review and was reviewed under the rent review terms in 1995. B.P. is responsible for maintenance and repair and for insurance. There is reserved to Forth Ports the right to inspect the subjects at all reasonable times but, save in an emergency, the prior written consent of B.P. is required.

(iii) The jetties on the Southern side of Eastern Channel are leased to B.P. from Forth Ports under a lease dated 25 October and 1 November 1971. This lease runs until 2020 and grants B.P. the exclusive use of the jetties forming part of the leased subjects subject to the direction and control of Forth Ports’s Harbour Master. The lease regulates the use namely:-

“discharging or loading petroleum products (including shale and related products) as may be handled by [B.P.] in carrying on their business and for no other purpose whatever without the consent in writing of [Forth Ports]”

(iv) Partial renunciations. In respect of all three lease agreements the parties entered into partial renunciations. These are contained in three separate Minutes of Variation of Lease, all dated 17 and 23 December 2002 but effective from 1 January 2003 and are in mutatis mutandis identical terms. The renunciations incorporate the marine parts namely the jetties along with areas of land immediately to the rear, leaving the balance of the originally let subjects, land, subject to the terms of the original leases. These agreements narrate that Forth Ports have requested and B.P. have agreed, in consideration of the sum of £1 paid by Forth Ports to B.P., to grant a renunciation of the tenant’s interest in the lease, but only in respect of the jetty areas, and to vary the terms of the lease. With effect from 1st January 2003 B.P. renounced and Forth Ports accepted the renunciation of the leases in respect of certain specified areas (the ‘Renounced Subjects’, i.e. the Grangemouth subjects of appeal) and B.P. were relieved of their obligations under the leases. The level of rent payable for the subjects remained that which was payable prior to the renunciation. The rent review terms of the extant leases were amended so that notwithstanding the terms of the renunciation for rent review purposes it is to be assumed that the renounced subjects still form part of the leases. Both parties have the right on 30 days notice to terminate the renunciation agreements in which case the renounced subjects are once again included within the original leases.

(v) As noted above, the Operations Agreement also applies to the Grangemouth subjects.

Quarterly Meetings

23. There has been one change since 1 January 2003. Prior to that date, information about shipping volumes and the like was regularly exchanged. In implementation of the reporting requirements of the Operations Agreement, there was instituted in 2003 a programme of quarterly meetings at which B.P. reported to Forth Ports on a prescribed range of matters related to the operation of the marine facilities. These quarterly meetings put on a more formal footing the reporting arrangements which had previously existed between Forth Ports and B.P. The information passed over had generally been available to Forth Ports previously although there was a slight extension of the range. Principally, the effect of the quarterly meetings was on the manner in which information was passed over rather than in regard to its content and extent. Minutes of these meetings disclose that the only matter actually discussed has been some concern about throughput levels at Hound Point. There was no evidence of any particular effect of the discussions at these meetings on the operation of any of the appeal subjects.

Other Subjects

24. Similar arrangements to those entered into at Hound Point and at Grangemouth transferring “exclusive rights” from B.P. to the port authorities were entered into in relation to other broadly similar oil facilities in Scotland, namely at Flotta in Orkney, Sullom Voe in Shetland and Nigg in the Cromarty Firth. We heard no evidence as to the extent of previous legal agreements relating to these facilities.

25. Two marine terminals similar to the Hound Point subjects are operated by two other oil companies, Shell and Exxon, at Braefoot Bay, near Aberdour, and linked with the Mossmorran petro-chemical complex. Dues are payable to Forth Ports in respect of vessels using these facilities. At these subjects, there have apparently been no agreements of the type relied on in the present appeal as changing the occupancy position.

26. Two other slightly specialised facilities within the area of jurisdiction of Forth Ports are presently each used by only one party, namely a ‘common oil users jetty’ in Leith, which is however available for use by other companies, and the ‘Ro-Ro’ facility used by the North Sea passenger vessel operating daily to and from Rosyth. The latter is operated and manned by Forth Ports and could be used by other vessels at other times.

Rating Treatment

27. The Hound Point subjects and the whole of the subjects leased by B.P. at Grangemouth, including the subjects of appeal, have, up to and including the 2000 Revaluation, been separately assessed with B.P. entered as the occupier.

28. Forth Ports are assessed for local rating purposes under the Docks and Harbours (Rateable Values) (Scotland) Order 2000 (“the Order”). They are an ‘authority’ within the meaning of the Order. Subject to certain exceptions, lands and heritages “occupied by an authority and used for the purposes of the undertaking carried on by the authority” are, in accordance with Section 6(1) of the 1975 Act, not entered in the ordinary roll. The formula for calculating the Rateable Value of such lands and heritages is based on the authority’s relevant income, including the various forms of ships dues (in the case of Hound Point, after netting off the payment to B.P. of the “opportunity fee”), less appropriate expenditure. There are a number of allowed adjustments including the exclusion from relevant income of rents received from properties separately assessed. Thus at Grangemouth the rent received by Forth Ports from B.P. in respect of the parts still leased to B.P. (which rent is calculated on the basis of the whole of the B.P. operated areas including the subjects of appeal) is deducted and therefore does not come into account. A set percentage is taken to convert the net income into Rateable Value. The assessment calculated under the Order is then allocated to the different local authority areas. The extent and type of property included in Forth Ports’ undertaking has accordingly no direct bearing, as such, on the level of its assessment. The removal of the appeal subjects from their assessment on the basis of occupation by B.P. and their incorporation in the assessment of Forth Ports would not alter Forth Ports’ rating assessment.

29. At each of Sullom Voe, Flotta and Nigg, the values of ‘jetty’ parts of larger entries on the valuation roll have, by agreement with the local assessors, been left out of account. The two marine terminals at Braefoot Bay are entered on the roll, with Shell and Exxon as occupiers, and included in value.

30. The Common User Jetty at Grangemouth, the common oil users jetty at Leith and the ‘Ro-Ro’ facility at Rosyth are not entered on the roll or included in any assessed values other than Forth Ports’ formula valuation. The respective assessors accept that these lands and heritages fall within the exclusion under the Order as being occupied by Forth Ports.

Appellants’ Submissions

31. Mr Haddow submitted by way of introduction that in each case the entitlement of B.P. to operate at the subjects had changed as a result of the 2002 agreements. Formerly, their entitlement was as tenants, and they had then undoubtedly been occupiers. Now, their entitlement was as contractors under the Operations Agreement. There was clearly a ‘rival occupancy’ issue. The absence of Forth Ports’ employees at the subjects, and the fact that ships arrived at the subjects when B.P. wanted them to, did not indicate an absence of occupation and control by Forth Ports. On the evidence, Forth ports undoubtedly had the final say and control over the ships arriving alongside the subjects. The assessors were confused as to what was being looked at, and saw only the interests of B.P., as all part and parcel of the one thing. B.P. of course had contractual obligations towards their customers, but these could not govern the position between B.P. and Forth Ports. Forth Ports had a very real interest, which was not restricted to the organisation of the river and safety matters.

32. Mr Haddow pointed out that such a question in relation to ports had not been the subject of the court’s consideration in Scotland. He referred to two older English decisions, Allan and Young & Co, in each of which the court had looked at what was actually done to see whether the harbour board had, in entering into agreements, conferred rights of exclusive use and accommodation. These cases had each been considered in the Westminster Council case, where Lord Russell of Killowen had set out the general rules, which had been recognised as applicable in Scotland (Arbuckle Smith). When one looked at the subjects themselves, one recognised that the uses made by B.P. and Forth Ports were effectively the same. The question as to who was in paramount occupation then became a question of control. Forth Ports had the top, or final, control. Cases such as John Laing, addressing the question whether occupation was beneficial rather than competition between two occupiers, were different in nature.

33. Mr Haddow went on to argue in more detail the position about the competing uses of the disputed areas of the Grangemouth subjects. He pointed to the distinction between the quay facilities, where ships were enabled to enter the harbour area to be brought alongside to enable the vessels to be loaded or unloaded, i.e. the marine part of the activities of a harbour authority, and the port, or cargo handling, part. The assessors had failed to recognise that dividing line between the physical areas next to the jetties, required for the purpose of using the berths, and the cargo handling areas. In the marine part, Forth Ports had not parted with their right of exclusive occupation. It was undoubtedly the parties’ intention to leave paramount control of this part with Forth Ports, leaving them as occupiers. In the Operations Agreement, they had not given up control: B.P. were contractors, subject to their control. This was not like, for example, a coffee bar at an airport with a completely different purpose (c.f. Old Consort). The case was concerned with the berthing facility, not the cargo handling. Mr Haddow referred particularly to paras. 6 and 9 of the Operations Agreement, in relation to reporting procedures and access. The substance of the access provision was to entitle B.P. to stop people going on the premises. It was plain that B.P. had given up the right to control operations at the renounced subjects and were only providing services under the operation and subject to the control of Forth ports. The services were not confined to berthing but involved day-to-day operation of the facility, services which Forth Ports did not have the expertise to provide themselves. The purposes and use of the marine facilities by Forth Ports were the same as those of B.P., but there was no doubt that the use was subject to Forth Ports’ control. It was unimportant whether the provision was to the shipping public in general or dedicated to one user only. The position at Hound Point was essentially similar.

34. With regard to the requirement under the operations agreement for reporting procedures, this was not simply some dressing up of a position which did not exist. It was an active step taken, of significance in the question as to who was truly in control. It related to supervision of what was done by B.P. In response to a question, Mr Haddow accepted that there was no evidence of anything being changed or done differently following on such reporting. The change, however, was that information was passed over, and B.P.’s marine superintendent was present at meetings with Forth Ports. The reason for this was the change in the position on 1 January 2003, and the fact that no action was required as a result did not mean that Forth Ports did not have control, merely that B.P. were operating properly in accordance with the interests of Forth Ports.

Respondents’ Submissions

35. Mr Doherty accepted that the issue was which company was in rateable occupation, and that if Forth Ports were in occupation the subjects would fall within Article 3 of the 2000 Order.

36. As regards Hound Point, Mr Doherty further accepted that looking at the Licence Agreement and the Operations Agreement in isolation, these did bear to grant exclusive occupation to Forth Ports. He submitted, however, that that was a wrong approach. It was necessary to consider the background, in particular that B.P. were the tenants of HP2 and the VRP for which they paid substantial rent; that B.P. constructed HP2 and theVRP, and financed the construction of HP; that under the Opportunity Agreement exclusive possession of the terminal was appropriated to B.P., who were fully responsible for its operation, repair, maintenance and apparently costs, and for its reinstatement, and could be required to remove on its expiry; that the terms of both the Licence and the Operations Agreement were, except as expressly provided, without prejudice to the rights and obligations in terms of other agreements including the Opportunity Agreement. These previous agreements were still extant. It was necessary always to look at the substance of a transaction and the factual position on the ground, not just the legal form – Allan, per, Lord Blackburn at 193, 194; Armour, 14-21, referring to Old Consort. The appellants were ignoring both the background and the financial terms of the Licence and Operations Agreements. The fact of nominal payments under these was very relevant to the issue whether the formal position represented the real factual basis of the arrangements. In substance, B.P. were not in possession on behalf of, or as contractors for, Forth Ports, and rateable occupation had not passed to Forth Ports. Nothing in substance had changed. The aim and driver of the agreements had been to avoid the payment of rates on the basis that B.P. would share the benefit of that with Forth Ports. The analysis in John Laing, on the issue whether the contractors were occupying on their own behalf or on behalf of the Ministry, could not easily be distinguished. It was essential to ask whether B.P. were in fact occupying simply as contractors and plain, on the evidence, that they were not. Rather, they were occupying for the purposes of their own business of exporting Forties Blend to their known customers and the shippers to whom they were obliged under the Shippers Agreement. That agreement was a clear indication of B.P.’s purposes and whether they were acting in their own business or simply as contractors.

37. Mr Doherty accepted that Forth Ports had an interest in berthing the ships, but when the nature and character of B.P.’s possession was considered, the reality was that they were not merely possessing as agents. They were occupying for the purpose of their own business. He submitted that B.P. had custody of the oil, which it was part of their business to process and transport : ownership of it was not critical. The facilities could only be used for Forties Blend, in conjunction with B.P.’s tank farm.

38. Further, said Mr Doherty, B.P. were de facto in exclusive occupation on the ground. Forth Ports’ contractual ability to direct had no point, was not intended to happen, and did not happen. Forth Ports had no measure of control over the quality and character of the occupation, and although they made regulations, nothing they did gave rise to material interference with the occupation – Armour, 14-03; Westminster Council. B.P. chose the berth and controlled access to and from it. The reporting and quarterly meetings merely involved the provision of information in a consolidated and fuller form than before. This did not go beyond the sort of regulation one might expect from a landlord. Forth Ports were not in a position to dismiss B.P., because if they gave notice under the Operations Agreement B.P. could terminate the licence under similar notice and would continue to have the right to occupy.

39. Mr Doherty indicated that his primary position was that there was no rival occupancy. Forth Ports did not make any actual use of the subjects, or if they did, by piloting and directing ships alongside, that did not interfere with B.P.’s occupancy. Alternatively, if there was a rival occupancy, having regard to what took place on the subjects, Forth Ports’ control did not interfere materially with B.P.’s occupation.

40. Mr Doherty said that at Grangemouth the same principles applied. Looking at the Operations Agreement in isolation, again this was consistent with occupation by Forth Ports, but account had to be taken of a similar background. Previously, the three areas had been let and there was also a grant of exclusive right to use the LPG berth. The renunciations with effect from 1 January 2003 had involved no change in the rent or in the rent review hypothesis. This was a highly artificial arrangement. The fair and natural inference should be drawn that the extra amount above the market value for the retained land was in respect of the right to exclusive occupation and use of the renounced parts. The repair and maintenance obligations had simply shifted to the Operations Agreement. B.P. had built the facilities at considerable cost, and controlled access to each area. The pipes serving the areas continued to belong to B.P. Here also, the nature and character of B.P.’s possession was not as contractors for Forth Ports but on B.P.’s own account, for their own business.

41. Mr Doherty looked at the uses of the parts of the Grangemouth subjects. The LPG berth was used for B.P.’s own ships and ships nominated under the Shippers’ Agreement. It could not be used by anyone else. Jetties E1 and E2 were used for the export of B.P. refined products and the import of raw materials. E1 was also used for the export of condensate, and E2 had some (unused) LPG capability. Again, on the evidence, there was exclusive use by B.P. Jetties 2, 3 and 4 were used for the export of condensate under the Shippers Agreement and also for the export of refined products and import of feedstocks, all using B.P. pipes. There were some third party imports at J4, by commercial arrangement with B.P., mainly using B.P. pipes and facilities. In respect of this use, B.P. paid and recouped the dues and recovered a charge for the use of the facilities. In relation to control, the position was substantially the same as at Hound Point : nothing Forth Ports did gave rise to any material interference. B.P. chose which berth was to be used, and in practice Forth Ports never refused or interfered. The reporting requirement did not involve interference, and, again, Forth Ports were not in a position to dismiss B.P.

42. Mr Doherty said that Allan and Young & Co. did not assist much. In the first, there had been power to berth without the tenant’s consent, and also to levy a quay rent from others. In the second, a degree of control had been retained, to go in and maintain machinery. That was similar to the position here. The ‘comparisons’ mentioned were also of no great assistance. It was clear that the Rosyth ‘Ro-Ro’ facility was in the rateable occupation of Forth Ports, who provided the berth supervisor and the dock labour. At the Grangemouth common users’ jetty, Forth Ports had paramount occupation, as the main user, Ross Chemicals, did not have exclusive occupation. Again, the common users’ oil jetty at Leith was a facility which it was commercially attractive to offer to others. The positions at Sullom Voe, Flotta and Nigg Bay had not been explored in any detail in evidence, and not all the documentation in respect of these subjects was available, there being similar provisions in the new agreements there to the effect of saving existing agreements. Mr Haddow had not advanced a ‘double-counting’ argument, which in any event did not arise where the ‘formula’ valuation used turnover with deductions: there was no true double-counting position, the rents having been excluded. Further, the treatment of the subjects was consistent with that at Peterhead and Braefoot, except that, these subjects being owner-occupied, there was no deduction of rents from the formula valuations.

Tribunal’s Consideration

43. The question for the Tribunal is whether after 1 January 2003, having regard to the agreements entered into in 2002, the other agreements then in force and the position on the ground, so far as relevant, B.P. or Forth Ports were in rateable occupation of these subjects. This being a ‘material change’ appeal, the onus rests with the appellants, that task being perhaps more difficult where there has admittedly been no change at all in the use made of subjects of which they accept they were undoubtedly previously the occupiers. However, as it is primarily a question of construction and interpretation, onus is not a substantial factor. The assessors did not oppose the competency of these appeals as ‘running roll’ appeals, i.e. they accepted that if the appellants’ arguments were correct, there would be a ‘material change of circumstances affecting the value of the subjects’. The question ultimately is not whether there has been a change, but who has been in rateable occupation since 1 January 2003.

44. The principles applicable to the issue of rateable occupation are well established in cases of the highest authority, were not the subject of any dispute in this case and may be summarised for the purposes of this appeal as follows:-

1. Rateable occupation is not synonymous with legal possession.

2. Legal title is neither necessary nor conclusive. As Blackburn, J. put it:-

“In order to ascertain this, we must see what was the intention of the parties, and that depends not so much upon what words may have been used in the documents employed; for the word ‘let’ may have been used without there being a letting, and the word ‘let’ may have been carefully avoided, and yet it may appear that in fact the occupation has been parted with. What we have to look at, taking all the circumstances together, is, to see whether or not there was any exclusive occupation parted with by the board to these persons …

The word ‘occupation’ is used, but we must look not at that word, but at the substance of the thing.” (Allan, at pp. 192,193)

3. The occupation must have some degree of permanence.

4. The occupation must be exclusive, but if more than one party has occupancy rights, the question, which is a question of fact, is whose occupation is paramount and whose subordinate, having regard to the premises and the purpose of the occupation. The question has to be considered in relation to the subjects themselves.

5. Issues of control must be examined in the light of the facts of each case, the question being one of the extent to which the exercise of control interferes with the actual occupier’s enjoyment of the premises for the purpose for which he occupies them, or would be inconsistent with his enjoyment to the exclusion of others. Control only really becomes material when its exercise affects the use and enjoyment of the premises for the purpose for which they are occupied.

45. The authorities setting out these general principles are clear to the effect that each case must be decided according to its own facts and circumstances. There is apparently no Scottish decision at any level in relation to subjects of this particular kind. We can, however, draw such guidance as is available from the two older decisions of the higher English courts in relation to port subjects, it being recognised that in this particular area there is no material difference between the Scottish and English positions. In Allan, the case in which Blackburn J. stressed the need to look at the substance of agreements, the docks and harbour board, who had control over the docks system, appropriated certain berths, with sheds attached, for the use of a company’s steamers. However, they kept rights to allow the berths to be used by other vessels from time to time and also to impose quay rents on goods lying there and to retain these rents. The Divisional Court held that the board had not parted with exclusive possession and remained the rateable occupiers. In Young & Co., by contrast, the board demised certain warehouses to the appellants for use as bonded warehouses, while retaining controls over sub-letting, the right to inspect the premises and certain particular controls over the company’s use of the premises. The court reviewed the effect of the terms of the agreement and decided that it was consistent only with conferring exclusive occupation on the occupiers. In each case, the court looked at the substance and reality of the agreements, in the context of the particular subjects and their use.

46. We could also look at the treatment of certain other subjects to which reference has been made, but that can at best only be of some slight persuasive effect and in any event the precise facts, and the reasoning used to support that treatment, have not really been laid before us to any great extent.

47. We appreciate and accept the need to look only at the subjects themselves. Any consideration which we give to the wider holdings and undertakings of the parties – in this case, B.P.’s ownership of the Forties Pipeline System and their business obligations in relation to that, and Forth Ports’ responsibilities on the estuarial waters and elsewhere within the ports area at Grangemouth – must only be for the purpose of elucidating the position at the subjects of appeal themselves.

48. The subjects at Hound Point are suitable only for use, and are only used, in connection with B.P.’s business as operators of the Forties Field Pipeline system. They are expensive specialist subjects effectively provided, and maintained, at B.P.’s expense. They are within a B.P.-controlled exclusion zone. Having been previously in part let to B.P. and in part appropriated to B.P.’s exclusive use, they are now the subject of a licence by B.P. in favour of Forth Ports. That licence confers exclusive occupation on Forth Ports, subject to the other agreements between the parties, including the agreement appropriating the subjects to B.P.’s exclusive use. Payment for the licence is nominal, and the permitted user is, in effect, restricted to B.P.’s business. Further, Forth Ports have, in the other 2002 agreement, appointed B.P. as contractors to operate the subjects, again for a nominal consideration. While other oil industry operators could be envisaged, Forth Ports could not operate the subjects. Both these agreements, the licence and the operations agreement, are on the same short mutual notice terms, with the result that if Forth Ports were to terminate the Operations Agreement B.P. could at the same time terminate the licence. B.P. bears the whole cost of this facility; operates it on a permanent basis for its business, from which it derives the profit; and receives only a nominal rent or licence payment. In these circumstances, we do not accept that Forth Ports have any real control over the identity of the operator or the operation of the subjects.

49. One product of the 2002 agreements is a system of quarterly meetings. From the evidence of the earlier agreements involving a sharing of Forth Port’s statutory revenues with B.P. and of what happened before in relation to communications between the parties, we know that even without these new agreements there was a degree of common interest in the extent of use of the facility. Forth Ports have the particular statutory involvement in issues of marine safety. Information about these matters had apparently been communicated, although less regularly and less formally, to Forth Ports. Looking at the terms of the reporting obligation undertaken by B.P., and at the limited extent of actual discussion at the new meetings, we do not find in this any real indication of occupation, far less paramount occupation, by Forth Ports.

50. The system of ‘opportunity payments’ by Forth Ports to B.P., unchanged in 2003, seems to us to underline B.P.’s predominant role at the subjects. Whatever the purpose of these payments, they cannot be seen as payments to B.P. to operate the subjects on behalf of Forth Ports, because they were introduced many years prior to the Operations Agreement. Rather, they appear to represent a recognition that the B.P. operation at Hound Point is a good source of business for Forth Ports. There seems to be no question of B.P. sharing any of the revenue of their business as operators of the Forties pipeline system, which includes the subjects of appeal, with Forth Ports. B.P. receive that revenue, and bear all the cost (apart from Forth Ports’ nominal payments under the Licence and Operations Agreements); and, further, Forth Ports pay B.P. amounts equal to well over 50% of the revenue which they earn from vessels coming to Hound Point.

51. The fact that B.P. bear all the responsibility and expense of services, rent, repairs renewals and insurance, appears to us very difficult to square with the suggestion that they are neither owners nor occupiers but merely contractors. In Old Consort, where the ratepayers had some (but not all) of these responsibilities, Lord Patrick said:-

“If the ministry were in paramount occupation of the premises, it would be strange that the company would pay for these services.” (page 234)

52. The fact that B.P. only have an equity share in a small proportion of the crude oil passing through the facility seems to us to be irrelevant to the question whether B.P. or Forth Ports are the occupiers. In relation to that oil, both companies are involved in the provision of a service – transport. It is not therefore surprising to find that the oil mostly belongs to others. If this factor is relevant, B.P.’s interest in it, as part owners and as possessors, is far greater than that of Forth Ports who, neither before nor after loading, have any proprietary or possessory interest in the oil. We do not think that this factor takes the case in the direction of a ‘common users’ facility, where the facility is maintained, and its use is actually controlled, by Forth Ports for the use of more than one operator, who may or may not own the cargo.

53. Recognition, however, that both B.P. and Forth Ports are involved in the operation of transporting the cargo, in this case crude oil, brings us to examine a crucial stage in Mr Haddow’s argument. He submitted that the two companies have the same interest in the use of the subjects, and then that Forth Ports had practical control, making them the occupiers. He stressed that attention must be focused on the subjects themselves. When that is done, he said, one activity – the activity of berthing, loading and unberthing ships - is found, and in that activity B.P. and Forth Ports each have the same interest. It appears to us that this is superficial. Forth Ports do have an involvement, and some financial interest, in the activity at the berth. Their involvement, however, is primarily in the regulation of it in order to ensure a safe shipping environment in their area. They have no control over the extent of it, and little control over how it is organised on the land side. They of course have a general financial interest, but, again, it seems to us that this interest is akin to that of a landlord who of course has some interest in the prosperity of the tenant’s business (more marked, of course, where the rent is on a turnover basis). By contrast, B.P. have the essential business interest, and indeed necessity, of fulfilling on behalf of its customers, this, the final stage of the journey of the crude oil from the North Sea to the ship.

54. In answer to a question from the Tribunal about the Old Consort case, Mr. Haddow suggested that the difference was that the purposes of the coffee bar business were entirely different from those of the airport operator: here, looking at the subjects themselves, the purposes of both companies were the same. We do not agree. Further, we consider that the argument that B.P. are, as a result of the 2002 agreements, merely contractors performing services on behalf of Forth Ports is considerably weaker on the facts of the case than the similar, unsuccessful argument in the Old Consort case.

55. Forth Ports on the other hand have certain rights of control. They have the statutory right and duty to regulate movement on the estuary and control berthing and unberthing activities. This gives them the final say in relation to movements around the estuary and access to port facilities, including Hound Point. In practice, while they do every day exercise control over actual shipping movements and thus can affect arrival and departure times, the right of control over the use of the particular facilities is only exceptionally invoked and there is no evidence of that ever having been invoked in circumstances in which B.P. disagreed. In addition, the Operations Agreement confirms Forth Ports’ right of access ‘as occupier and licensee’. In practice, it seems to us that in this case this is a right without much content, something akin to that of a landlord under a lease for inspection purposes. There is no evidence that it has ever been insisted upon. There is no evidence that Forth Ports have, under these agreements, ever sought to impose any other vessels (which would in any event have no right to ship oil from the Dalmeny tank farm, which is for all practical purposes the only regular use of the subjects) on B.P. Some years prior to January 2003, a cruise ship, ‘Queen Elizabeth II’, was allowed to berth at the subjects. Its passengers could not of course disembark on the facility. Subsequent discussions about possibilities of repeating this, with that ship or ‘Queen Mary II’, came to nothing. It appears to us that the reality of the 2002 agreements is to add little, if anything, to Forth Port’s statutory rights of supervision and control of shipping movements and port uses.

56. Mr Haddow, having ascribed to the two companies an equal interest in the use of the subjects, describes this control by Forth Ports as the practical control which gives Forth Ports paramountcy. We cannot agree. In our view, Forth Ports, despite the terms of the licence agreement, have little more than regulatory control over the occupation of the subjects. They have no effective control over the use of the subjects. Indeed, the very commonality of interest suggested by Mr Haddow helps to ensure that Forth Ports do not in practice “interfere with the enjoyment by the occupant of the premises in his possession for the purposes for which he occupies them” (Westminster Council, at page 532). The agreements, including the 2002 agreements, appear to us to be entirely consistent with that In our view, B.P. are the rateable occupiers, as they previously were.

57. The situation at Grangemouth differs in some respects. Firstly, the areas in question are clearly owned by Forth Ports and were previously parts of subjects leased to B.P., but the leases have been renounced in respect of these areas. What we find here, however, is that B.P. pay the same rent for the remaining parts as they formerly did for the whole. In view of the agreements, it cannot be said that they pay rent for the subjects of appeal, but, as the revised rent review terms make clear, they pay extra rent, based on the rental value of the subjects occupied along with the leased subjects. So they pay an amount exactly equivalent to a market rent for the subjects. Then, again, they have been appointed as contractors, at a nominal consideration. Again, both (in this case) their renunciation of the subjects and the operation agreement, are on the same mutual short notice basis, so that B.P. are in a position to ensure that they will always be the operators. Again, they bear all the operational cost and risk of the subjects. As at Hound Point, the agreements mean that all the responsibility for payment of rent, repairs, insurance, etc. is with B.P. Although there is no equivalent agrrement to the Opportunity Agreement, the underlying relationship between the two parties seems to us patently similar. As regards agreements, therefore, there is no material difference between Grangemouth and Hound Point.

58. The physical situation at Grangemouth is different in some respects. Firstly, the subjects, i.e. the areas renounced, include the strips of land immediately adjoining the jetties and the LPG berth, but we agree with Mr Haddow that these can be seen as operational land of the port facilities and this does not distinguish the situation from that at Hound Point. Secondly, the subjects, together with the remaining leased subjects, are all within Forth Port’s port area, access to which is controlled by Forth Ports. However, the whole of the “B.P. areas”, i.e. including the subjects and the remaining parts still leased, are secured by B.P., who control access to these areas just as they control access to Hound Point. Thirdly, although they are, again, for the main part situated at the end of pipes, the subjects may be slightly less dedicated in their use – they are not, for example, limited to loading crude oil. Nevertheless, they are again to all intents and purposes used for B.P.’s businesses, either as operators of the Forties field pipeline or as oil refiners at Grangemouth.

59. Once again, Forth Ports have a measure of control in the sense that they can direct the movements of ships. Once again, the impression, however, is of regulatory control exercised, so far as access to particular jetties or berthing facilities is concerned, only very occasionally. The ‘Border Heather’ incident, which appears on the evidence to be the only occasion when Forth Ports did any directing of that kind, in an emergency situation, bears this out. Forth Ports’ right of access is expressed in the operations agreement applicable to Grangemouth as well as Hound Point, and our previous comments apply to that. One might add that the very need to state a right of access for owners illustrates the preponderant position of B.P. In Old Consort, Lord Patrick, having referred to the observations of Lord Wright in an earlier case, pointed out that reservation of such rights tended to indicate a possession adverse to the airport operator. As with Hound Point and for the same reasons, we do not accept that Forth Ports have practical control over the use of the subjects and we consider that these subjects also remained in the rateable occupation of B.P.

60. The assessors accepted that their counterparts responsible for the valuations of subjects at Flotta, Sullom Voe and Nigg which undoubtedly bear some similarity, had agreed to take those subjects out of valuation. The appellants lodged certain productions in that regard but did not give detailed evidence, although it would clearly have been open to them to do so. Mr Haddow rather relied mainly on cross-examination of the assessors about these other subjects. Although the Assessor for Central Scotland had made some investigation of the position, it was clear that he had no real first hand knowledge of any of the properties nor was he knowledgeable on the terms of any legal agreements entered into. These other assessors had apparently had the benefit of counsel’s opinion, but we have no knowledge of what was asked of counsel, what assumptions he made or was asked to make, or the basis of his view. Nor is the treatment of these subjects supported by any decision on appeal. The circumstances at Hound Point are different from those at Grangemouth (although not sufficient in our view, to result in a different decision), and it is quite possible that the circumstances at these other subjects may also be different as they involve different port authorities and different oil companies. We have not been able to make sufficient findings to give any weight to these references.

61. Reference was also made to a common user quay within Leith Docks adjacent to property leased to and occupied by ST Services where a dedicated pipeline is laid to the common user quay. Currently ST is the only user of the quay but it remains within Forth Ports’ assessment. The Ro-Ro berth at Rosyth is used on a daily basis by Superfast Ferries who run a regular ferry service to Belgium. In this case the tying up of the vessel is undertaken by Forth Ports’ personnel, and the berth is also the ‘default berth’ for Orkney and Shetland ferries in the event of inclement weather closing their normal berth in Aberedeen. As with the oil related comparisons we are not persuaded that the circumstances surrounding these two quays offer us any assistance. In the case of the Leith subjects although ST is the only user at present this is a reflection of the current demand position and other users could make use of it if they wished. In the case of Rosyth it was clear that although Superfast are the regular users they do not have a control situation similar to the position of B.P. at Hound Point and Grangemouth. In neither case was there any indication that ST or Superfast contributed (beyond the dues) to the financial cost of the facilities or that they received any rebate from Forth Ports for the business attracted.

62. In any event we are satisfied that our primary consideration must be to the facts demonstrated at the appeal subjects. For the reasons given we are of the opinion that the appellants were, after 31 January 2003 as before that date, occupiers of the subjects of appeal.

63. We refuse these appeals.