Lands Tribunal for Scotland


Valuation for rating – Rateable Occupation – Marine Terminal, Jetties, etc. – Use in connection with ratepayers’ business – Whether in rateable occupation of ratepayers or part of port authorities’ undertaking assessed under Docks and Harbours (Rateable Values) (Scotland) 2000 – Effect of various agreements in respect of occupation and operation of subjects – Whether agreements licensing ports authority to occupy, or partially renouncing subjects leased from port authority, effective in circumstances to transfer rateable occupation to port authority.

BP Oil Grangemouth Refinery Limited v (1) Assessor for Central Scotland and (2) Assessor for Lothian Valuation Joint Board
4 May 2005
LTS/VA/2003/72, 73 and 80

The ratepayers’ business carried on at the subjects was part of their responsibilities under a Shippers Agreement for the transport and processing of oil from the Forties Field belonging to a number of oil companies. The subjects of appeal were, at Grangemouth, certain jetties and a tank farm, and at Dalmeny, two marine terminals and an associated vapour recovery platform. The ratepayers had effectively paid for the construction of all the subjects and bore all the ongoing costs and responsibilities. Prior to 2003, the subjects had admittedly been in the rateable occupation of the ratepayers. The ratepayers had leased parts of the subjects from Crown Estate Commissioners and parts from the port authority, Forth Ports plc. The port authority had ultimate control over shipping movements and berthing arrangements. The port authority paid the ratepayers certain percentages of the dues levied on ships and their cargoes. In 2002, the ratepayers granted a licence of the subjects at Dalmeny and partial renunciations of their leases of the subjects at Grangemouth in favour of the ports authority, for the sole purpose of maintaining that the ports authority had become rateable occupiers and that the rateable values were therefore included in the assessment, under the Docks and Harbours (Rateable Values) (Scotland) Order 2000, of the port authority’s undertaking. These agreements were subject to an Operations Agreement appointing B.P. as operators, the considerations for all these new agreements being nominal and the agreements being terminable at short notice. The rent of the remainder of the leased subjects at Grangemouth was to remain the same. The ports authority normally did not interfere in the ratepayers’ choice of berths for ships or in their operation of berthing and unberthing. A cruise liner had once been allowed to berth at Dalmeny, and the ports authority had in one emergency situation directed a vessel to particular jetties at Grangemouth. The ratepayers controlled the security of the subjects.

Held, refusing the appeals, the principles applicable to the issue of rateable occupation, including rival occupancies, were well established and not in dispute. It was necessary to look at all the facts and circumstances, including the effect of the various agreements and not just their terminology. The Tribunal had to look only at the subjects themselves. The Dalmeny subjects could only be used in connection with the ratepayers’ business. The 2002 agreements ensured that the ratepayers continued in control over the operations at the subjects. It could not, in the circumstances, be affirmed that the ratepayers and the port authority had exactly the same interest in operations at the subjects leaving the port authority’s ultimate control decisive. It was difficult to square the fact that the ratepayers bore the full financial responsibility for the subjects with the suggestion that they were neither owners nor occupiers but merely contractors there. The situation at Grangemouth differed in some respects, but the arrangements in the various agreements in force, including the 2002 agreements, were materially similar. Here also, the ratepayers bore all the operational cost and risk. The extent of control and involvement of the port authority, and their interest in the business activity at the subjects, were akin to those of regulators or landlords, not tenants or occupiers. Evidence of the rating treatment of certain similar oil-related subjects elsewhere in Scotland, which had not been the subject of any appeal decision, was not sufficiently detailed to have any weight attached to it; and the treatment of certain other marine subjects in the port authority’s area was, on the information available, consistent.

Authorities referred to:-

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

See full decision:  LTS/VA/2003/72, 73 and 80