Ratepayer incinerating refuse – Part of operation devoted to commercial generation of heat and electricity – Whether rateable value to be assessed in accordance with Electricity Generators (Rateable Values) Order 1989
The appellant ratepayer (the company) operated a waste disposal site, a proportion of the incineration process being devoted to electricity generation and the provision of heat in the form of hot water to a major industrial user. It was common ground between the company and the rating authority (the authority) that, despite those operations, the primary function of the site was the disposal of waste. Contrary to the view of the authority, the company maintained that the rateable value of the site should be assessed according to a formula laid down in the Electricity Generators (Rateable Values) Order 1989, which, if applicable, would yield a rateable value of £146,034, as distinct from a conventionally assessed value of £928,500. The issue turned on whether, for the purpose of Article 3(2)(a)(ii) of the order, it could be said of the site that “its primary function [was] in connection with a scheme for the production for sale of both electrical power and heat”. The company contended that it was sufficient to show that a connection existed between the primary function (waste disposal) and the production operations. The authority maintained that the primary function of the site itself had to be such production, and that the provision should be interpreted as if reading “its primary function is [its use] in connection with [the production operations]”. The company’s argument was accepted by the Lands Tribunal, but rejected by the Court of Appeal. The company appealed to the House of Lords.
Held: The appeal was dismissed.
1. The authority’s interpretation was to be preferred for a number of reasons, notably: (i) if interpreted as contended for by the company, the provision would effectively reproduce the rule that the order was intended to replace; (ii) the authority had demonstrated possible anomalies if the company’s interpretation were to be applied in different circumstances; and (iii) the authority’s interpretation accorded with the explanatory notes to the order, it being permissible to refer to these where the order was ambiguous: see per Lord Oliver in Pickstone v Freemans plc [1989] AC 66 at p127.
2. Contrary to the view of the Court of Appeal, the expression “in connection with” did not always mean “having to do with”. The phrase is a protean one that tends to draw its meaning from the words that surround it.
Hazel Williamson QC and Richard Glover (instructed by Stephenson Harwood) appeared for the appellant; David Holgate QC (instructed by the solicitor to the Inland Revenue) appeared for the respondent.
Alan Cooklin, barrister